[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

[csvirk]

Good Luck Mckan!

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

[Fk]

My audit credit is going to Expire on May 31,2016 can reschedule my reg on 31 May 2016

[Claudia408]

mckan – did you see any DRS?

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

[mckan514w]

thanks csvirk! It would be nice to get a pass after my brutal FAR beat down!

Claudia Thank god no!!! No DRS. Like I said all of them outside of the research one and another one could have easily have shown up on FAR– ugh but no DRS

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[Just3Letters]

Mckan I'm sure you did good! I don't know how you test at 7:30 in the morning. I'm still reminding my eyes to stay open at that point!

I'm an afternoon tester!

Anyways, quick questions:

I know interest on municipal bonds is tax exempt, but if you take out a loan to get the funds to buy municipal bonds, is that loan interst tax exempt?

From the question:

Interest expense consists of $11,000 interest on funds borrowed for working capital and $1,000 interest on funds borrowed to buy the municipal bonds.

So is that 1000 interest taxable?

Thanks!

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

[Claudia408]

Hi Guys, when you are given a MACRs table, you simply have to multiply the cost basis by the rate on the table right? But if you are using a MACRs table for subsequent years (year 2 and so on), you need to multiply the new cost basis by the MACRs rate multiplied by convention (mid year, mid quarter, mid-month)?

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

[Fk]

In While wash sale how should we treat the realize loss.

[ahugemistake]

Was googling some stuff about the statute of frauds and came across this little jingle

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[ahugemistake]

Claudia I didn't get a single question in becker or on my last attempt where I had to use the MACRS table is this a new thing?

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[Anonymous]

does anyone know if there is a way to search the forum for a specific MCQ? I'm hoping maybe somebody else ran into this question and I can find my answer there.

I'm looking at Question #: 21 Category: 1A1 Treasury Department Circular 230

A CPA assists a taxpayer in tax planning regarding a transaction that meets the definition of a tax shelter as defined in the Internal Revenue Code. Under the AICPA Statements on Standards for Tax Services (SSTS), the CPA should inform the taxpayer of the penalty risks unless the transaction, at the minimum, meets which of the following standards for being sustained if challenged?

A. More likely than not

B. Not frivolous

C. Realistic possibility

D. Substantial authority

I picked D, but according to the explanation: “More likely than not” is now the standard for judging the chances of a position being accepted by the IRS and the courts. “More likely than not” can also be stated as “better than one chance out of two.”

Say what? I went back to my review material and it definitely says substantial authority. So then I actually looked up the SSTS and Regulations – Regulations say “substantial authority” and SSTS “realistic possibility” – do I just not know how to read?

WHAT IS HAPPENING?

any help?

[Anonymous]

@claudia – did you mean to say “if you AREN'T using a MACRs table for subsequent years (year 2 and so on), you need to multiply the new cost basis by the…” ??

If so, and if you're only talking about the first year/year placed in service – then yes, what you said makes sense to me.

[Anonymous]

@fayas I believe the loss from a wash sale is disallowed; the new stock would assume the old stock's basis and holding period.

[Anonymous]

@csvirk – because at the time of the gift the stock had dropped in value. This means Dunn has dual basis until the stock is sold. When he sells the stock, if it's a gain he will use his grandparents basis (to maximize the gain) and if it's at a loss then he will use the FMV (@ the time of the gift) as his basis (to minimize loss). However, if the sale price is between the basis and FMV (@ the time of the gift) then no gain/loss is recognized.

It gets confusing, but if the sale price is 29,000 and his grandparent's basis was 32,000 that would be a loss – since it's a loss he should be using FMV 27,000 as his basis which results in a gain – so he should be using basis – WTF NOBODY GETS ANYTHING!

The lesson here is, never accept a gift that is undervalued – however I doubt that will be an option on the exam.

[Claudia408]

ahugemistake – i didn't get a MACRs table in my 1st attempt either but they are practice Qs in NINJA.

allaboard – diid you do NINJA SIM #47? There is a calculation with a MACRs table for a truck:
Old truck depreciation: $44,000 × 25.5% × 50% = $5,610 half-year convention, 150% declining balance

25.5 is year 1 MACRs for 5 year property and 50% is the declining balance… why do you have to multiply by 50%? I thought the MACRs table was suppose to do that for you?

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

[Anonymous]

Per Wiley CPA:

Smith, an individual calendar year taxpayer, purchased 100 shares of Core Co. common stock for $15,000 on November 15, 2014, and an additional 1000 shares for $13,000 on December 30, 2014. On January 3, 2015, Smith sold the shares purchased on November 15, 2014 for $13,000. What amount of loss from the sale of Core's stock is deductible on Smith's 2014 and 2015 income tax returns?

a. 2014 $0; 2015 $0

b. 2014 $0; 2015 $2,000

c. 2014 $1,000; 2015 $1,000

d. 2014 $2,000; 2015 $0

Correct answer is a. States that this is a wash sale. I'm not sure why this is a wash sale?

[Author]

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