[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

[Anonymous]

a. A PMSI arises when

1) A person obtains credit (borrows money),

2) The credit is used to acquire (purchase) property, and

3) That property serves as collateral to secure the obligation to satisfy the debt

(repay the money borrowed).

EXAMPLE

Caitlin purchased a computer on credit from Hardware Heaven. She also purchased in the same transaction additional software that she planned to install in the computer. Thus, Hardware Heaven (a seller that financed the purchase) has a PMSI in the computer and the software.

So, yes, I think your Macy's card purchases would be a PMSI. A PMSI is an example of an automatic perfection.

[Anonymous]

More examples:

Able Finance Co. lent Jim $1,000 to purchase a couch for use in his home and took a security interest in the couch. Jim used the $1,000 to purchase a couch. Able's security interest is a PMSI and is perfected without filing a financing statement or taking possession of the couch.

Able Finance Co. lent ABC Corp, Inc., $1,000 to purchase a forklift and took a security interest in the forklift. ABC purchased a forklift with the $1,000. Able's PMSI is not automatically perfected because the forklift is equipment, not consumer goods.

[Anonymous]

coloradorit,

what if I purchased stuff at macys with chase card? Would macys still have PMSI?

[willpassby2014]

coloradorit…wow…i want to get 100% of tax right and atleast 40% of b.law right for me to pass. My mind is spinning with B law. I just saw a note from a passing student that most of his MCQ were B.law….i was shocked to read that note…now i have just 3 days. i would rather revise tAX AND B.law then go in for new one.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

mostly blaw, are you kidding me?

[willpassby2014]

anna. If you purchase with chase card and not Macy's it is not PMSI. Meaning you should buy for credit and that should be payable to merchant

Yes. Thats what he put. It is in I passed REG forum.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[princeCPA]

Tap, a calendar-year S corporation, reported the following items of income and expense in the current year:

Revenue $44,000

Operating expenses 20,000

Long-term capital loss 6,000

Charitable contributions 1,000

Interest expense 4,000

What is the amount of Tap's ordinary income?

My question is why interest expense is not separately stated item for s corp?

BEC 79
FAR 86
AUD 79
REG 90

[Anonymous]

princeCPA,

interest income is, not expense

[princeCPA]

@anjanja thanks just checked it on my book and I think it is true for partnership also.

BEC 79
FAR 86
AUD 79
REG 90

[Anonymous]

So interest income is offset by investment expense, but not interest expense, correct?

The answer to Prince's question is 20k?

[willpassby2014]

prince, what you are mentioning or thinking is investment interest expense…which is separately stated….Interest expense are common business expense

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

willpassby2014,

maybe they mean ethics, that wouldn't be too bad. However, I'm morally prepared to retake in July so it's fine, everything is fine

[willpassby2014]

we will pass anna….lets have some positive thinking and give the best we have

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

I am not really great with positive thinking, that's not how mother-russia raised us lol. Maybe I will distract myself from bad thoughts with some compulsive online shopping for now

[princeCPA]

Are you guys kidding me. You will pass, based on what I have seen on this tread. I took this exam last window barely prepared. Didn't read any ethics at all and I end up with 74. You guys have a very good grasp so no worries.

BEC 79
FAR 86
AUD 79
REG 90

[Author]

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