[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[shaulec82]

Hello everybody! I'm taking REG on Oct 17, so time to dust off the part of my brain where I stored business law and tax 🙂 Just getting into studying tax using Wiley CPAexcel and NINJA notes/NINJA MCQ. I hear the AICPA suggests reading the Internal Revenue Code to study for REG. I bet that's a riveting read 😀

AUD - 86
BEC - 81
REG - Nov 6
FAR - Jan 16

[leglock]

[Anonymous]

I have REG scheduled for 11/18 but am considering moving it up assuming I get can myself in gear to start studying soon!

I can see the light at the end of the tunnel, but I'm having a hard time jumping back in…. I'm soooo ready to be done… I'm stuck trying to decide if I should watch the lectures or just jump into MCQ's. Any advice?

[Anonymous]

I'm not sure I understand the difference between grant date and exercise date. Can anyone explain please

[Anonymous]

Grant date: the date the stock options were granted to the employee

Exercise date: the date that the employee actually exercises their right to purchase shares

[Evwy_Mom]

Hi,

I'm new here. I've failed REG twice (got a 72 on last try – passed everything else first try!) and thought I may get some help here.

Specifically, I just tried to do some MCQ and got hung up on this one:

Mullin, a director of Royal Corporation, wishes to sell a plot of land to the corporation. She is willing to sell the land for the fair market value but is concerned about a potential conflict of interest as a director dealing directly with her own corporation. Which of the following is(are) the minimum steps necessary for Mullin to not have a conflict of interest as director of Royal corporation?

I. She sells the plot of land to Royal in a fair and reasonable transaction for the corporation at the fair market value

II. She discloses her ownership in the land to the board of directors and the board approves the transaction.

III. She discloses her ownership in the land to the shareholders and a majority approves it.

The possible answers are:

I

II

I & III

I, II, & III

From my studies, I think as long as any one of these is met, there is not a conflict. So, while the wording doesn't exactly fit, my thought is that you would choose the last option, but that's wrong. Can someone provide some logic on this question?

AUD = 85
FAR = 79
BEC = 79
REG = 65, 72, 75!

I AM DONE!!

[rzrbkfaith]

@Evwy_Mom

I think that it just has to be a fair and reasonable transaction for the corporation… This was a topic covered in Becker for BEC.

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[Evwy_Mom]

Here's the Becker text I have:

…conflict of interest will only be upheld if:

a) After full disclosure the transaction is approved by a disinterested majority of the board of directors or the shareholders; or

b) The transaction was fair and reasonable to the corporation.

Does this whole question hinge on the words “disinterested majority”? That seemed unreasonably nitpicky, even by CPA exam standards.

AUD = 85
FAR = 79
BEC = 79
REG = 65, 72, 75!

I AM DONE!!

[rzrbkfaith]

Well, I guess the person could be on the BOD and also be a majority shareholder, so yes, disinterested majority would be key. Fair and reasonable was the only one of the two choices that matched the conflict-free definition completely.

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[shaulec82]

@Ewwy_Mom, the question says that Mullin is a director, so I think that precludes the “disinterested majority” (I agree, totally nitpicky). Based on the language of your Becker text (all those “or”s), I would think only one of those conditions need to be met in order to avoid conflict of interest. My guess is the *minimum* she could do to avoid a conflict of interest is sell the land in a fair and reasonable transaction at fair market value. Is I the answer?

AUD - 86
BEC - 81
REG - Nov 6
FAR - Jan 16

[justgivemea75]

Hi all,

I'm on Chapters 1 and 2 and am not understanding what the difference is between an Adjustment to Arrive at AGI, A Deduction from AGI to arrive at taxable income, and neither is. Does someone have a good way of remembering this?

Also, in regards to cpastudent's question, is the correct answer: 39,900. Here's the problem again:

In Year 1, Kane's residence had an adjusted basis of $250,000 and it was destroyed by a tornado. An appraiser valued the decline in market value at $425,000. Later that same year, Kane received $200,000 from his insurance company for the property loss and did not elect to deduct the casualty loss in an earlier year. Kane's Year 1 adjusted gross income was $100,000 and he did not have any casualty gains.

What total amount can Kane deduct as a Year 1 itemized deduction for casualty loss, after the application of the threshold limitations?

My thought was that you take the min of the basis and decline in MV (250,000), subtract the insurance proceeds (200,000), subtract 100 (why do we do this btw…is this just a random rule?), and then subtract 10% of agi (10,000). Is this correct?

FAR - 84
AUD - 76 (phew)
BEC - 88
REG - 77

DONE!

[rzrbkfaith]

@justgivemea75 – yes that is the correct answer

Also, adjustments are above the AGI line. They can by taken by Anyone is Always Allowed Any Amount As An Adjustment in Any Year (All the A's = Adjustment)

Be careful because they can be called deductions to arrive at AGI, but they are the same thing.

Deductions can be itemized or are standard – they are Team Tested Together and if Triumphant then Tax Deductible (basically you add all the itemized deductions together and if they are greater than the standard deduction, then you use them, otherwise use the standard deduction.)

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[Anonymous]

@Rzr, you studying on your Friday night as well?

The FAR group isn't conducive for group studying…

[Anonymous]

@rzr can you just teach the becker lectures? lol

I have a question on page R2-28 why is taking a cab from a day job to an evening job deductible? That just doesn't make sense to me.

Also, If I'm traveling for work,eating/sleeping out overnight for business wouldn't I use an employer credit card or wouldn't the employer pay for these upfront?

[rzrbkfaith]

@_Nick_ Yes, I'm totally studying. Sad, huh? My daughter is watching a Barbie movie while I listen to Tim Gearty. Exciting.

@cpa8488 – answering questions totally helps me study. If I can explain it to someone, then I know I understand it. 🙂 There is no rhyme or reason for the travel to a second job being deductible. Its just the rule. I guess its a benefit to those individuals/families that have to work more than one job to survive.

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16

[Author]

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