[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]

I just took my REG re-take today. Definitely felt better this time around than my first go in Feb (where I scored a 68). I wrote about it more in the REG exam experience topic group. Wishing all of you the very best if you are testing soon!!! NINJA MCQs definitely helped me A LOT. I felt well prepared for the MCQs in the exam. Keep at it y'all!

[imgonnabacpa]

Good. How many MCQs did you complete and what was your trending score?

I am due on 20th and have failed REG twice with 74. extremely nervous. y indiviadual and property taxation is around 62% but overall 77%. sometimes falls to 73% 🙁

Any suggestions for the last 3 days. I think I am forgetting it all 🙁

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[imgonnabacpa]

Can someone please explain the treatment of depreciation wrt home owner's gain exclusion.

Munch has used his residence, which he bought 10 years ago, for business purposes. He has taken depreciation deductions since he bought the home. When he sells his home in May 2014, his profit is $150,000, $5,000 of which is attributable to depreciation for the period after May 6, 1997. Which of the following is a true statement?

Incorrect A.

The depreciation deductions do not affect his exclusion.

B.

Fifty percent (50%) of the depreciation deductions reduce the amount of his gain eligible for the exclusion.

C.

Only depreciation deductions attributable to post-August 5, 1997, reduce the portion of his gain eligible for the exclusion.

D.

$5,000 of his gain does not qualify for the home sale exclusion.

Answer :

A homeowner can claim depreciation deductions if he or she rents out part of the principal residence to others or uses part of it as a qualifying home office. These depreciation deductions reduce the owner's basis in the home and thereby increase the gain realized when the home is sold. Under '97 TRA, the home sale exclusion is not available for that part of the home sale profit created through depreciation deductions. However, this rule only applies to the extent of depreciation claimed for post-May 6, 1997, periods. In other words, any depreciation taken after May 6, 1997, will be taxed upon the sale of the residence.

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[Anonymous]

@imgonnabacpa – The corporate's E&P stay on the books even though it converted from C to S corp. Think of it as a reserve that the corp can tap into if it exhausts all of its AAA when making S-Corp distributions. The E&P are not absorbed by the AAA. Remember the AAA represents the “Accumulated Adjustments Account”, not E&P. They are two distinct “buckets”. A S-Corp can pay a dividend shortly after converting from C to S corp, which is why the E&P stays on the books. The question is when does a S-Corp distribution become a dividend and the answer is, again, after the AAA is exhausted, the corp can tap into the old E&P and that will trigger a dividend. Distributions and dividends are not the same animal.

[Anonymous]

My question : -> why would you multiply by 2 and also if it says how much cn you deduct- Would it not mean — what is the amount of IRA deduction available after the phaseout ? Why is it giving the phaseout amount as the answer? Wht Am I missing? —> I had the EXACT same question and the only logical explanation I could think of is the filing status is MFJ = 2 taxpapyers. It is nuts, but it works. Multiply by 2 b/c if both spouses were not actively participating and they had to contribute to their traditional IRA's, they would have been entitled to the full $11K deduction ($5,500 deduction x 2 individuals). This is all I could surmise from this insanity.

[Anonymous]

This explanation is not from ninja, is it? Ninja has a totally different explanation of which I also couldn't make sense. Something about 800*4

The way I see it, the max allowable deduction should be 5500*60% or something like that

[Anonymous]

Under a personal services contract, which of the following circumstances will cause the discharge of a party's duties?

Incorrect A.

Death of the party who is to receive the services

B.

Cost of performing the services has doubled

C.

Bankruptcy of the party who is to receive the services

D.

Illegality of the services to be performed

I still think A could be a correct answer.

[Anonymous]

Smith filed his individual income tax return on April 15, 20X1. What is the general time limit for the IRS to assess a deficiency?

A.

Three years

Incorrect B.

Later of three years after filing or two years after payment of tax

C.

Six years

D.

No time limit

[Anonymous]

Hello all! I'm joining the ranks for REG for 2nd qtr (Hopefully I passed AUD this time too).

I'm using CPAexcel and have gotten to contracts in Business Law and am completely lost! I can't believe how much details there are for contracts and the Ninja notes aren't very detailed. Is it a section I should really spend a lot of time on or should I just go through it and move on? Ahhh!

[imgonnabacpa]

Thanks Bulldozer. I think it makes sense now. Its a good explaination… anything to help pass this beast, However to solidify the AAA concept, I will have to go through the book once.

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[Troblin]

Was originally planning on testing on 5/9, but I just found out I'm assigned to audit the final 2 weeks of April.

Decided to move my test up to this Sunday. Wish me luck! 🙂

FAR: 85(11/22/2014) - Becker(full)/Ninja MCQ (5 day cram)
AUD: 79 (2/1/2015) -Becker/Ninja MCQ/Ninja Notes
REG: 84(4/19/2015) -Becker/Ninja MCQ/Ninja Notes
BEC: 83 (7/13/2015) -Becker/Ninja MCQ/Ninja Notes

Date I Got My Life Back!: 8/4/2015 🙂

[imgonnabacpa]

Troblin : good luck.. Am testing on 4/20/2015 too.

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[Anonymous]

@imgonnabeacpa I worked 2,800 Ninja MCQs and some Becker and a handful of Wiley (primarily focused on Ninja). My average trending score was 90% and my average was 75%. I worked 5 problems from each section the morning of my exam just to “get my head right.” haha. I may be extreme with how many problems I practiced…but I was so stressed going into this exam. If I don't pass, I lose BEC. I recommend practicing problems in your weakest area. Read over your notes and just drill MCQs. At this point….you probably aren't going to learn much new material that is going to stick. Hard to say though….everyone is different. Just don't shy away from your weak areas!! That's always been my weakest aspect of studying. You can do it!

[Troblin]

@imgonnabeacpa

Thanks, good luck to you as well!

FAR: 85(11/22/2014) - Becker(full)/Ninja MCQ (5 day cram)
AUD: 79 (2/1/2015) -Becker/Ninja MCQ/Ninja Notes
REG: 84(4/19/2015) -Becker/Ninja MCQ/Ninja Notes
BEC: 83 (7/13/2015) -Becker/Ninja MCQ/Ninja Notes

Date I Got My Life Back!: 8/4/2015 🙂

[imgonnabacpa]

@CPABOUND2013 : Thanks for the encouragement … I Can and I will do it.. Else it might cost BEC.

I will do it for BEC , & my family who long to spend time with me.

@Troblin: Can you share your NINJA CRAM approach..

What all do we cram the last 3 days?? Share your experiences all.

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[Author]

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