[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

[HoosierCPA]

@JMG awesome! That's what I suspected but didn't have hard evidence to prove my suspicion so I left you hanging a bit. Glad you got the answer!

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

[Anonymous]

Had the seller included a note, it would have been an accomodation, and no breach of contract would occur.

[JMG]

@cessnapilot30 Correct. If that had been part of the fact pattern then the correct choice would be B.

@dtatham10 I guess it helps reading the textbook! lol

[pkhetan7]

Hello
I am currently studying Reg for my exam scheduled for February 2017.
I have cleared by AUD section and REG is the second subject. I have not tried for FAR and BEC so far. Plan to do that somewhere around July and October next year.

[hasy]

T-11 days, just finished all NINJA sims and Roger's SIM (tax only). Going to go over each one that I score below a 90 on.

How's everyone's studies going?

Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved - Helen Keller

-

BEC 80 (10/23/15)
FAR 72 (4/2/15); 83 (7/11/16)
REG 52 (4/28/15)
AUD (9/9/16)

Roger + NINJA MCQ + WTB

[Smallwood]

Hey fellow Ninjas,

Does anyone know if there has been a cheat sheet/quick reference guide to all the rules of business formations for REG? For example corp formations vs partnerships and S corps. The differences between them all, how basis is calculated, how gains are recognized, etc etc. It's all so similar but very different and it always confuses me!

FAR - 76
AUD - 74, 72
REG - 62, 74, TBD
BEC - 09/2016

[Pawn Maker]

Hey Everyone,

I bumped into this and thought I would share it. I have found the Alimony Recapture formula to be an incomprehensible mess, but I just found a shortcut version that has worked for each problem I have thrown at it. Hope this helps!

Recapture = Payment1 + Payment2 – 2*Payment3 – 37,500

Instead of…

R3 = R1 + R2
R2 = P2 – (P3 + 15,000)
R1 = P1 – [ (P2 – R2 + P3)/2 + 15,000]

[HoosierCPA]

@smallwood, not that I know of. It does get tricky though!

So here is one that I may be overthinking a bit. It's about estimated tax payments.

“A calendar-year taxpayer must make total estimated tax payments of $4,000 for 2016. To avoid an underpayment penalty, what amount should the taxpayer pay for each installment?”

Answer — $1,000

This sounds obvious but I was applying the 90% of the current year estimated tax rule–so 3,600 needed to be paid, which made quarterly payments $900. Am I wrong for this thinking–obviously Gleim thinks so but I wanted to see if I could get anyone to side with me here!

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

[Anonymous]

Your tax liability is known up front. And anything less than 4 quarterly payments of $1000 is technically an underpayment.

And actually rereading the question a second time, the 4,000 is the total TAX payments, and not the TAX LIABILITY if that makes sense.

I think the safe harbor rule is 90% of the current year's tax liability or 100% of the prior year.

[hasy]

Smart Corp., a calendar-year corporation, was formed in 20X3 and made an S corporation election in 20X6 that is still in effect. Its books and records for Year 10 reflect the following information:

Accumulated earnings and profits at 1/1/X13 $ 90,000
Accumulated adjustments account at 1/1/X13 50,000
Ordinary income for Year 20X13 200,000

Smart Corp. is solely owned by Roget, whose basis in Smart’s stock was $100,000 on January 1, 20X13. During 20X13, Smart distributed $310,000 to Roger. What is the amount of the $310,000 distribution that Roger must report as dividend income for 20X13 assuming no special elections were made with regard to the distribution?

$140,000

$60,000

$90,000

$0

Can someone please explain this problem to me? I don't even understand, which is quite bad since my test is in 10 days.

Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved - Helen Keller

-

BEC 80 (10/23/15)
FAR 72 (4/2/15); 83 (7/11/16)
REG 52 (4/28/15)
AUD (9/9/16)

Roger + NINJA MCQ + WTB

[Anonymous]

If you dont understand the basis of partnerships, C/S corps you will be in a world of hurt. More than 50% of my SIMS alone dealt with it to some degree.

But to the question at hand:

This was a C-Corp that elected S corp status.

Distributions to the extent of AAA(Accumulated Adjustment Account. This is S-Corp's undistributed earnings…sort of similar to retained earnings, but not quite) is not subject to tax and reduces stock basis.

Distributions to the extent of C Corp (earnings and profits) is taxed as a dividend

To the extent of stock basis is treated as a return of capital ( non taxable)

Excess of basis is taxed as long term capital gains.

[hasy]

Maybe I was exaggerating. I suck at S-corps but somehow, I'm better at P/S. But let me phrase this way. What I don't understand is HOW the answer is $60000.

Basis 100 + 200 (income) = 300 new basis

Let's break it down, distribution is 310 (omitting extra zeroes), 310-50 (AAA) = 260 remaining in distribution.

260 remaining – 90 (AEP) = 150 remaining

Therefore 90 is the amount of distribution that should be taxed as a dividend, is it not? Why is it 60?

Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved - Helen Keller

-

BEC 80 (10/23/15)
FAR 72 (4/2/15); 83 (7/11/16)
REG 52 (4/28/15)
AUD (9/9/16)

Roger + NINJA MCQ + WTB

[Anonymous]

Hello everyone, is there anyone here studying for REG from Louisville, KY?

[HoosierCPA]

@hasy had I answered that I would have chosen $90 as well so I'm not sure! I would like to see the explanation for there answer.

@belgrade cpa I'm technically a Indiana candidate but have sat for my exam in L'ville many times. It's about an hour from me.

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

[zomord]

Hello Everyone,

I knocked the BEC out of my way in October, I got 86 and it feels really good.
I took short break, and now I'm ready to start on REG. I Would like to set for the exam in January 2017, not sure in middle or end of the month but no later than January. I'm using Becker and I would like to ask the people who took the REG exam if they can provide any advise, recommendation, or suggestions.

I'm located in Dallas Texas and looking for study Partner. I do work full time and prefer to study by myself at home during the week days because of my unpredictable work hours.
However, I'm really willing to dedicate 8-10 hours in the weekends to study & it would be very helpful to do it with someone who has the same interest to keep up motivation.

If any one would be interested please let me know !

Good luck to you all

[Author]

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