[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

[Anonymous]

for the dan wolf question, it looks like they're just asking for the amount that would flow through to dan – not necessarily what his taxable amount would be, because you don't have enough information to determine that.

[csvirk]

@allaboard
Thank You.

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

[Just3Letters]

I've memorized the answer to this question. I just don't understand why.

Can somebody explain to me the difference between “outside basis” and “capital”?

Stone and Frazier decided to terminate the Woodwest Partnership as of December 31. On that date, Woodwest's balance sheet was as follows:

Cash $2,000
Equipment (adjusted basis) 2,000
Capital: Stone 3,000
Capital: Frazier 1,000
The fair market value of the equipment was $3,000. Frazier's outside basis in the partnership was $1,200. Upon liquidation, Frazier received $1,500 in cash. What gain should Frazier recognize?

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

[Spartans92]

Just3, the outside basis is the interest in the partnership or the S-corp. Theres also inside basis which is the basis of the property contributed (simply the basis in the asset). Not sure if that is helpful. Haven't gotten too far yet but thats all I recall from tax class.

BEC- PASS

[alanam]

Made it!!!!!

75 hahahaaaaaa

FAR - 79 (Expires 8/31/16)
AUD - 75 (Expires 11/30/16)
REG - 66 (June 8 Retake)
BEC - 88 (Expires 8/31/17)

[Anonymous]

guys for the upcoming july window for the REG, should i use Becker V1.2 or V1.3?

[Shawc21]

ABdulrahman, I believe V1.3 is the most up to date version for Reg for July. My Becker allowed me to pick which book I had for the lectures, however.

AUD: 89 (6/8/16)
REG:
FAR:
BEC:

[Just3Letters]

Definitely 1.3

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

[pssycrusher94]

Kind of confused about REG test.

Can I bring in a packed lunch or not? Was told I could not for BEC and FAR.

Also, what is the protocol for bringing in a hard copy of the IRC? My granddad gave me one before he passed away and I would like to use it.

Thanks,

pssycrusher94

BEC- 51
FAR-44
AUDIT- ?
REG_ ?

[Claudia408]

Rental question – if you rent out part of your home but also use it as your home a majority of the time (both greater than 14 days), how does this affect expense deductions? is it just a straight % use allocation?

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

[Spartans92]

Claudia, if you rented the home for more than 15 days you have to prorate between personal usage and rental use. No Rental loss is allowed and the rental expenses are deductible to the extent of rental income. Also, the depreciation, utilities are deductible but uses a different proration than for property related expenses like taxes and interest. Any specific examples?

My question is related to the SIMS. Here is the question:

Richard Norton is required to pay a self-employment tax based on the net profits of the farm business. For purposes of this task (Self-Employment Tax), assume that Richard had a net profit of $105,000 from the farm business for Year 3 and $10,000 of Section 1231 gain. Also assume that the maximum net income for social security tax is $117,000 for Year 3. Assume the following rates: 12.4% for social security and 2.9% for Medicare.

The call of the question is asking for net earnings from self-employment. How do i figure this out. The solution simply states 92.35% is net earnings without any further explanations. Is this a rule or something? I dont understand where they derive the percentage. This is for Chapter 1 the 2nd tab for Simulation 2 (Becker). Thanks for the help.

BEC- PASS

[Claudia408]

Spartans – thanks for that, I don't have examples yet but trying to find one lol.

I think to answer your question is yes. if you're self employed you can deduct half of the self employment tax which is something like 15.3% so if you divide that by 2 you get 7.65% which I think is your difference.

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

[Claudia408]

back to the rental question though… let's say i made $5,000 in 2015 in rental income. i also have expense of $11000 painting the house where half the time it was my personal dwelling and the other half the time it was rented. this means i can only deduct $5,000?

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

[Spartans92]

Claudia, assuming you rented for more than 15 days. let's make this easier you rented the home to me for 3 months and you lived there for 6 months. The rest of the time it is empty. So 3/9 of 11,000 expenses are deductible against your rental income (5,000 in this case). I guess that is how you do it. To further illustrate let's say you have real estate taxes of $2,400 you also prorate this. Then that would be 3/12 of 2,400 which would be deductible against your rental income as well.

Simply put, your property expenses like painting, utilities etc are allocated based on rental period/annual usage. While your mortgage and property taxes etc are allocated based on the rental period/ total annual period. I think thats how you do it when it comes to rental income. Anyone else can add more? I have to go back to the reading for self-employment cuz I dont recall that 15.3% lol. Thanks tho.

BEC- PASS

[Claudia408]

Spartans- ahh ok yes that's a little more clear. Thanks!

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

[Author]

Replies