[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

[Claudia408]

I really don't understand wash sales.

Sands purchased 100 shares of Eastern Corp. stock for $18,000 on April 1 of the prior year. On February 1 of the current year, Sands sold 50 shares of Eastern for $7,000. Fifteen days later, Sands purchased 25 shares of Eastern for $3,750. What is the amount of Sand's recognized gain or loss?

I understand that losses within 30 days are not recognized but what am I supposed to look for after that? Here's how I'm looking at this problem, but I'm not thinking of it the right way bc the answer is 1,000…
shares price per share total
buy 100 180 18000
sell 50 140 -7000
buy 25 150 3750

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

[Claudia408]

Also, why is the answer to this question ORDINARY and not 1231? The Farmer is using the truck for business. The explanation says: “IRC Section 1231 is modified by IRC Section 1245, which states that personal (versus real) property’s depreciation taken must be recaptured as ordinary income first.”…. So…What is it about personal & real property that I'm missing?

A sole proprietor of a farm implement store sold a truck for $15,000 that had been used to make service calls. The truck cost $30,000 three years ago, and $21,360 depreciation was taken. What is the appropriate classification of the $6,360 gain for tax purposes?

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

[melody_pinaycpa]

Claudia – gain on 1231 assets is ordinary to the extent of the depreciation of the asset. 6,360 gain is still within the 21360 depreciation.

FAR (Apr 2015) - 88
AUD (July 2015) - 86
BEC (Oct 2015) - 82
REG - 73, 70, retake Sept 2016

[melody_pinaycpa]

@Claudia on wash sales – sale of 50 shares was 2k loss then Sands purchase 25 shares (half of 50 shares) so only half of 2k is recognized or 1k.

FAR (Apr 2015) - 88
AUD (July 2015) - 86
BEC (Oct 2015) - 82
REG - 73, 70, retake Sept 2016

[Anonymous]

[Claudia408]

Melody – Thanks, so for the 1231 question, do you know how the real vs personal property is relevant?

For the wash sales… only half of losses are recognized in general or half recognized bc half were bought and then sold?

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

[Lynnchu]

@claudia only half of losses are recognized because only half was bought back 15 days later. If she had bought more than 30 days later, she would be able to recognize 100% loss on her sale Feb 1. Or if she had bought 50 shares back 15 days later, she would not be allowed to recognize any loss on her sale Feb 1.

One of the simulations on my REG test I took last week was about a person died on year 2, and he had bunch of interest, dividend, etc…. The questions were about which item to report on his LAST 1040, and which item goes on his 1041. Does anyone know where to report which?

[rajwinder84]

10. Rental property simulation: 50% home and 50% rental property.
Suppose:
Utility $5000
Painting for rental property $2000
AC repair for both $1000
Home room repair $2000
Mortgage for both 5000
Insurance $600
Real estate $1500
Lawn service $200

Itemized deduction(Home) Sch. E (Rental property)
Utility $0 $2500
Painting piece for rental property $0 $2000
AC repair $0 $500
Home repair $0 $1000
Mortgage $2500 $2500
Insurance $300 $300
Real estate $750 $750
Lawn service $0 $100

Please correct me above question where I did wrong?

[Claudia408]

Rajwinder- where is this sim coming from? What does the answer say? Very curious about this one, been wanting a sim just like it!

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

[Tncincy]

It looks correct as far as numbers but make sure that the home/rental days are accurate. I assume the 50/50 is given in the question.

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

[rajwinder84]

Hi Claudia, i saw this one on my exam. The numbers are not real, I just remember little bit and made this question. I am trying to get the correct answer.

[rajwinder84]

Tncincy, thanks for reply. I am going to take my second try on 20th July. I failed on 69 first try. I have one more question come up:

Which condition, the creditor don't have to notify the debtor?
Creditor can sell the collateral without notify debtor.
OR creditor can keep the collateral without notify debtor.
Please explain which one is correct?

[CPAdestined11]

Hey guys! Took REG today felt pretty good about it actually, not sure if thats a good thing bet you never know. I felt horrible when I walked out of AUD and did'nt feel that way for REG. It was hard to tell if the MCQ where actually getting harder but, the questions definitely got more in depth and had some questions where it could of been 2 different answers so I am not sure if that means something! The SIMS were crazy tough!!

[Anonymous]

took REG today as well. i felt much better prepared going into this exam than i did FAR but i left feeling the same as i did on the last one (not good haha). i think it will be close either way… blehhh. here's to waiting a month to find out…

the sims were as hard as i expected, except i'm not even sure i got the research question right, there wasn't a document review (in the way i was expecting), and of course an AMT ://///

[Tncincy]

Best of luck to you Dr Cash, keep those fingers crossed for the rest of us.

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

[Author]

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