[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]

Has anyone used both sides of their -I don't know what they're technically called- sheets used as scratch paper during testing? Can you get up and get new ones?

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

[Gabe]

HR- you get two sheets and I have never used both sides of both sheets (even with FAR). However, if you need one you raise your hand and they bring you new ones.

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

[Gabe]

An individual entered into several exchanges during the current tax year. Which of the following exchanges is classified as like-kind?

A. Partnership interest for partnership interest.

B. Common stock for common stock.

C. Apartment building for unimproved land.

D. Manufacturing equipment for factory building.

One I always have trouble with for some reason….

Answer is C. Pship interests and stock is automatically disregarded…

Equipment is biz prop while building is realty.

So building for land (realty for realty) would be the correct answer.

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

[Gabe]

Lane Inc., an S corporation, pays single coverage health insurance premiums of $4,800 per year and additional premiums of $7,200 per year for family coverage. Mill is a ten percent shareholder-employee in Lane. On Mill's behalf, Lane pays Mill's family coverage under the health insurance plan. What amount of insurance premiums is includible in Mill's gross income?

A. $0

B. $4,800

C. $7,200

D. $12,000

Since Mill is >2% owner, she must include insurance in gross income totaling $12,000 ($4,800 plus additional premiums of $7,200)

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

[Gabe]

Fun one:

For the year ended December 31, 2014, Kelly Corp. had net income per books of $300,000 before the provision for Federal income taxes. Included in the net income were the following items:

Dividend income from an unaffiliated domestic taxable corporation (taxable income limitation does not apply and there is no portfolio indebtedness) $50,000

Bad debt expense (represents the increase in the allowance for doubtful accounts) 80,000

Assuming no bad debt was written off, what is Kelly's taxable income for the year ended December 31, 2014?

A. $250,000

B. $330,000

C. $345,000

D. $380,000

Asnwer is as follows:

300k

+80k (bad debt that was not written off for tax purposes)

-35k (book purposes we had 50k dividend income, for tax purposes we had 15k (dividend income less DRD), so the difference is an adjustment)

= 345

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

[Gabe]

Which of the following forms of business generally provides all owners with limited liability, while avoiding federal taxation of income at the entity level?

A. A Subchapter C corporation.

B. A Subchapter S corporation.

C. Partnership.

D. Limited partnership.

B. S-corp is a flow through entity that provides limited liability. In a partnership, all partners are liable (severally and jointly) for liabilities. A limited pship is made up of limited partners and at least one general partner. The limited partners are only liable for his or her investment, while the general partner is liable for all pship debts.

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

[Gabe]

All of the following are effective methods of ratifying a contract entered into by a minor except:

A. Expressly ratifying the contract after reaching the age of majority.

B. Failing to disaffirm the contract within a reasonable time after reaching the age of majority.

C. Ratifying the contract before reaching the age of majority.

D. Impliedly ratifying the contract after reaching the age of majority.

Answer: C. A minor cannot ratify a contract before reaching the age of majority. However, they CAN expressly and impliedly ratufy AFTER reach age of majority, or within a reasonable time after reaching age of majority (some states specify a time, 6 months, but it is usually up to jury to decide)

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

[okcpa2015]

I'm a week out from taking the exam. For anyone that has already taken it any tips on what I should be reviewing closely this week? Thanks!

FAR - 91
REG - 88
AUD - 98
BEC - 88

[Gabe]

Less than a week out…I am scoring well on everything, and I am in the same boat as you. Not sure how to proceed. Looking over weak areas…and doing sets of MCQs on all areas. You?

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

[okcpa2015]

Been through the all the CPAExcel Questions twice and the entire Wiley Test bank retaking the questions that I missed. I'm pretty much using the same process as FAR, just hope it works out the same for REG. Also, I've taken 2 practice exams and scored 90's on both so I feel comfortable.

…but feeling comfortable is pretty scary when it comes to these exams…

FAR - 91
REG - 88
AUD - 98
BEC - 88

[Anonymous]

I'm in the same boat except my exam is about 2 and a half weeks out. I still want to practice some more sims (they really scare me based on what people have said) and go over some topics that sound heavily tested (such as like-kind exchanges). But right now if my exam was this week, I think I could handle it.

[Holly]

My test is next Monday. I don't feel nearly as good about it as it sounds y'all do. Right now I'm trending 82% with business law bringing me down the most.

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

[Gabe]

@ok I've taken two practice exams, one in Ninja (86%) and one in Wiley (86%), I've been through both test banks, and all the SIMS. Trending in the upper 90's in Ninja, average is a solid 81% with Blaw bringing it down (77% avg).

I feel good, but like you said, it's scary to feel comfortable.

@HR what are you doing during final review? Angel?

I'm going through my becker book MCQs, then calling it a day. going on a long run to clear my head. Guess do MCQs and some SIMS next week, read over notes, listen to audio during work.

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

[OnlyBelieve]

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

[Anonymous]

HR, if you're trending 82% in NINJA, it sounds like you're doing better than you think you are. Right now I'm trending 81% and I feel good.

Remember, you're never going to feel 100% ready for an exam. And you're never going to remember 100% of the information on exam day. There's simply too much information, too many rules and too many exceptions to those rules.

[Author]

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