[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

[jstay]

yeah do you?

[Anonymous]

No, i think it should be C because they didn't perform no substituted duty

[jstay]

yeah but it says original contract. with an accord and satisfaction the old contract is voided and a new contract is formed, thus the party doesnt need to perform

[Anonymous]

Hey guys just took reg and I have to say the exam felt very general. I didn't get tested on any of the little phaseouts or anything like that. I think knowing a little about a lot is the key with this exam

[canaanko]

@cprv19

I completely agree. You gotta know a little bit about everything. Even if you were tested on some phaseouts, I believe those questions would be considered difficult.

[PasstheCPA7]

@ canaanko: Have you sat for the exam yet or are you sitting in May?

[canaanko]

@PasstheCPA7

I sat for REG yesterday (Friday).

[PasstheCPA7]

How was your experience? Do you think I should focus heavily on Business Law or can I just skim to get a basic understanding? Some of these Becker questions are so long and detailed. Any tips you can recommend?

Thanks!

[Anonymous]

You should find a middle ground between focusing heavily on BLaw and just skimming it. Ethics I would know inside and out. Remember Business Law is 20% of the exam. Ethics is also 20% of the exam but there isn't nearly as much material on Ethics so it goes fast.

Both subjects are very conceptual. Once you understand the concepts, you should be good. I wouldn't blow it off but if there are tax issues you are struggling with, focus on those first.

[willpassby2014]

I cant understand how C is the correct answer. Can anyone explain

To prevail in a common-law action for innocent misrepresentation, the plaintiff must prove:

Incorrect A.

the defendant made the false statements with a reckless disregard for the truth.

B.

the misrepresentations were in writing.

C.

the misrepresentations concerned material facts.

D.

reliance on the misrepresentations was the only factor inducing the plaintiff to enter into the contract.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[jstay]

@willpass, common law for innocent misrepresentation doesnt require gross negligence or reckless disregard for the truth. it says innocent misrepresentation so we know that the plantiff wants to prevail for a misrepresentation that wasn't fraudulent, but it did have an effect on the decision being made. therefore the misrepresentation need to be material (were not gonna gold a CPA liable for innocent misrepresentation if it was a “minor” misrepresentation) so therefore I think it has to be C

[willpassby2014]

makes sense…thank you

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

first time I hear about this concept

In the current year, Christian received a gift of property from his mother that had a fair market value of $50,000. Her adjusted basis was $20,000. She paid a gift tax of $9,000. What is Christian’s basis in the property?

A. $50,000

B. $29,000

C. $27,500

Answer (C) is correct.

The basis of property acquired by gift is generally the donor’s adjusted basis, increased by a gift tax paid applicable to appreciation. The gift tax applicable to appreciation is the appreciation divided by the taxable gift times the gift tax paid.

Donor’s adjusted basis

$20,000

Gift tax *

7,500

$27,500

D. $59,000

[jstay]

yeah i knew it would increase the basis (note: this is only when property has appreciated, if it went down in value and the donor paid gifttax, its moot, we do nothing.

For this problem i probably would have just guessed B 29,000 but i figured how they came out with the answer

30 / 50 x 36 = 7.5

[Anonymous]

I answered 29, I had no idea there was some sort of allocation involved. If there was 20000 answer, I would pick that though

[Author]

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