[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/

[Meddik]

No, it's because the contract specifically said that he had to redeliver it to Johnson PROMPTLY once he got the pump. Travis is driving a truck for a living, he delivered it to the repair place on time. Then, he got the pump back. He was supposed to promptly redeliver it, and by not doing so he could reasonably foresee that the factory needed the pump to some degree (therefore renting the pump could be anticipated). He couldn't reasonably foresee that the pump was absolutely critical (which is why the profits are special damages) because as a truck driver he's not an expert of Johnson's operations & Johnson never informed him of the importance of it.

If Johnson hadn't rented the pump, they would have lost even more profits. They also wouldn't have been able to recover anything because they would be failing to take reasonable measures to mitigate their loss. But since they did take those measures to mitigate their loss, they may recover the cost of those measures (rent of the pump).

It's not the best question around, it's one of those ones where you have to try to figure out what concept they're testing you on and then apply it.

FAR - 86
REG - 83
AUD - 97
BEC -

[Anonymous]

i suppose… it's not that easy to define reasonableness

[willpassby2014]

Which one of the following statements is correct with regard to unrelated business income of an exempt organization?

A.

An exempt organization that earns any unrelated business income in excess of $100,000 during a particular year will lose its exempt status for that particular year.

B.

An exempt organization is not taxed on unrelated business income of less than $1,000.

C.

The tax on unrelated business income can be imposed even if the unrelated business activity is intermittent and is carried on once a year.

D.

An unrelated trade or business activity that results in a loss is excluded from the definition of unrelated business.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

B

[MaLoTu]

Willpass – is it C?

[willpassby2014]

Pump- According to me i would have selected C as the answer .

I do not see a timeline which was given to travis to deliver. Is it within reasonable timeline? more information is needed to tackle this question.

In the exam i would have closed the eyes selected C and moved on

BEC Passed
FAR Passed
AUD Passed
REG Passed

[willpassby2014]

The answer is B and for the sale of stock to child , the answer is 0,0.

@Meddik. Though there is a gain of 1000 please note the 2000 loss of parent should be used and still the child will suspend $1000 loss after netting off. So for the current year it is 0, 0

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

So weird with the delay. I've been on a number of different computers and I couldn't imagine why. But thanks for letting me know.

Anna, thanks for reminding me. There was a question where the FMV was used; maybe it was used because it was lower than basis? Yeah, if I pass the test, depending on the questions I get, I will definitely put that in my Gleim review – if it's too complicated for the CPA exam, it's too complicated to include in your materials. I started out wanting to be over-prepared. The more I worked, the more I realized that just was not humanly possible on REG with all the different limits and thresholds and phaseouts. I get too bogged down in the crap that doesn't matter to memorize the crap that does.

[MaLoTu]

Theoretically, wouldn't C also be right if that one intermittent event generated more than $1000 of income? I thought the limit was $500 or I might have selected B over C.

Is it just that B is more right than C … or if it is just one time a year it is exempt no matter how much income is generated?

[princeCPA]

Let's talk about passive activity for the 100th time. Here is what I have and let me know if I am wrong

Material participation in rental activity: not qualified for the 25,000 deduction

Active participation in the rental activity: qualified for the 25,000 deduction

Material participation on rental real property: qualified for the 25,000 deduction.

BEC 79
FAR 86
AUD 79
REG 90

[Anonymous]

I thought either material OR active participation qualified, as material is a more stringent standard then active. Also I've never heard the distinction between rental activity vs rental real property. Where is that from? Rental is rental as far as I know; it's the passive vs active/material that I was concerned with. More than a bit concerned my exam is in 2 days and I havent heard any of that…

[MaLoTu]

Any type of rental activity (it seems like they usually will state something to make it obvious) can qualify for the $25K deduction for individuals, but there are phase-outs. The phase out begins at 100K and is reduced until 150K. Someone on here did the calculation I think at 125K of income you would get half the deduction, but there is a formula of sorts.

Can you get the passive income (mom and pop) exemption and have passive losses offset passive income? That might be beyond the scope of the test, but I am really not sure what to expect. I took the Becker Final Exam #1 today and the questions were a lot harder than what I thought 🙁 I averaged 69% on MCQ. I will do exam 2 tomorrow.

[iddyrashy]

Hello friends. I am retaking REG on July 15, 2015. I am about to start studying this weekend. Goodluck everyone.

AUD 89 (07/06/14)
REG 83 (08/27/2015)
FAR 78 (04/27/2015)
BEC 75 (11/13/2015)

TEXAS 2016

[RTCPA]

hi can any one help me with this question , why this is not wash sale, although the orginal purchase done before 30 days of the sale

Pomplin, an individual calendar-year taxpayer, purchased 100 shares of Trix Corporation common stock for $10,000 on October 10, 2014, and an additional 50 shares of Trix Corporation common stock for $4,000 on December 15, 2014. On November 8, 2014, Pomplin sold the 100 shares purchased on October 10, 2014, for $7,000. What is the amount of Pomplin’s recognized loss for 2014 and what is the basis for his remaining 50 shares of Trix Corporation stock?

$3,000 recognized loss; $4,000 basis for his remaining stock.

$1,500 recognized loss; $5,500 basis for his remaining stock.

$1,500 recognized loss; $4,000 basis for his remaining stock.

$0 recognized loss; $7,000 basis for his remaining stock.

[Anonymous]

involuntary gap.

I've been re-reading this sentence but it doesn't make sense to me. What does one have to do with another?

“a court hearing date must be set before the petition is effective, so the order of relief occurs later.” what happens if the petition is effective before the hearing date? doesn't the petition need to be approved by the court anyway? what if the order of relief occurs earlier (than what?)?

i am not happy about the amount of time I am wasting on this

[Author]

Replies