[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

[sonja90]

Dale was a 50% partner in D&P Partnership. Dale contributed $10,000 in cash upon the formation of the partnership. D&P borrowed $10,000 to purchase equipment. During the first year of operations, D&P had $15,000 net taxable income, $2,000 tax-exempt interest income, a $3,000 distribution to each partner, and a $4,000 reduction of debt. At the end of the first year of operation, what amount would be Dale's basis?

A.
$16,500

B.
$17,500

C.
$18,500

D.
$21,500

[jpowell31]

C)

[Reg_Slayer]

d?

10
+5
-3
+2
+7.5
=
21.5

[jpowell31]

Are the two items that follow used in the computation of the built-in gains tax liability for an S corporation?
A.

Flat 35% tax rate: Yes; Deduct unexpired NOLs and C corp. capital losses: Yes
B.

Flat 35% tax rate: Yes; Deduct unexpired NOLs and C corp. capital losses: No
C.

Flat 35% tax rate: No; Deduct unexpired NOLs and C corp. capital losses: Yes
D.

Flat 35% tax rate: No; Deduct unexpired NOLs and C corp. capital losses: No

[jpowell31]

@regslayer you have to subtract the reduction in debt!

[jpowell31]

i hope -_-

[sonja90]

c is correct for mine you @jpowell is correct

@jpowell A

[Reg_Slayer]

@jpowell31:

thanks!

assumption of debt will INCREASE basis.
reduction of debt will DECREASE basis.

and the distinction between “taxable income” and tax-exempt income did not matter.

[jpowell31]

YEP

[jpowell31]

ok i underestimated earlier @jon.. i'm at 1850 questions. 50 more to go for me tonight… leaving more tax questions at the end has me getting through them a bit slower today. then some reading without staring at this computer. my contacts are fusing to my eyes.

[jonm857]

@jpowell

You gotta get some glasses!

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

[jpowell31]

i have them i just prefer not to drive with them because i'm actually blind. i'm studying at home until exam day, though so won't be putting in contacts aside from when i work out which will likely be reduced to one time as i panic in these final days. lol

[jonm857]

@jpowell

Yours is Friday, right? It will be here before you know it……….

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

[Reg_Slayer]

EXCESS FRINGE BENEFITS ARE INCLUDED AS “Wages, salaries, tips, etc.” on the w-2.

[jpowell31]

yes and DON'T add to my anxiety THANKS

[Author]

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