[jeff]

Welcome to the Q2 2016 CPA Exam Study Group for REG.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

[Just3Letters]

How is an automobile for a light truck not a tax-deferred transaction?

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[CPA2BEE]

Maybe one is implied for business use and the other personal?

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[Anonymous]

^^yup. need more context i think

[jad11]

[Just3Letters]

I have a different question now haha. This question is asking for the gain to recognize which is obviously $5,000. I was just wondering about the tax basis in the new asset. It's $95,000 right? 100,000 basis in old asset – $5000 recognized gain?

Benson exchanged a van, used exclusively for business and with an adjusted basis of $100,000, for a new van with a fair market value of $120,000 and received $5,000 in cash. What amount of gain did Benson recognize from the transaction?

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[CPA2BEE]

I could never click with the calculation for new basis in like-kind problems, so I use the alternate method just cause it makes for sense to me. Here are my steps in figuring it out:

Realized Gain = 120,000 FMV new asset + 5,000 Boot – 100,000 Basis old asset = 25,000 realized gain
Recognized Gain = $5,000 (lesser of boot rec & realized gain)
DEFERRED GAIN = 25,000 – 5,000 = 20,000

New Basis = FMV new asset – Deferred Gain + Deferred Loss = 120,000 – 20,000 + 0 = 100,000 New Basis

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[CPA2BEE]

@Just3 In your calculation for basis you forgot to add back the boot received. That is why I would always get confused, too many add-backs and variables to remember

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[CPA2BEE]

Here is a problem I cannot figure out for the life of me, can anyone explain this?

Paul Pappas owns all of the stock of an S corporation which had previously been a C corporation. The S corporation had the following balances at the beginning of its tax year:

Accumulated adjustments account $ 8,000
Accumulated earnings and profits 10,000

Paul's stock basis was $20,000 at the beginning of the tax year. The S corporation made a distribution of $19,000 to Paul during the year. What is Paul's stock basis at the end of the year?

A.
$1,000

B.
$2,000

C.
$11,000

D.
$12,000

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[Anonymous]

is it B?

edit: wait, no…

[Anonymous]

C?
distributions to extent of AAA reduce basis, but to extent of E&P do not. and then the rest of the distribution would reduce the basis as well as a return of capital

[CPA2BEE]

Yes it is C. I just can't wrap my head around that! Any simple way of remembering?

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[.]

Looking at my book, C?

S Corporations are weird.

FAR - June 2016 - 88
REG - July 2016 - 89
AUD - Aug 2016 - review phase currently
BEC - Sep 2016 -

Wiley CPA Excel & Ninja MCQ

[Just3Letters]

Is the answer D? I think distributions are not taxable and decrease basis to the extent of AAA. Therefore, 8000 of the 19000 decreases basis right?

Oh, I forgot the other 1,000…

I am apparently NOT ready for this test

FAR- 81
REG- 81
BEC- Aug 22, 2016
AUD- TBD

[CPA2BEE]

The answer is C. I am really not grasping the concept behind it

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[Anonymous]

i made a table but can't really copy paste it over… one sec

[Author]

Replies