[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

[RTCPA]

hi guyz

social security tax is it 4.2% or 6.2 , Im getting to different #s from 2 different sources

thnx

[Anonymous]

pretty sure it's 6.2

[Anonymous]

ugh how does this make sense

Expansion Corp. is seeking to obtain control of Resistance Corp. Expansion does not currently buy from, sell to, or compete with Resistance. Which of the following statements applies?

A. The acquisition is likely to be declared illegal if there will be reciprocal buying and there is a likelihood that other entrants into the market would be precluded.

Answer (A) is correct.

The Clayton Act of 1914, as amended, supplemented the Sherman Act to prohibit a corporation from acquiring the stock or assets of another corporation (merger) if the effect might be to lessen competition substantially or tend to create a monopoly. If, after the acquisition, reciprocal buying produces a likelihood that entry of other firms into the market is precluded, the acquisition is likely to be declared illegal as a lessening of competition.

B. Given that Expansion does not buy from, sell to, or compete with Resistance, antitrust laws do not apply.

C. If Expansion can consummate the acquisition before there is objection to it, the acquisition cannot be set aside.

D. The acquisition is legal on its face if cost efficiency will result from combined marketing and advertising.

[willpassby2014]

gift tax exclusion is per donee

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Tncincy]

Hope everyone is having a good study session ( no posts for about 7 hours?)…..I know, I know the weekend is coming,and it's the holiday. I will be traveling with my family but I think they will have a different opinion about jeff when the trip is over. planning on non-stop audio and when I am not driving, non-stop mcq's. Just a few more days to nail this or chicken out 😕

It begins with a 75
Been here too long as a cheerleader....ready to pass

[RTCPA]

thnx Ana

what about federal unemployment is it 6% or 6.2 again im getting to different #s

thnx a lot

[willpassby2014]

i have 2014 reg past questions with explanation from gleim. any one has 2015 with explanation.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Double-entry Deviant]

nmatera15 – you'll need to memorize the M1 reconciliation. I suggest if you don't get it to print out page 4 of the 1120 or 1120S tax return so you can have it in front of you…the real life example might be helpful.

All the best!

REG: 5/30/15 - 77
FAR: TBD
BEC: 8/31/15 - 70, 73, 1/8/16 - 77
AUD: 6/1/16- 73, 8/2/16

[cdn]

On May 4, I took REG – 1st time, 1st part. My experience – horrible. Let me tell you the whole story and you decide if the bad luck followed me that day. My train was not running in the morning so I had to figure another way – that is ok – I gave myself extra time in the morning. I got to the testing center. Administrator was – sorry to use this word- old guy. His computer froze and had to wait long time until reboot. In the meantime, others were taking brake so I had to wait until they were checked in. Ok – I was calm and waited patiently. I entered the room and here it goes. I wanted to use headphones but what an ugly and painful they were so did not use them. People around were acting like bunch of kids – and one stand up and said ” what the f….” loudly and left. Ok- just be calm and this happened – MY COMPUTER CRASHED. Wait for administrator and moved to another comp. Thank goodness time was not running. Than this administrator comes every 5 minutes behind my back and check something that was on wall- no clue what. Than my mouse stopped responding, screen went down. And boom – My time out and done. I was so disoriented, so distracted, so angry, so aggravated. This is CPA exam, there should be quite without entering every 5 minutes plus equipment MUST work. Anyone has have similar experience on their journey?

[Double-entry Deviant]

@JeffElliot:

Here's a message to Jeff (I feel like I'm reaching out to the wizard in the Wizard of Oz – is he really here?) ….

I just watched your video on Corporate Tax – Part IV….I'm not totally following the final part – around 5:00….

You mentioned a situation where a corp had taxable income of $60K and a DRD of $70K, causing a loss of $10K.

Are you saying that if the DRD causes a loss, you take the full loss? I'm assuming that's what you're saying but I wasn't clear.

Thank you!

REG: 5/30/15 - 77
FAR: TBD
BEC: 8/31/15 - 70, 73, 1/8/16 - 77
AUD: 6/1/16- 73, 8/2/16

[Anonymous]

didato,

see drd limitation rule

if DRD < taxable income < Dividends -> DRD = % of taxable income

[willpassby2014]

Assuming Loss from Business is (10,000)

Dividend Income is 100,000(Assume 15% stake ). So 70%is DRD deduction right

-10,000+100,000=90,000 Taxable income. Now 90,000-70,000 DRD =20,000 Taxable income. Since Taxable income remains you cannot claim 70,000 of DRD …rather you should cliam only 90,000*70%= 63000. so it will look like this

90,000-63000=27000 taxable income after DRD.

In case if after TAKING THE 70% DRD it results in loss …instead of 20,000 T.INCOME if it had resulted in a loss then you can claim the whole 70,000 . you need not restrict it to the Taxable income * DRD% . I can explain better if i can call.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[willpassby2014]

A CPA prepares a client's tax return containing business travel expenses without inquiring about the existence of documentation for the expenses. Which statement best describes the consequence of the CPA's lack of inquiry?

A. The CPA may be assessed a tax return preparer penalty.

B. The CPA may be charged with preparing a fraudulent return.

C. The client will not owe an understatement penalty if the return is audited and the expenses disallowed.

D. The client will not be subject to a fraud penalty.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[ThumbsUp]

What's up people……. Just a quick little question about the difference between partnership and corporations.

Able and Baker are equal members in Apple, an LLC. Apple has elected not to be treated as a corporation. Able contributes $7,000 cash and Baker contributes a machine with a basis of $5,000 and a fair market value of $10,000, subject to a liability of $3,000. What is Apple's basis for the machine?

5000.

This LLC has elected not to be treated as a corporation. Therefore, the rules for partnerships will apply. The general rule is that the partnership's basis in the contributed property is the carryover basis of the contributor. So the $5,000 basis to Baker becomes the carryover $5,000 basis to Apple.

If this was a corporation the basis would be the 5,000- the liability assumed of 3,000. Correct?

AUD- 22, Just missed it...maybe next time!
REG- 14, so close!!!

[Anonymous]

If it was a corporation, the basis would probably be 8000? Basis + gain recognized by Baker? NOT sure

[Author]

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