[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/

[Anonymous]

[Anonymous]

@anj goodluck to you! I know you will do amazing. You have been working so hard. I'll be thinking about you on the 30th 🙂

[Anonymous]

willpassby2014,

I thought revocable trust = incomplete gift, but if she actually received 15000 that must be considered a gift and exclusion should probably apply

what's the answer?

[Anonymous]

thanks cpa8488, I am reading bankruptcy chapter now and it's terrible. It would all depend on the amount of blaw question I get

[willpassby2014]

anna you got the right answer. I thought since it was not a completed gift how would gift tax apply.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Meddik]

I think that once the beneficiary actually receives something from a revocable trust, that part is a completed gift of present interest. Because the beneficiary presently received it in that taxable year.

But if the trust also had an extra $5,000 sitting in it, and the grantor had promised another $30,000 for the beneficiary, that $35,000 would NOT be a completed gift. That amount is still revocable and thus only a future interest.

And then for irrevocable trusts, the beneficiary of the income interest and the beneficiary of the remainder interest each receive a gift in the amount of the present value of their interest, right?

FAR - 86
REG - 83
AUD - 97
BEC -

[Anonymous]

as per my question above regarding the preferential transfer, it says in my notes that continuation of installment payments is not a preferential transfer so none of the answers fit. I see nothing about oversecured, but i see how it could be a right answer if Master paid that note in full, but it was only monthly payment, there is no way to know how much was still owed

[Anonymous]

Meddik,

I think interest – present value (unless deferred, there is something with age of 21?)

remainder – future value

[Anonymous]

Anitadombrowski, let's hope it's 85! Did you get a lot of blaw?

[Anonymous]

What is blaw? lol.

I sure hope I got an 85!!!!

[Anonymous]

haha sorry business law

[Anonymous]

Some contracts, secured transactions, and business structure.

[ThumbsUp]

On June 30, Year 8, Berk retired from his partnership. At that time, his capital account was $50,000 and his share of the partnership's liabilities was $30,000. Berk's retirement payments consisted of being relieved of his share of the partnership liabilities and receipt of cash payments of $5,000 per month for 18 months, commencing July 1, Year 8. Assuming Berk makes no election with regard to the recognition of gain from the retirement payments, he should report income therefrom of

Berk's partnership basis on 6/30/Yr 8 $ 80,000

$5,000 x 6 months, Year 8 cash distributions nontaxable, basis reduction (30,000)

Relief of debt (30,000)

Berk's partnership basis on 12/31/Yr 8 20,000

$5,000 x 12 months, Year 9 distributions (60,000)

Negative basis (40,000)

Capital gain to eliminate negative basis 40,000

Berk's basis on 12/31/Yr 9, liquidated $ 0

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

[Double-entry Deviant]

Hi all – the correct answer is A – anyone get why. According to the MCQ answer, there was a new offer put out there which Silk must approve….I'm scratching my head here….

On July 1, Silk, Inc., sent Blue a telegram offering to sell Blue a building for $80,000. In the telegram, Silk stated that it would give Blue 30 days to accept the offer. On July 15, Blue sent Silk a telegram that included the following statement: “The price for your building seems too high. Would you consider taking $75,000?” This telegram was received by Silk on July 16. On July 19, Tint made an offer to Silk to purchase the building for $82,000. Upon learning of Tint’s offer, Blue, on July 27, sent Silk a signed letter agreeing to purchase the building for $80,000. This letter was received by Silk on July 29. However, Silk now refuses to sell Blue the building. If Blue commences an action against Silk for breach of contract,

Blue will:

A.

win, because Blue effectively accepted Silk’s offer of July 1.

B.

win, because Silk was obligated to keep the offer open for the 30-day period.

C.

lose, because Blue sent the July 15 telegram.

D.

lose, because Blue used an unauthorized means of communication.

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]

Anita, that's exactly how I felt walking out of FAR – that the chances of me getting a 69 were about the same as me getting an 82. I got an 86 somehow. Hope your end result is the same as mine was.

AND at least one or two SIMs I had no idea and had to research it, then try to replicate the math… At least I had the time, but I had no idea what I was doing.

[Author]

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