[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

[Claudia408]

here's the explanation… i guess i wasn't clear on what is a redemption…
After the redemption, which was for a total of 100 shares, Yak owns 66/300 or 22%, So owns 76/300 or 25 1/3%, and Day owns 58/300 or 19 1/3%. To qualify as an exchange, a redemption must be substantially disproportionate, indicating that the shareholder’s ownership percentage is no greater than 80% of what it was before the redemption. Since Yak, So, and Day each owned 25% before the redemption, their ownership would have to be reduced to 20% or lower in order to qualify. As a result, only Day qualifies.

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[monikernc]

the corporation redeemed some shares meaning it bought the shares back from each shareholder. this reduced the number of shares outstanding from 400 to 300 and changed their %'s of ownership. Day's was the only one whose % of ownership was less than 80%*25% = 20%. Day ended up with 58 of the 300 shares = 19.33%

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Claudia408]

I got really confused with this question about what are Current E&Ps… I was able to calculate taxable income of $125,500, but I had to take it a step further to get to current E&P. I understand now current E&P is taxable income plus/minus certain adjustments, and that part I'm not clear on because I think what I had just calculated the same thing but obviously not!

Also, if this question had asked for the M-1 recon, would the answer be the $125,500 I had just calculated?

As of December 31, 20X14, Eliot Corp. has net income per books of $100,000, which includes municipal bond interest of $4,000, a deduction for business meals of $5,000, a deduction for a net capital loss of $5,000, and a deduction for federal income taxes of $22,000. What is Eliot Corp.’s current earnings and profits (Current E&P) for 20X14?

Answer: $102,500.

Someone please clear this up for me!

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[Claudia408]

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[monikernc]

claudia, i have the form 1120 printed that i use to help with mcq and sims.
the m-1 came out to 100,000 + 22,000 + 5000 + 2500 – 4000 = $125,500

current earnings and profit i calculated as $125,500 – 22,000 + 4,000 – 5,000 = 102,500

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[csvirk]

On June 15, Peters orally offered to sell a used lawn mower to Mason for $125. Peters specified that Mason had until June 20 to accept the offer. On June 16, Peters received an offer to purchase the lawn mower for $150 from Bronson, Mason’s neighbor. Peters accepted Bronson’s offer. On June 17, Mason saw Bronson using the lawn mower and was told the mower had been sold to Bronson. Mason immediately wrote to Peters to accept the June 15 offer. Which of the following statements is correct?

A.
Mason’s acceptance would be effective when received by Peters.

B.
Mason’s acceptance would be effective when mailed.

Correct C.
Peters’s offer had been revoked and Mason’s acceptance was ineffective.

D.
Peters was obligated to keep the June 15 offer open until June 20.

If Peter sent a written offer to Mason, Would C still be the right answer?

FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84

[monikernc]

i am doing business law now and impliedly is my new favorite word

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Anonymous]

C is the right answer because the offer comes to end upon destruction or sale of subject matter.
sale of subject revokes the offer when the offeree learn of it not when sold
so when Mason saw that neighbour is using lawn mower then offer get revoked.

[FAR_WARS]

“Normally, under state laws, only licensed profession- als may own shares in professional corporations. Furthermore, the licensed professionals retain personal liability for their professional acts in the professional corporation. Therefore (a), (b), and (d) are incorrect.”

so is McDonalds not a “professional corporation”? I'm pretty sure you don't need to be a “licensed professional” to hold shares of McDonalds.

Also: is the number of authorized shares required to be included in a corporation's Articles of Incorporation? I seem to have found 2 mcq's that contradict eachother.

Thanks!

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

[Anonymous]

Can anyone please explain me the concept of deducting 2% of unreimbursed business expenses.

I want to see the clear picture, correct me If I am wrong.
As an Employee, I expense $1000 business meal .
so we allowed to deduct 50% for meal before AGI
and for the rest 50% of 1000 we can deduct as Itemized deduction limit 2% of AGI
Is this correct?

[Anonymous]

Here is another example
An employee makes business expense of $10,000 and does not make an adequate accounting . employer reimburse only $5000.
then the employee should include $5,000 and claim entire amount as itemized deduction limit 2% of AGI.

and for the same example if employee maintains the adequate accounting the employee don't need to add the $5000 on his income nor deduct the expense up to $5,000 but can claim unreimbursed business expense up to $5,000 as itemized expense limit 2%.

please anyone help me to understand these rules.

[Claudia408]

nevermind, i think i figured it out… 🙂

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[Anonymous]

Is realization of Incentive stock option upon exercise is AMT adjustment item or preference item.

[monikernc]

Ano, it is discussed here:

https://www.amtadvisor.com/m.AMT_adjustments.html#ISOs

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[monikernc]

has anyone done ninja sim 21? why isn't the full $25,000 sect 179 deduction taken? it takes $12,000 for FF&E but none for the computers that cost $14,000 – no limits were exceeded and there was sufficient taxable income.

my attempt at sim was to take $12,000 for FF&E, then $13,000 of the computer costs, and apply MACRS to the remaining $1,000. the solution applied sect 179 to $12,000 and applied MACRS to the full $14,000 – this leaves $13,000 of sect 179 unused for the year. why?

can someone take a stab at it and see what they think?

thanks.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Author]

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