[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).

[jpowell31]

i have a question on section 179… is it an annual deduction? I know it carries forward but I haven't seen (or remember maybe – just had a thought driving to work) where a new deduction kicks in. so, for example, year 1 we put into service $100k of equipment that applies for the deduction. year 2 we put into service $700k of equipment. do we only get the $400k carry forward? both expenses are under the $2.1M threshold… i'll look this up later but through I'd throw it out there while it was on my brain.

[jpowell31]

@jon. that's the assumption i would make…”may” being the operative term there as long as they're advertising to knowledgeable investors.

[jonm857]

@jpowell

Good thought about 179… looks it is an annual limit of $500,000. Each year, the maximum amount resets to $500,000.

“Annual Deduction Limit
There is a $500,000 limit on the total amount of business property expenses you can deduct each year under Section 179. When first enacted, the Section 179 annual limit was set at a relatively modest $10,000. Over the years, Congress kept raising the limit in an effort to help small businesses during tough economic times. In 2015, the annual limit was made permanent at $500,000.

Because Section 179 is intended to help small businesses, there is also a limit on the total amount of Section 179 property a business can purchase each year before a phase-out in the deduction begins. Under these rules, the amount you can deduct each year under Section 179 is reduced dollar for dollar by the amount your business investment purchases exceed the annual investment limit. The annual business investment limit is $2 million (also made permanent by Congress in 2015).

The $500,000 annual limit and $2 million maximum business investment limit are indexed for inflation each year starting in 2016. See Section 179 Tax Deduction Limits for more on Section 179 annual limits.

https://www.nolo.com/legal-encyclopedia/section-179-what-every-business-owner-needs-know.html

B - 81
A - 87
R - 73
F - July 5th

[ChristieF]

I agree with jon, everything I've studied over the past week makes it seem that this is an annual deduction and it resets each year.

[jpowell31]

Thanks. i just feel like there was one MCQ where it referenced year 2 and we could use the carryforward but didn't mention a new deduction. it was probably worded to ask how much of the first deduction could be used in year two or something though. it'd make for a good depreciation SIM. Still trying to find answers on that one depreciation SIM for Ninja. i think i'll email jeff today lol.

[jonm857]

Commercial paper is just awful. The way Becker explains it in the text is way too confusing. There are too many rules regarding endorsements, HDC status, and negotiability. Understanding what all of those mean individually is really easy, but when you combine those concepts into one big problem where an instrument keeps passing from person to person, it becomes a mess.

An all-inclusive flowchart for this topic would be helpful in mastering this. If anybody has seen anything along those lines, please feel free to share.

B - 81
A - 87
R - 73
F - July 5th

[jpowell31]

not really. ninja is more succinct so easier to manage i find in general. It has a very simple summary flow chart of Draft, Check, Note and CD (example: draft: drawer–> order–> drawee–> pay–> payee), along with a summary table of types of commercial paper with the number of parties, person who orders, drafts and who's primarily and secondarily liable (a bit more helpful) but not one that includes endorsements, HDC status or negotiability.

I'm much more comfortable with these now i think. i hate the tricks that come up in this one though…sometimes two answers can be right, which i can navigate in study materials but on exam day i second guess myself. am i overthinking or oversimplifying…the REAL question each time i see a new question.

[jpowell31]

questions like this bother me:

Acorn Corp. wants to acquire the entire business of Trend Corp. Which of the following methods of business combination will best satisfy Acorn's objectives without requiring the approval of the shareholders of either corporation?

A. A merger of Trend into Acorn, whereby Trend shareholders receive cash or Acorn shares
B. A sale of all the assets of Trend, (outside the regular course of business) to Acorn for cash
C. An acquisition of all the shares of Trend through a compulsory share exchange for Acorn shares
D. A cash tender offer, whereby Acorn acquires at least 90% of Trend's shares, followed by a short-form merger of Trend into Acorn (correct)

now i know a short form merger doesn't require the approval of both shareholder groups but surely a cash tender offer does? i've kind of memorized this question by now but it still annoys me

[Reg_Slayer]

@jpowell:

I think 90% is enough for control, so the fact that we used cash does not matter?

[jpowell31]

well i mean, wouldn't you need to approve acquiring “at least 90%” of another firm? 80% should be enough for control as well, right?

[jonm857]

I remember that question but do not remember the theory behind it. Im hitting it HARD tonight. Might push it to 2 a.m.

PANIC TIMME

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

wait are you saying that question has something to do with AMT ?

Business Gifts, Schedule C = $25 dollars per person
TEMP LIVING EXPENSES ARE NOT A DEDUCTIBLE MOVING EXPENSE!

[jonm857]

It has nothing to do with amt

B - 81
A - 87
R - 73
F - July 5th

[Reg_Slayer]

k good. You can google “SIMPLE PIE”, if PANICC TIMME is gettin ya down.

If employer is paying medical premiums, we can adjust ABOVE the line, but if we pay them, we can itemize below the line!!????

and why are chiropractors deductible medical, i thought they were all quacks?

[jpowell31]

my internet was still down. so even when i headed home for them to deal with it they didn't fix it. i read through all the questions in the becker book (i only have the ninja MCQ) and did really well, and felt *DOH* on the ones i did miss. if my internet isn't fixed today i'm going to MAD.

Are you both working while you study?

[Author]

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