[jeff]

Welcome to the Q2 2015 CPA Exam Study Group for REG.

“Death and Taxes” – Individual Tax for the CPA Exam

Posted by Another71 on Monday, November 24, 2014

Free NINJA: https://www.another71.com/cpa-exam-study-plan/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Gabe]

good luck @cprv! You got this!

CPA, CFE
CISA- Experience will be completed by August 2016

[jstay]

best of luck @cprv19 let us know how it goes

[Anonymous]

Good luck!

[Anonymous]

The antifraud provisions of Rule 10b-5 of the Securities Exchange Act of 1934:

A. apply only if the securities involved were registered under either the Securities Act of 1933 or the Securities Exchange Act of 1934.

B. require that the plaintiff show negligence on the part of the defendant in misstating facts.

C. require that the wrongful act must be accomplished through the mail, any other use of interstate commerce, or through a national securities exchange.

D. apply only if the defendant acted with intent to defraud.

I can see how C is correct but why is D not correct as well? One requirement is Scienter, which appears to be defined in D. Am I missing something here?

[Anonymous]

@dpd I think it's D.

[jstay]

yeah that question confused me as well

[Anonymous]

C

[Anonymous]

Oh, because gross negligence doesn't necessarily involve intent

[Anonymous]

C was the correct answer to the question according to Ninja but I don't see how D doesn't work as well. The definition of Scienter given in the Becker book is “intent to deceive.” Is defraud not the same?

[Anonymous]

I swear I'm losing what I learned on Business Law the more reviewing I do. Seriously starting to piss me off.

[Anonymous]

Because answer d excludes the possibility of gross negligence that doesn't require intent

[Anonymous]

The answer was D, that all of the damages are taxable

[jstay]

@dpd, i think thats B. D said compensatory damages werent taxable but punitive were

[Anonymous]

@jstay, sorry! Yep, B

[Anonymous]

Greed Co. telephoned Stieb Co. and ordered 30 tables at $100 each. Greed agreed to pay 15% immediately and the balance within thirty days after receipt of the entire shipment. Greed forwarded a check for $450 and Stieb shipped 15 tables the next day, intending to ship the balance by the end of the week. Greed decided that the contract was a bad bargain and repudiated it, asserting the statute of frauds. Stieb sued Greed. Which of the following will allow Stieb to enforce the contract in its entirety despite the statute of frauds?

a) Greed admitted in court that it made the contract in question.

b) Stieb shipped 15 tables.

c) The contract is not within the requirement of the statute of frauds.

d) Greed paid 15% down.

[Author]

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