[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

[princeCPA]

No_one I misread your question. I suggest to check every part of the taxation area. I know it is vast but you will be surprised with some questions on CPA exam. Cover as much as you can.

BEC 79
FAR 86
AUD 79
REG 90

[No_one]

@princeCPA which review material are you using for REG?

I am super worried about Macrs, Section 1231, 1245, 1250 and all. Becker hardly covers anything in that area…

Becker students, what you guys did to cover this super big chunk of course?

CA Candidate
FAR: You are down...
Aud: Surprised me...Thanks
BEC: 75% work done
REG: It's 80 but I am 100% done 🙂

[No_one]

and yes forgot to mention section 179 (that's like a paragraph) and ppl here keep on talking about them..Giving me jitters..Don't know what to do?

CA Candidate
FAR: You are down...
Aud: Surprised me...Thanks
BEC: 75% work done
REG: It's 80 but I am 100% done 🙂

[Anonymous]

No_one,

is there a particular question you could post? I answer most of mcq's correctly but still feel like I don't have 100% understanding on this

[princeCPA]

@No_one I am using Wiley text book and test bank. I complemented with Ninja Mcq and it looks okay so far.

BEC 79
FAR 86
AUD 79
REG 90

[No_one]

@Anna I am more worried about those big sims that comes with MACRS, or such sections, I feel Becker is not covering this section deeply. And whenever I read on blogs everyone keep on talking about them…So, it is haunting me.

I am assuming here, that other review materials are inclusive of MACRS calculation techniques and they must be covering this topic in much deeper as compare to Becker…

I don't know what to do? I don't have anything else other than Becker..They says mid year, mid month, half year conventions but they don't show how to calculate..I know it might be a simple math thing for many of us..But I am a slow learner..

CA Candidate
FAR: You are down...
Aud: Surprised me...Thanks
BEC: 75% work done
REG: It's 80 but I am 100% done 🙂

[Anonymous]

ugh

Max died in 2014. His estate elected a December 31 tax year. His estate received the following amounts in 2014: $10,000 in dividends from ABC Corp.; $50,000 in life insurance on the life of Max; and $100,000 in proceeds on the sale of vacant land. Max had purchased the land a number of years earlier for $20,000. The $100,000 sales price was $10,000 more than the $90,000 fair market value claimed by the estate on its estate tax return. The estate did not elect alternate valuation on its estate tax return. What is the amount of taxable income that should be reported by the estate for 2014?

A. $140,000

B. $20,000

Answer (B) is correct.

Except as otherwise provided, the taxable income of an estate is computed in the same manner as that of individuals. The dividends are income to the estate if earned, but not collected, by the decedent before death. Life insurance proceeds are included in the gross estate, but not taxable income. The estate’s basis in the land is its fair market value at the date of death. The sale of the land produces a capital gain of $10,000 ($100,000 selling price – $90,000 basis). Therefore, the total taxable income of the estate before deducting the personal exemption is $20,000 ($10,000 + $10,000).

C. $70,000

D. $90,000

[Anonymous]

No_one, do you know how to calculate double declining balance? That's the same thing

[No_one]

@Anna Yes I know that 🙂 Thank you for informing me.

CA Candidate
FAR: You are down...
Aud: Surprised me...Thanks
BEC: 75% work done
REG: It's 80 but I am 100% done 🙂

[Anonymous]

oops I guess I shouldn't be stating the obvious then

[willpassby2014]

A taxpayer holds a 30 percent ownership interest in the Sanghvi Corporation. The investment has an adjusted basis of $13,000. The corporation conveys cash of $4,000 to the taxpayer along with land that had a tax basis to the corporation of $10,000 but a fair value of $17,000. The corporation is not going out of business so this transfer is a nonliquidating distribution. Once the taxpayer receives the cash and the land, what is the tax basis of the land on her personal financial records?

A $9,000

B $10,000

C $13,000

D $17,000

BEC Passed
FAR Passed
AUD Passed
REG Passed

[willpassby2014]

i was little stumped by this

The XY Company bought land two years ago for $20,000. The property is now worth $24,000 although the corporation still owes $15,000 on its purchase. The company makes a nonliquidating distribution of this property to one of its stockholders who also accepted the obligation for the debt. What is the tax effect to XY of making this distribution?

A It is a dividend; these is no tax effect.

B XY recognizes a gain of $4,000.

C XY recognizes a gain of $9,000.

D XY recognizes a gain of $19,000

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

willpassby2014,

pretty sure 1st question is D

not sure about the 2nd one, but I would go with D

[jeff]

Update on the “West” question.

This is an old…OLD CPA Exam question…not really sure how it ended up in there as wrong – but it is wrong.

**

West, an Indiana real estate broker, misrepresented to Zimmer that West was licensed in Kansas under the Kansas statute that regulates real estate brokers and requires all brokers to be licensed. Zimmer signed a contract agreeing to pay West a 5% commission for selling Zimmer’s home in Kansas. West did not sign the contract. West sold Zimmer’s home. If West sued Zimmer for nonpayment of commission, Zimmer would be:

A liable to West only for the value of services rendered.

B liable to West for the full commission.

C not liable to West for any amount because West did not sign the contract.

D not liable to West for any amount because West violated the Kansas licensing requirements.

Correct Answer: D

Zimmer is not liable to West as West is not licensed in Kansas and, therefore, makes this contract void.

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

[Anonymous]

actually scratch that

I was trying to think what the entry would be for that land question and I got this:

DR Debt 15000

DR RE 9000

CR Asset 20000

CR Gain 4000 so the answer should be B 4000

[Author]

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