[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

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[ABTX411]

@SaveBandit & @FAR_WARS:

The refund is taxable. It can only be taxable if there was no tax benefit from the state tax when it was originally paid, indicating that the tax payer did take the standard deduction the prior year.

BEC - 90 - 2/04/2016
AUD - 97 - 2/29/2016
FAR - 92 - 4/19/2016
REG - 88 - 5/19/2016

[ABTX411]

@FAR_WARS:

The mini standard deduction is now $1,050 or EI + $350.

https://www.irs.gov/taxtopics/tc551.html

BEC - 90 - 2/04/2016
AUD - 97 - 2/29/2016
FAR - 92 - 4/19/2016
REG - 88 - 5/19/2016

[Anonymous]

Mike and Jane Lewis, a married couple, file a joint 2015 federal income tax return. They have one child, age 15, whom they support 100%. Both are under age 65. They have the following income and expenses for the year:

Mike's wages $65,000
Jane's wages 60,000
Total allowable itemized deductions 13,000
Mike's contribution to an IRA 4,000
Jane's contribution to an IRA 4,000

Mike is not covered by a pension plan at work, while Jane is covered by a plan at her employer.

The exemption amount (per exemption) for 2015 is $4,000. The standard deduction amount for married filing jointly is $12,600.

What is the Lewises' taxable income amount for 2015?

A.
$92,000

B.
$96,000

C.
$96,400
D.
$100,000

In Wiley book, it is written that “The maximum deductible IRA contribution for an individual who is not an active participant ,but whose spouse is , will be proportionately phased out at a combined AGI between $183000 and $193000.

So if the phase-out amount is in between $183000 and $193000 and there combined AGI is $121000 then why don't the contribution of Jane is deducted for computing the AGI

[Anonymous]

I am reposting this question ,anyone please help me.

[ABTX411]

@Ano:

Jane is not allowed to deduct her IRA contribution because she is covered by a plan at work. Mike's IRA contribution is allowed in full becaue the combined AGI is below the phase-out. If AGI was > than the phase-out, then you would have to adjust his contribution deduction as well.

BEC - 90 - 2/04/2016
AUD - 97 - 2/29/2016
FAR - 92 - 4/19/2016
REG - 88 - 5/19/2016

[FAR_WARS]

@ABTX411: thanks for the link.

Problem 1 we use 30% of AGI limit and in problem 2 we use 50% of AGI limit. Can anyone explain to me why?

1)
Stein, an unmarried taxpayer, had adjusted gross income of $80,000 for the year and qualified to itemize deductions. Stein had no charitable contribution carryovers and only
made one contribution during the year. Stein donated stock, purchased seven years earlier for $17,000, to a tax-exempt educational organization. The stock was valued at $25,000 when it was contributed. What is the amount of charitable contributions deductible on Stein’s current year income tax return?

=24,000

2)
Moore, a single taxpayer, had $50,000 in adjusted gross income for 2014. During 2014 she contributed $18,000 to her church. She had a $10,000 charitable contribution carryover from her 2013 church contributions. What was the maximum amount of properly substantiated charitable contributions that Moore could claim as an itemized deduction for 2014?

=25,000

EDIT:

The donation of appreciated stock held more than twelve months is a contribution of intangible, long-term capital gain appreciated property. = 30% limit.

and short term would be 50% limit?

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Anonymous]

@ABTX411
let me clear my doubts
1)if both married couples are the active participant in an employer retirement plan then IRA deduction will be proportionately phase out .
2) if none of them participate in the plan then no phase out.
3)if one of them actively participate then one who participate is not eligible for the IRA deduction.
and the other spouse who is not actively participating then ira deduction will be proportionately phase out.

assume married couple file jointly.

[Anonymous]

@ FAR_WARS
There are rules for the charitable donation for Individual
1 if Individual donates Cash then maximum limit of deduction is up to 50% of AGI
2. if donate Intangible property and it is long term intangible property then limit is 30% use FMV of property
if it is short term Intangible property then limits 50% use adjusted basis of property

3. if tangible property and it is long term then use FMV of property and limit is 30%
and if donate short term tangible property then use adjusted basis and limit is 50%
and if donate anything which is related to donee the take FMV and limit is 30%
and if not related to donee then take adjusted basis and limit is 50%

[ABTX411]

@ano – the phaseout will still apply (to both spouses) if neither spouse participates with an employer. If both participate, no contribution deduction is allowed for either spouse.

BEC - 90 - 2/04/2016
AUD - 97 - 2/29/2016
FAR - 92 - 4/19/2016
REG - 88 - 5/19/2016

[jonm857]

Becker pg R4-35…

“For individual taxpayers selling Section 1250 property at a gain, the gain is characterized as a Section 1231 gain and netted with other Section 1231 gains and losses to determine if the individual taxpayer has an overall net Section 1231 gain or a net Section 1231 loss for the tax year. However, when an individual has sold a Section 1250 asset at a gain and included the gain with other Section 1231 gains, an amount equal to the lesser of (1) the recognized gain on the sale of the Section 1250 asset, or (2) the accumulated depreciation on the Section 1250 asset, is taxed at a maximum rate of 25%. Any gain in excess of the amount that will be taxed at 25% is taxed at the preferential rates of 0, 15, or 20 percent.”

Wow.

B - 81
A - 87
R - 73
F - July 5th

[ABTX411]

^ Yep…. REG is beginning to make me an advocate for a flat tax.

BEC - 90 - 2/04/2016
AUD - 97 - 2/29/2016
FAR - 92 - 4/19/2016
REG - 88 - 5/19/2016

[FAR_WARS]

do I have this correct:

NOL's can be carried back 2 years or forward 20 years

and

PAL's are carried forward indefinitely or until the property is disposed

?

FAR- 80
BEC- 75
AUD- 78
REG- ?

[jonm857]

FAR WARS

For NOL, yes that's right.

For PAL, yes. For a partner in a partnership, it is also carried forward until passive income is available to offset. This might be true for regular individuals also… not sure.

B - 81
A - 87
R - 73
F - July 5th

[Anonymous]

I am sorry if I am over doing this,but this is what make me confuse or maybe my understanding is completely wrong.
here is a link to Wiley book related to IRA

https://books.google.com/books?id=B2ayAwAAQBAJ&pg=PA491&lpg=

[jonm857]

I'm on a mission to destroy Ch.s 1-4 for the next 8 days. And I mean DESTROY these chapters. Who's with me?

WHO????

Watch this link and you will join me.

B - 81
A - 87
R - 73
F - July 5th

[Author]

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