[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

[Tax lady]

@mama You have a deal!

@CPA. I'm sure using 2013 gets confusing. :-/

REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
AUD 5/30/15 (80)
BEC 11/28/15 (75)
FAR 7/30/16

Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

[Anonymous]

Need help on this question.

Kirk Bennett, a cash-basis taxpayer, is a self-employed accountant. During 2013, he established a qualified defined contribution retirement plan of which he will be the only beneficiary. In examining his records for 2013, the following information is available:

Earned income from self-employment – $51,000

Interest income – $6,000

Dividend income – $4,000

Net long-term capital gains – $10,000

Adjusted gross income – $71,000

What is the maximum amount that Kirk can deduct as a contribution to his qualified retirement plan for 2013?

[Anonymous]

Nvm, I figured it out.

[Tax lady]

@CPAby2015. My initial response would be $5,500. But I'm sure that answer is too simple and there is some caveat that I haven't thought about. The maximum amount he can contribute is $17,500. But the maximum amount he can deduct is $5,500. Right??

REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
AUD 5/30/15 (80)
BEC 11/28/15 (75)
FAR 7/30/16

Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

[Anonymous]

Answer was $9420.00 calculated as follows:

Earned Income $51,000

Less: Self-employment tax adjustment (I believe this is FICA?)

($51,000*.1530*1/2) = (3,902)

Net Earnings $47,098

Multiply by contribution rate 0.20 – WHERE DID THEY GET THIS RATE?

Allowable deduction $9,420

[linkman311]

^^ Dang I've never seen a question like that whatsoever and I've done every Becker question. What software are you using? Kinda worries me

Confidence is a prerequisite for success

FAR - 1/1
AUD - 1/1
BEC - 1/1
REG - Q4

Have Becker, wish I got Roger

[Tax lady]

Ummm, yea that's kind of crazy. I'll just pretend like I never saw that. lol

REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
AUD 5/30/15 (80)
BEC 11/28/15 (75)
FAR 7/30/16

Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

[Anonymous]

@linkman311 I'm using Gleim. As long as you understand the concept of the question, you should be good. I just have no idea of the 20% contribution rate. I'm not even sure if it was on the book.

[Anonymous]

@Tax lady Lol. I also do that. If I can't grasp it, I just shrug my shoulder and pretend as if I never saw it. Btw, I think the $5500 is applied if the income is not from self-employment? Also, normally the question will provide the age of the taxpayer since there's a different amount if the taxpayer is 50 (I think) & above.

[Anonymous]

reg is so confusing…

[linkman311]

Haha me too!

Is this one of those Keogh plans I wonder? I remember Becker saying something about $52,000 being the max contribution or something like that but there's never a calculation.

Confidence is a prerequisite for success

FAR - 1/1
AUD - 1/1
BEC - 1/1
REG - Q4

Have Becker, wish I got Roger

[Anonymous]

Is the lifetime exclusion for gifts still 1,000,000 at 55%?

[Tax lady]

$5,340,000 and 40% rate after that.

REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
AUD 5/30/15 (80)
BEC 11/28/15 (75)
FAR 7/30/16

Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

[WANNABE_CPA]

How is everyone doing?

@Taxlady…How is it going? You might be at last review?

FAR : 68, 74, 83 Thank you God 🙂
BEC : 78 (8/27) 🙂
REG : 72 ,80 (2/25) 🙂
AUD : 69,67, 07/23

[Anonymous]

Wow, so back to 5,340,000 million? Once again, thank you very much!

[Author]

Replies