[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).

[jonm857]

I got fired recently because I did not pass quickly enough. They said I was too far behind at this stage in my career. They left out the part where the hours were so demanding that it impacted my study time. So no, Im unemployed and practically live at a library now.

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

[jpowell31]

Oh, i'm so sorry to hear. well auditing sucks if that helps…do something different :). you're definitely putting in some hours before your exam then, i'm jealous! i'm off all next week with my exam on friday. getting nervous now. yesterday i did 75 Ninja MCQ and a bunch of Becker, reading the book but i feel like i wasted time damn it. the next week and a half is going to be brutal.

reg slayer can you talk more about the premiums thing? above the line especially? i didn't follow. i know you can't deduct premiums paid for disability…premiums paid to life insurance in excess of $50k by your employer are considered income.

[Reg_Slayer]

I think i was confusing:

Self-Employment medical insurance premiums [ABOVE THE LINE]

with

itemized Medical expenses subject to the 10%/7.5% threshold [BELOW THE LINE]

[Reg_Slayer]

Ordinary income from an S corporation is NOT subject to SE tax. [is TI to the individual on their own individual tax return]

Ordinary income from a partnership is subject to SE tax. [if to a general partner]

[aatoural]

I understand AMT but I still do not have clear when is it that we decide. Oh, we need to check if you have to pay an AMT on your return (either individual or corp.).

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[Reg_Slayer]

@aatoural

The alternative minimum tax is only mandatory if it exceeds the regular tax.

[aatoural]

But does that mean that we need to do the calculation for it always and then it is only applied if it exceeds regular tax liability?

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[Reg_Slayer]

Yes, that is my Understanding of it. Also note that high-income taxpayers, or taxpayers taking advantage of lots of itemized deductions are more likely to be subject to AMT. I am talking about Individuals. I have not yet studied CORPORATE AMT in detail.

[aatoural]

Thanks Reg_Slayer

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[Reg_Slayer]

wait a minute…are business gifts itemized 2% MISC on sch A? or are they deductible on SCH C?

[aatoural]

Becker has it as a 2% of AGI limiation on itemzied deduction

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[jpowell31]

that's so funny Reg_slayer…i was looking up on the forum for good detailed summaries of the 1040 just to make sure my notes were comprehensive and found one that has both – i think it's included in business income on schedule C and deductible on schedule A as an itemized deduction subject to 2%.

[jpowell31]

that's not how it was worded on the summary i was reviewing but makes more sense that way…but i'd love some confirmation on that. that'd be a good SIM component

[jpowell31]

Random MCQ of the day (i may or may not be getting much work done today)

@jon this is for you with your recent review haha

On May 2, Mason orally contracted with Acme Appliances to buy a washer and dryer for household use for $480. Mason and the Acme salesperson agreed that delivery would be made on July 2. On May 5, Mason telephoned Acme and requested that the delivery date be moved to June 2. The Acme salesperson agreed with this request. On June 2, Acme failed to deliver the washer and dryer to Mason because of an inventory shortage. Acme advised Mason that it would deliver the appliances on July 2 as originally agreed. Mason believes that Acme has breached its agreement with Mason. Acme contends that its agreement to deliver on June 2 was not binding. Acme's contention is:

A. correct, because Mason is not a merchant and was buying the appliances for household use.
B. correct, because the agreement to change the delivery date was not in writing.
C. incorrect, because the agreement to change the delivery date was binding.
D. incorrect, because Acme's agreement to change the delivery date is a firm offer that cannot be withdrawn by Acme.

[jonm857]

Answer is C. The delivery date is binding. But I can't remember the theory behind it right now. I'm going through business structures with a comb at the moment.

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

[Author]

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