REG Study Group Q2 2016 - Page 85

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  • June 28, 2016 at 3:13 pm #768303
    csvirk
    Participant

    Martin's daughter, Kim, has one child, Dale. During 2016, Martin made an outright $7,000,000 gift to Dale. The gift is:

    A.
    subject to the generation-skipping tax.

    B.
    subject to the gift tax.

    Incorrect C.
    subject to both taxes.

    D.
    subject to neither tax.

    Correct Answer is B. But why!

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

    June 28, 2016 at 3:24 pm #768304
    S1CPA
    Participant

    @csvirk, I was literally about to post this exact same question. Can't figure out why Generation skipping tax wouldn't apply….

    AUD - 80 April 2015
    FAR - 77 August 2015
    REG - 60 October 2015, 73 May 2016, 75 July 2016
    BEC - 79 January 2016

    June 28, 2016 at 3:25 pm #768305
    S1CPA
    Participant

    .

    AUD - 80 April 2015
    FAR - 77 August 2015
    REG - 60 October 2015, 73 May 2016, 75 July 2016
    BEC - 79 January 2016

    June 28, 2016 at 3:26 pm #768306
    Bear-Bear
    Participant

    ^^It was something weird about how generation skipping tax only applies to “lifetime transfers” not to outright gifts. Yup…I missed it too. 🙁

    June 28, 2016 at 3:52 pm #768307
    Just3Letters
    Participant

    I have no idea what's happening here. I even looked up all the weird provisions of the GSTT that we don't need to know.

    somebody help!

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

    June 28, 2016 at 4:24 pm #768308
    csvirk
    Participant

    anyone made a cheat sheet with all the 2016 exemptions and phase out amounts ?

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

    June 28, 2016 at 4:27 pm #768309
    Claudia408
    Participant

    Based on my scores and # of attempts, I'm far from CPA grandmaster! BUT, I am trying to expose myself to new questions given it's my 3rd attempt. I have Wiley, Roger and Ninja. lol. I've seen ALL of Roger and Ninja questions, and most of Wiley bc of overlap but there are still new ones. So now I'm trying the new ones bc I Roger is too easy, and Ninja is good but SO MANY RANDOM questions that don't really seem like they will be tested.

    I need to do better at SIMS!!! I'm at work now – will try to past throughout the day. 🙂

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

    June 28, 2016 at 4:35 pm #768310
    Anonymous
    Inactive

    can i just say that i hate the wording of this question? i think my brain is exploding from all the electing to not elect and not electing to elect…..

    Jane and Jill are equal members in Duck, an LLC. Duck has elected not to be treated as an LLC. Duck has not elected to be taxed as a corporation. What is Duck not electing to do?

    A.
    Duck is electing to not be classified as a partnership.

    B.
    Duck is electing to not enter income on a Form 1040.

    C.
    Duck is electing to not be treated as an LLC or a corporation for federal tax purposes.

    D.
    Duck is electing to not be taxed as an individual.

    June 28, 2016 at 4:36 pm #768311
    Spartans92
    Participant

    Claudia, I have no doubt you will pass this time! As others have said third time is the charm!

    Dr Cash is it C? This has to do with the “check the box rule” or something?

    BEC- PASS

    June 28, 2016 at 4:37 pm #768312
    Anonymous
    Inactive

    @csvirk, i think this was posted earlier in the thread https://www.putnam.com/literature/pdf/II941.pdf

    @Spartans92, yeah, C

    June 28, 2016 at 4:42 pm #768313
    Spartans92
    Participant

    These questions suck because of the wording. The more one read the more confuse one gets. Not sure if you need the explanation but if they are not electing to be an LLC or Corp I believe the default is a partnership.. which is flow through entity and taxed as an individual. Hence, A, B, and D are all out.

    BEC- PASS

    June 28, 2016 at 5:00 pm #768314
    Just3Letters
    Participant

    I agree with Spartans! At least that is the reasoning I thought of!

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

    June 28, 2016 at 5:15 pm #768315
    Anonymous
    Inactive

    If partnership is the default way an LLC is taxed, in what circumstance would they elect to not be treated as an LLC but not elect to be taxed as a corporation?

    June 28, 2016 at 5:39 pm #768316
    CPA2BEE
    Participant

    @Dr Cash – they can elect to be treated as disregarded entities, like a single member LLC where essentially just information returns are filed with the state.

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

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

    June 28, 2016 at 6:08 pm #768317
    Just3Letters
    Participant

    If no election is made, LLCs are defaulted to be taxed as individuals (disregarded entities) if they have only one member, or defaulted to partnerships with more than one member. They can, however, elect to be taxed as a corporation. C-Corp status requires election.

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

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