[jeff]

Welcome to the Q4 2016 CPA Exam Study Group for REG.

If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).

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

[Namstut]

@kziegler718 one glass won't make it better! Lol!

When is your REG?

Working though 100 review MCQs in Becker. For the life of me I can't grasp the concept of the Exchange of Like-Kind! It's not complicated but it is so convoluted that my fried brain just draws blank on these questions!

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[FLACPA]

@Namstut – I’m with you on the like kind exchanges and is it basis or FMV or lesser of what? I’m so desperate I googled “how to remember basis in like kind exchange” and about 200 You Tube videos came up. My test is just hours away. I should have realized this 2 weeks ago!
I will definitely be up for a drink once this test is over!
Good luck to all!

FAR 65 8/17/15 (NINJA Notes/Book/Audio/MCQ) retake 4/3/16 61 (Gleim didn't study)3rd try Nov '16
AUD 11/24/15 (Gleim)75
REG 8/3/16 (Gleim) Just ordered NINJA audio
BEC TBD

[Anonymous]

Do not over-analyze like-kind exchanges. Just memorize the formulas, then brush your teeth and go to bed. LOL

P.S.
I don't mind sharing my improvised formulas if you're interested:)

[HoosierCPA]

Let's hear it

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[FLACPA]

Yes, please! Anything to help retain it for the big day.

FAR 65 8/17/15 (NINJA Notes/Book/Audio/MCQ) retake 4/3/16 61 (Gleim didn't study)3rd try Nov '16
AUD 11/24/15 (Gleim)75
REG 8/3/16 (Gleim) Just ordered NINJA audio
BEC TBD

[Anonymous]

This is my nth time sharing these formulas. I hope this helps.

Like-Kind Exchanges

[kziegler718]

I struggled with exchange of like kind as well, until I broke it down into 4 steps & just drilled it into memory.

1. Gain/loss realized= (FMV property received + boot) – cash paid – adj. basis property given up
2. Gain recognized= lesser of realized gain (step 1) OR boot received
3. Gain/loss deferred= gain/loss realized-gain/loss recognized
4. Basis of new property= FMV property received – deferred gain + deferred loss

Note- realized loss is never recognized in like kind exchanges
Also- boot includes net relief from liabilities

Hope this helps! I made a notecard using the formulas outlined in the becker examples & it helped me cruise through the related MCQs.

Reg is on Dec. 6th… cutting it close but I start working full time in January so I figured it was worth a shot!

[HoosierCPA]

Interesting, Not sure I've seen this whole “deferred G/L”. For those who are having a hard time grasping it could be helpful. I've stuck with the Becker method since day 1 so I probably won't switch but that's helpful!

You also have a lot of tid bits in there that I'm not even sure I've ever known. Good stuff! haha

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[FLACPA]

Thank you both. This is very helpful!!!

FAR 65 8/17/15 (NINJA Notes/Book/Audio/MCQ) retake 4/3/16 61 (Gleim didn't study)3rd try Nov '16
AUD 11/24/15 (Gleim)75
REG 8/3/16 (Gleim) Just ordered NINJA audio
BEC TBD

[Namstut]

@Amor D and @kziegler718 thank you! This was really helpful!!

I am terrible at taking notes and making flashcards, I can never find anything in my mess of a notebook.

I didn't see the Deferred Gain/Loss in Becker in connection with the Like-Kind Exchange so I am going to take a mental note of it.

@FLACPA good luck!! Please come back and let us know how it went!!

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[HoosierCPA]

So I'm going to try and abbreviate a long winded question.

Basically there are 2 individuals who forms a corp with Land and a Building. Member A donated the building for 40k which had a 10k mortgage which the corp assumed. A acquired 60% while member B acquired 40% of stock. They want to know the basis for member A.

My original thought was “ok this is easy”…take the basis of the building and subtract members B ownership %..so in this case (40k minus (40% of 10k) which is 36k).

36k wasn't an option. What they wanted was since the corp assumed the mortgage to deduct the entire 10k from the basis to bring you to 30k…what am I missing? Is this another example of a corp vs partnership? If a corp assumed a mortgage you deduct the entire mortgage instead of just the % you don't own?

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[HoosierCPA]

2nd question:

Alex Barbone inherited his mother's house when she died in Year 4. The value of the house was $450,000 at the time of death, based on actual sales in the city. Her original basis in the house was $26,000 and she had lived there for 44 years. Alex had not lived in the house except for short visits. Alex paid $6,000 for taxes, insurance, and utilities for the next year. He also was advised by his real estate agent to spend $18,000 on maintenance and repairs, which he did. Unfortunately, the local market suffered a loss of 12% in the average sales price of houses. Alex was finally able to sell the house in Year 5 for $396,000, net of commissions and sales costs. What is the capital loss or gain on the sale of the house?

A.$100,000 gain

B.$54,000 loss

C.$60,000 loss

D.$78,000 loss — CORRECT

I understand exactly how they got their number–my issue is I didn't think you could take a loss on an inherited property. Am I going crazy? He has nothing invested in the property but yet can take a loss???

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[Namstut]

@dtatham10 yep, corporate shareholders deduct 100%, partnerships deduct the percentage absorbed by other partners.

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[HoosierCPA]

@namstut geez I've taken this exam 3 times and its amazing the things that fall through the cracks lol. Either that or I knew it at one point, forgot, and now I'm relearning it! Either way, still frustrating!

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[Namstut]

@dtatham10, this IS frustrating! Sometimes I see a question on this board and I have to go and look it up in the book because I could swear it wasn't covered. Well, obviously it was and I can always find the answer but there is SO much to remember!

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[Author]

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