[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

[CPA2BEE]

@Just3Letters – The basis in the unrelated party transaction is the purchase price of the related party transaction. If the unrelated transaction is sold at a gain, and the related transaction would've resulted in a loss, then Gibson's gain in the unrelated transaction is offset by the unrealized loss that his child had in the related transaction.

Related Transaction:
12,000 Sales Price – 16,000 Basis = (4,000) Unrealized loss

Unrelated Transaction:
18,000 Sales price – 12,000 Basis – 4,000 Unrealized loss = $2,000

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

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

[CPA2BEE]

In my above post – “Unrealized loss” is not the proper verbiage, but rather the “Disallowed loss” reduces Gibson's gain. Tomato, tomoto…

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

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

[Just3Letters]

CPA2BEE, THANKS! I totally get that. The gain is disallowed to the extent of the unrealized related part loss.

Claudia, I didn't find anything helpful. Only gift tax rules. But CPA2BEE is a good teacher 🙂

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

[Just3Letters]

Trending 74%. I typically do my MC in sets of 100. However, no matter how many I do… I'm ALWAYS getting scores right around 75. Just did 100 and got 76%.

What can I do to stop living on the edge 🙁

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

[Claudia408]

CPA2BEE – was that a dual basis question? like you did need to know the sold price before you know what the gain/loss is or am I thinking of something else?

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

[Anonymous]

Can not figure out ESO's( ISO, ESPP, Qualified). Becker does a medicore job of explaining it in my opinion. Can anyone help explain this concept or direct me to a good reference.

Thanks.

[Just3Letters]

Dmb2stepper,

for those ESO questions, I just memorized one thing and it has gotten me through many questions:

The only taxable ESO is “Non-Qualified”

Also, other ESOs are captial gains later on if sold

That's all I remembered.

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

[CPA2BEE]

@Claudia I think you are confusing this with the sale of gifted property. For example, the person receiving the gifted stock generally uses the same basis as the person gifting the stock at the time of the transfer. But if they subsequently sell the gifted stock at a loss and the FMV is less than the donor's basis, then FMV is used as the basis for calculating the loss instead of the donor's basis. I think that is what you mean by “determining basis at the time of sale”

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

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

[csvirk]

@Jus3

If two related party engage in a transaction and loss is occurred as in above question. That loss is deferred until stock is sold to 3rd unrelated party. Deferred loss can only used again the gains in third party transaction and any remaing loss (after using against the gains) is not allowed to carryforward. For example

Father bought the shares from his child for 12K and Child basses was 14K

later Father sold those share for 13K.

Father can only use 1k (unrealized loss) against his 1k gain to bring his gain down to zero.

Remaining loss of 1k will lost forever. he is not allowed to carryforward the remaining loss.

hope this makes sense.

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

[Just3Letters]

Thanks csvirk, I pretty much get it. I'll have to review that in the text for sure.

In other news, just did the recently released moderate questions and got 18/20. Now to try to difficult ones…

Update: Wow. Difficult is WAY more difficult. got 12/20 🙁

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

[Just3Letters]

For accrual questions, how do we know whether to do normal BASE accrual thing (like FAR) or just deduct the current expense.

For example:

7. Lite-Mart, a C corporation, had a beginning credit balance in its warranty reserve account of $120,000.
During the year, Lite-Mart accrued estimated warranty expense of $16,000. At the end of the year, LiteMart's
warranty reserve had a $90,000 credit balance. What amount of warranty expense should LiteMart
deduct?
A. $46,000
B. $30,000
C. $16,000
D. $14,000

I originally calculated the 46,000 but then switched my answer to 16,000. Tax is typically cash basis. Obviously this C Corp is accrual because they are accruing warranty expense, ugh, so lost. Should I just typically do the full accrual expense for the deduction?

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

[Claudia408]

Just3 – was that the 2015 or 2016 AICPA released questions? I got a similar score for moderate and difficult. My 2nd attempt at Reg, comparable on MCQs, weaker SIMs, so I think they were VERY VERY weak! I think the SIMs will make or break you.

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

[Just3Letters]

2016…

what do you mean weaker sims? Do you mean AICPA told you that you did weaker on sims than mcq?

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

[Claudia408]

i guess since i live in Cali they give the score and tell you if you were weaker, comparable or stronger in each MCQ category as well as overall, and in SIMs.

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

[Just3Letters]

Oh I see what you're saying

I just don't know how to prepare for SIMS. On the Becker final exams some of the sims I got 100% and some of them I completed bombed

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

[Author]

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