[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]

^^^@Dr Cash that is the calculation I was talking about. I really hope I don't see this on my exam lol

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

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

[Just3Letters]

Thanks everyone! Yeah that calculation isn't long or difficult, it's just tricky.

Claudia, you aren't alone. We are all struggling with this exam. REG in particular I think. This stuff is pretty freaking hard. Just remember that these are the last tests we ever “have” to take. Keep it up and it will be over soon 🙂

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

[CPA2BEE]

@Just3 and Group – think of the basis questions prior to this one, and then work this one. Should help bring this topic to light….

Adams, Beck, and Carr organized Flexo Corp. with authorized voting common stock of $100,000. Adams received 10% of the capital stock in payment for the organizational services that he rendered for the benefit of the newly formed corporation. Adams did not contribute property to Flexo and was under no obligation to be paid by Beck or Carr. Beck and Carr transferred property in exchange for stock as follows:

Fair Percentage of
Adjusted Market Flexo Stock
Basis Value Acquired
——– —— ————-
Beck 5,000 20,000 20%
Carr 60,000 70,000 70%
What amount of gain did Carr recognize from this transaction?

A.
$40,000

B.
$15,000

C.
$10,000

D.
$0

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

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

[CPA2BEE]

Sorry not the prior basis question, but the one concerning transfers from “Controlled Groups” to C Corps

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

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

[Bear-Bear]

Should be $0, right? Since it was transferred with control?

[CPA2BEE]

@Bear-Bear – bingo. This is something I need to start considering every time with a basis question. So we know this is true for C Corps, and only C Corps, right? Partnerships don't have anything for controlled groups?

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

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

[Spartans92]

CPA2BEE, I think section 351 applies to C-corp only. Therefore, the control requirement only applies to C-corp and not partnership. Section 721 is similar to 351 for partnership allowing the deferral of recognition of gain with the difference of not having the control requirement.

Note: if the transfer was prearranged section 351 may not apply. Though, I have not seen a question like this in becker but it was something I saw on my tax exam last semester.

BEC- PASS

[CPA2BEE]

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

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

[Spartans92]

at this rate we will surpass FAR! :):) love this group!

BEC- PASS

[CPA2BEE]

@Spartans you are right, contributing partners only recognize gains when liability exceeds basis or they render services in exchange for partnership interest. I just looked this up in the Becker book and there is nothing concerning controlled group transactions for partnerships. So only need to think of that for C Corps!

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

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

[Bear-Bear]

Hurry up, Saturday. I'm ready. Bring it ON!

[Spartans92]

Kill it BEAR! GOOD LUCK!

BEC- PASS

[Bear-Bear]

🙂 Thanks!

[CPA2BEE]

Go get em Bear, I am itching for Tuesday myself…

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

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

[Bear-Bear]

And then we get to wait a month for scores. Yay!

[Author]

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