[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 anna

the answer is b not c

[willpassby2014]

I memorized empowerment zone and domestic maid FICA contribution etc….It has concepts of grocery store , salon, som35% should live in empowerment zone etc….i dont know where to read all those.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

RTCPA,

In my text it says statue of limitations counts from the date of the breach, if this is some sort of weird exception, chances are we won't see it on the test.

[Anonymous]

I am doing gleim sims now and it's weird. There is this one endless sim where I just need to calculate COGS based on ending or beginning inventory. Should I even go on? I was expecting something more sophisticated

[willpassby2014]

I dont think so. Practice something like Indiv tax or property tax.

Just finished secured transaction….wow…that was brutal but finally got the concept

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

just finished this sim and apparently some death benefits are included in income?

“All benefits received by the beneficiaries or the estate of an employee from or on behalf of an employer are included in gross income. This is for employer-paid death benefits, not to be confused with death benefits of a life insurance plan provided by the employer.”

not to be confused? How do I even tell the difference? Couldn't find anything in IRC

[RTCPA]

anna

do not know if its excepting or not I also assumed it c,

[Anonymous]

now really confused by this:

Taxpayers may deduct up to $2,500 of interest paid on qualified educational loans in 2014. The phaseout range begins when AGI exceeds $65,000 and is completely phased out when AGI reaches $80,000. Student X’s deduction is reduced by $833 {[($70,000 AGI – $65,000) ÷ $15,000 phaseout range] × $2,500}. Therefore, Student X may deduct $1,667 ($2,500 – $833) of interest paid on qualified educational loans.

I know there is a phaseout, roger mentions it's existence, but not the actual limit. I am looking in IRC, but there is no range. How would I know it on the exam?

[willpassby2014]

you will not be tested on phase outs

BEC Passed
FAR Passed
AUD Passed
REG Passed

[willpassby2014]

PROPERTY TRANSACTION QUESTION

X exchanged a van with adjusted basis of 20,000 to another van for FMV 10,000 and received 3000 in boot. what is the basis in the new van?

20,000

17,000

13,000

10,000

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

20000? please say it's 20000

[willpassby2014]

No. It is 17,000.

Basis: NBV of the property given up + gain recognized + boot paid – boot received

20,000-3000 BOOT. =17000

Loss is never recognized.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

i have no questions about the loss but why isn't gain recognized? Because there is no realized gain? I thought if there is a boot it automatically implies gain? I am doomed

[ShmeePA]

Answer is 17,000.

You take the FMV of the new van plus boot received. Which would give you $13,000 which is less than the Adj Basis of the old van of $20,000. Leaving you with a Realized loss of $7,000. Because you can't recognize any gain or loss then a realized loss exists the entire $7,000 is deferred. That Deferred loss is added to the FMV of the new van of $10,000 which gives you a basis of $17,000.

BEC-84
FAR-86
AUD-87
REG-79

[Anonymous]

if there is no gain recognized, which is what confused me, then the basis would be:

DR Cash 3000

DR New asset 17000 plug

CR Old Asset 20000

[Author]

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