[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).

[HoosierCPA]

i knew this…geez. I need to go to bed. lol

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

[HoosierCPA]

Magic Corp., a regular C corporation, elected S corporation status at the beginning of the Year 3 calendar year. It had an asset with a basis of $40,000 and a fair market value (FMV) of $85,000 on January 1, Year 6. The asset was sold during Year 6 for $95,000. Magic's corporate tax rate was 35%. What was Magic's tax liability as a result of the sale?

A.$0

B.$3,500

C.$15,750 — CORRECT

D.$19,250

I actually chose B. Reason being is I thought the built in gain was taxed after the year of conversion so year 3 they converted to a C Corp they assumed a 45k built in gain–I thought at the end of year 3 they would pay taxes on that built in gain then essentially assume a basis of 85k…then when they proceeded to sell the asset they recognized an additional 10k gain. Apparently that's wrong–so my question–the built in gain is just left on the back burner until the asset is sold and then that's when you are taxed? That's how this question reads but I want to make sure.

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

[RE2PECT]

@dtatham10- Ninja has a ton of those types of questions. Who cares about the EPA and the Clean Air Act? lol. There's always that panic that starts to sink in a few days before an exam where you feel like you can't remember anything. Sounds like you need a break for the rest of the night lol.

The Gleim mcq's are driving me crazy. I'm about 500 deep and only averaging 67. Scared to even try any sims yet.

Good luck StickyNicky! Try and get a seat next to demarcon tomorrow lol.

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[demarcon]

if you sell within 5 years they hit you with the BIG tax

[HoosierCPA]

@re2pect I am definitely in the overly panic mode right now. I'm digging into the details far more then I have on any other exam. And seeing as how I got a 74 on REG without knowing some of these things tells you that I might be nitpicking the details a bit lol. But you're right I think I”m going to call it a night.

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

[demarcon]

@re2pect the SIMS aren't crazy. I say start them and take a break from the MCQs for a while

[Namstut]

Question for those who study with Becker. Did anyone notice errors/inconsistencies on Chapter 4 SIMs, specifically SIM #2, Tabs 1 and 2?

Tab #1 Ordinary Business Income is $158,000. Tab #2 Ordinary Income line is supposedly based on the answer from Tab #1. You are required to take 50% to determine amounts for Schedule K-1 for one of the partners and the instructions indicate that the ordinary income should be derived from Tab #1, however, the number in the solution is incorrect, it shows $84 as partner's ordinary income.

Another issue, Insurance payments are combined with guaranteed payments for partner's K-1 and then also listed in a separate line. I don't know I might be going crazy but it looks like $10K is missing in the information and maybe Tab #1 got updated but Tab #2 didn't.

It's frustrating! Reconciling Becker SIMs is the last thing I want to do after 1 AM with one day left before my exam. 🙁

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

[Bill Knight]

Question regarding AMT add-backs for itemized deductions:

In my review material I have come to understand that medical expenses exceeding the 10% AGI threshold are to be added back to compute AMTI. However in one of the explanations for a question regarding taxpayers over age 65, the solution stated that only medical expenses exceeding 7.5& of the AGI threshold (but not exceeding 10% of the AGI threshold) are to be added back.

My confusion stems from a case where the 65 and older taxpayer has medical expenses over both the lower 7.5% threshold and the 10% regular threshold. Would we not add back an additional amount over both the 7.5% and 10% threshold in this case? It just seems odd that only an amount between 7.5% and 10% would be added back because that is contrary to the purpose of AMT.

If anyone has any insight on this question I would greatly appreciate an explanation. Thank you for your time.

Bill

FAR 81
BEC 88
AUD 91
REG tomorrow

[jeff]

Test Your Might

4 MCQ sections will be given away …

2 on Facebook and 2 in this forum post (https://www.another71.com/cpa-exam-forum/topic/test-your-might-far-mcq-ninja-mcq-giveaway-x-4/)
Feel free to post in both places for max chances to win.

[Sticky Nicky]

dont get caught up in the little details guys,,,wasted my time with alot of material

[hasy]

I hate Business Law so much. If I am fail this section bc of that, that would be so annoying.

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

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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

[hasy]

@demarcon

You might not see this but how did you study for BLaw? Dying…

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]

@Bill Knight

For AMT, it's the difference of the expenses in excess of 7.5% and 10% AGI that is added back. Taxpayers 65+ still get to deduct anything over 10% AGI. So if their AGI was 100k and they had medical expenses of 20k on the regular return, they would have deducted $12,500. To compute AMTI, you would take the difference between the excess over 7.5% (12,500) and the excess over 10% (10,000) and add that (2,500) back.

[Sticky Nicky]

hasy…dont worry about blaw

[Bill Knight]

@emsmith06 not sure how to link you into this reply but thanks for the help.

Can you explain why it is only the 2500 that would get added back to AMTI though and not the full 12500? If it were a regular taxpayer under 65 they would have to add back anything they were able to itemize in excess of 10% AGI (to my knowledge) so why would the elderly get a break capped at only the excess difference between 7.5-10%?

Seems like they are getting a benefit for being old if that is the case. Maybe that is the point I'm missing but not sure.

Bill

[Author]

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