[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

[Holly]

@cprv19 $29,000?????

BEC - 79
REG - 85
AUD - 5/27/16

[Anonymous]

Its A

$20,000+ 7,500 gift tax= $27,500

The explanation for how they got 7500 was:

((50,000-20,000)/(50,000-14,000))*9,000= 7,500

No idea where they get the 14,000

[OnlyBelieve]

cprv19- i think the 14000 is the maximum current gift tax exclusion Christian can take

AUD - DONE
BEC - DONE
REG - 04/04
FAR - 05/30

[OnlyBelieve]

Apple corp has organizational cost totaling $60,000 when it was incorporated. what is the maximum amount of organizational expense deduction apple corp can take in it's first year of incorporation?

AUD - DONE
BEC - DONE
REG - 04/04
FAR - 05/30

[Anonymous]

@OnlyBelieve oh yea i compeltely forgot about that. ty.

and isnt it 5000 and the amortize the rest?

[OnlyBelieve]

cprv- correct! How will the amortization piece be calculated? Anyone?

AUD - DONE
BEC - DONE
REG - 04/04
FAR - 05/30

[Holly]

$60,000 -$5,000=$55,000/180 months

BEC - 79
REG - 85
AUD - 5/27/16

[Anonymous]

Wouldn't you amortize all 60,000 over 180 months since its above the 50,000 phase out? The 5,000 would be completely phased out at 55,000 so the whole thing is amortized.

[OnlyBelieve]

Angel- i agree with you. Any costs up to 50K can be reduced by 5K. So let's say if we had org costs of 52K, we will reduce the 5K by 2K difference(52-50) leaving us with 3K. So for the 52K, the calculation will be (5000-3000)*(52000-3000)/180. Hence the cost will be completely phased out at 55K and so anything above 55K- use the full amount

Someone correct me if i'm wrong.

AUD - DONE
BEC - DONE
REG - 04/04
FAR - 05/30

[OnlyBelieve]

Max is covered by the group medical insurance policy of his employer, the Gougem Good Drilling Services Company. His after-tax contribution for the premiums was $1,000 per month for family coverage; Gougem contributed $15,000.

indicate the amount which is a “qualifying medical expense.” without regard to AGI

AUD - DONE
BEC - DONE
REG - 04/04
FAR - 05/30

[Gabe]

@cprv how do you distinguish which numbers to pull for each gain? I have the notes for gifted prop

FMV>AB- use AB

FMV<AB- sold at a gain? use AB

FMV<AB- sold at a loss? use FMV

I just have a hard time distinguishing which numbers belong to which transaction. Any help? Do you have any notes?

@only is correct. when they start using 52k or 53k in expenses is when it gets interesting 🙂

CPA, CFE
CISA- Experience will be completed by August 2016

[Gabe]

@only 0? He contributed after tax dollars, so they've already been taxed. Gougem can contribute up to $50k with no tax implications.

CPA, CFE
CISA- Experience will be completed by August 2016

[OnlyBelieve]

Gabe – that's exactly what i thought, but here is the solution from Becker

“Ans: 12,000. The after-tax medical insurance premiums paid by Max are qualifying medical expenses. Insurance premiums paid by the employer are normally not qualifying expenses”.

I thought it was 0 because i did akin this scenario to a Roth IRA, where you contribute after-tax dollars and hence not deductible or taxable

AUD - DONE
BEC - DONE
REG - 04/04
FAR - 05/30

[Gabe]

@only where is this question from? I still would think after-tax= not deductible.

edit:

https://blog.turbotax.intuit.com/2014/06/27/when-can-you-claim-a-tax-deduction-for-health-insurance/

You can’t take a deduction for health insurance you paid for with pre-tax money. If you have insurance through your employer, the premiums you pay are usually taken out of your paycheck before your income taxes are calculated. Since these premiums are paid with pre-tax dollars, they’re already income-tax-free, meaning you can’t claim them as a tax deduction.

and

Health insurance premiums paid with your own after-tax dollars are tax deductible. For example, if you purchased health insurance on your own through a health insurance exchange or directly from an insurance company, the money you paid toward your monthly premiums can be taken as a tax deduction

The explanation makes sense for pre-tax…still can't wrap my head around post tax- So since I was already taxed on it I should be able to deduct it?

CPA, CFE
CISA- Experience will be completed by August 2016

[Anonymous]

Yeah, medical premiums are an area I need to go over again. I get confused on what is deductible and where it's deductible between employers, employes and self employed.

[Author]

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