[jeff]

Welcome to the Q3 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]

You know what Melissa, when I saw that question I threw up my hands. IF the HDC designation and is supposed to protect people from getting ripped of becuase they take a negoitiable instrument in good faith and (yet) the question points to someone having HDC status even though they have knowledge of a fraud…. Fine – just what do they want us to learn here.

OK, OK, – I guess they want us to learn this:
The holder-in-due-course doctrine is important because it allows the holder of a negotiable instrument to take the paper free from most claims and defenses against it. Without the doctrine, such a holder would be a mere transferee. The UCC provides that to be an HDC, a person must be a holder of paper that is not suspiciously irregular, and she must take it in good faith, for value, and without notice of anything that a reasonable person would recognize as tainting the instrument. A payee may be an HDC but usually would not be (because he would know of problems with it). The shelter rule says that a transferee of an instrument acquires the same rights her transferor had, so a person can have the rights of an HDC without satisfying the requirements of an HDC (provided she does not engage in any fraud or illegality related to the transaction).

So I guess just knowing about the fraud does not meet the standard of “engaging” in the fraud?

[CPA2BEE]

@Teal you can take ethics whenever you want in CA, and I'm pretty sure its the same in all states. Its administered through your state CPA society, not NASBA – so rules may vary for each state.

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

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

[Teal]

@CPA2BEE, wow I had no idea! Everyone at my firm seems to think you can't take it until you're done with the tests.

Anyway – I have a question about this question in the NINJA book:
Alex, single, incorporated his business by investing $80,000 for which he received Section 1244 stock. Alex also loaned the corporation $20,000. The corporation became bankrupt and Alex lost the entire $100,000. What should Alex report as a result of the bankruptcy?
Answer: $50,000 capital loss and $50,000 ordinary loss

I got this right when I was reading it, but here's the explanation: A loss from Section 1244 stock is treated as an ordinary loss (up to $50,000 if single). Any loss in excess of $50,000 is treated as a capital loss.

So my question is about the $20,000. How do we know this is automatically treated as capital? Is an amount that he loaned part of the Section 1244 rule? Or is just any amount loaned would be considered capital anyway?

Thanks!

FAR (66,68) Aug 26
REG (66) July 25
AUD (66) December 1st
BEC - October 3rd

[melissahoff]

@CPA2021 – RIGHT?! My hands were in the air too! I think it definitely has to to with the Shelter Rule. As soon as @Teal mentioned that, I looked it up and it sounded right. Just goes to show how much little detail is in this thing, I must have glazed over that rule.. oops 🙂

@ Teal – my impression is the same as the very last question you asked “Or is just any amount loaned would be considered capital anyway?” This was my initial thought on it, although I don't have any rule or reference to back that up.

AUD - 74,72,74,73,67,80
BEC - 69,80
FAR - 50,51,50,74,71,79
REG - 69, 72, 81.. and I am DONE...
Ethics-93

[Anonymous]

But even if you know the shelter rule, the candidate would remember the caveat about fraud. And logically, the intent of the statute would be to prevent someone from taking advantage (e.g., knowledge about the fraud = participating in the fraud.)
l

[Lynnchu]

I just got out of REG exam today and I'm pretty sure I'm going to fail it. There were a LOT of questions on chapter 5 Becker book (not sure if other books are the same) which everyone said there's a small percentage showing up on the exam. It's the chapter about CPA liability, penalties imposed on CPA (when and how), reportable transactions, private letter, the IRS etc… I did not spend time heavily on it so there were concepts that you really can't make educational guess if you don't know what it is.

Questions on C Corp S Corp partnership basis are way easier than the ones posted on here. They were pretty basic ones. A lot of questions are about estate income as well.

Oh well I can't face the feeling I'm going to retake it because I know I bombed it.

Good luck to everyone else!

[melissahoff]

@CPA2021 – I totally hear you! It still doesn't make any logical sense to me, I am just going to try to remember the rule haha story of my life!

AUD - 74,72,74,73,67,80
BEC - 69,80
FAR - 50,51,50,74,71,79
REG - 69, 72, 81.. and I am DONE...
Ethics-93

[Anonymous]

Melissa perhaps that is why the question has been retired.

[Teal]

@lynnchu I'm so sorry!! You'll get it next time 🙂 But thank so much for taking the time to share with us what was on the exam.

FAR (66,68) Aug 26
REG (66) July 25
AUD (66) December 1st
BEC - October 3rd

[Teal]

So with regards to the new rule that corporation returns are now due on April 15th, what about things like paying dividends by March 15th? has that now changed to April 15th even though the old questions still say March?

FAR (66,68) Aug 26
REG (66) July 25
AUD (66) December 1st
BEC - October 3rd

[CPAdestined11]

@Lynnchu taking REG tomorrow, ill post feedback on here once i get home! Here's to nothing!

[CPAdestined11]

Hi like I said above I am taking REG tomorrow. Anyone that has Roger..how did you do on the test in relation to his quizzes and practice exams? Thanks!

[Anonymous]

Good luck @CPAdestined11!!! 🙂

[Just3Letters]

Good luck CPAdestined11! You got this!

May the sims be ever in your favor!

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

[Tncincy]

Testing in a few days….not READY!!!!!….don't know what to do or how to feel. still not getting that score up,,,too many stupid mistakes, o.k rant over back to mcq's

It begins with a 75
Been here too long as a cheerleader....ready to pass

[Author]

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