[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

[jonm857]

there's no deduction for it. it's just a gift that doesn't count.

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

[jonm857]

but… that's not to say her basis in the car when she sells it later on down the road will be the same as yours when you gave it to her… i.e. (related party transactions).

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

[Reg_Slayer]

CHANGE OF TOPIC:

if filing HOH, contributions to IRA/retirement are deductible contingent on MAGI phaseouts.

MAGI < $61,000 = FULLY DEDUCTIBLE
MAGI AGI between $61,000-$71,000.

is this just for HOH or is it all status besides MFJ??

[jonm857]

Looks like it applies to Single & HoH filing status. I don't know if it applies to MFS and SS though.

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

[Reg_Slayer]

Interest on student loans [deductible above the line] is limited to $2,500.
>>>But agi Limits apply (and vary depending on filing status?)!
>>> High income taxpayers [65 single 130 MFJ, cannot deduct any interest on student loans!!!

[jonm857]

@reg_slayer

yuppppp

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

[Reg_Slayer]

@jonm857

also i am seeing that MFJ gets adjustments/deductions that MFS does not. So not only do you get rewarded with a lower rate for filing jointly, you may qualify for additional adjustments/deductions as well.

[jonm857]

Like kind exchanges…

step 1) calculate realized gain/loss

Realized gain = FMV property received – adjusted basis of property given up

step 2) calculate recognized gain (you cannot recognize a realized loss on like kind exchanges)

Recognized gain is the lesser of: 1) boot received or 2) realized gain

step 3) calculate deferred gain/loss

Deferred gain/loss = realized gain/loss – recognized gain

step 4) determine basis of new property received

New basis = FMV property received – deferred gain + deferred loss

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

[jpowell31]

@regslayer – yep there are loads of references in movies etc that infer how much more beneficial it is to be married for tax purposes. legal counsel on one of my clients actually told me that when i told him there as no rush for me and my LT bf to get married. SHEESH.

[Reg_Slayer]

wow some of these sims can get very specific on rules/details. Brain is fried, on to non-math related MCQs for me!

[jpowell31]

tell me about it. my first test was BRUTAL. i know i know more than i did the last time around but i really hope i get a more fair test this time around….. i'm doing ethics questions because i don't want to forget something simple and it's really difficult to do math lol…i'm just making stupid mistakes and saying yea yeah ok i KNOW that i just don't CARE right now. not exactly the most productive. got about 1/3 of my notes together though so it'll be eaier to review…hitting them SIMs in the AM when my brains back in the GAME. ok 30 more questions, 20 more pages and it's bed time. TOMORROW FOLKS

[jonm857]

Honestly, I think REG is the hardest of the 4 sections. It's by far the one I've struggled with the most. When I took FAR, I felt like the information was easier to understand, even though there was a lot more.

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

[Reg_Slayer]

When/under what circumstances would a CPA be allowed to show workpaper's without clients permission?

[jpowell31]

subpoenaaaaaaaaaaaaaaaaaaa. ok i'm gonna have a glass of wine with this last set. my heart and brain are racing and my eyes and body are closing/hunched. i need to CALM down.

[suzieemac]

Hey all,

Quick question on the marital deduction.

I understand the concept of “terminable interest” and how it could disallow the marital deduction. However, for the question in the MCQ:

“Joseph and Jill have been married for 20 years. Joseph inherited a house worth $2,500,000 from his father. Assume that the annual gift tax exclusion is $20,000. Joseph is gifting the house to Jill as long as she puts an apple orchard on the land. Jill decided in the end to put a swimming pool in place of the apple orchard. What amount of the $2,500,000 can Joseph give to Jill without incurring a gift tax liability?”

The answer is “$0” and the explanation states:

“The gift tax provision for gifts from one spouse to another allows for a marital deduction; an unlimited deduction is available for all property given to a spouse.

A gift tax marital deduction does not apply to a transfer of a terminable interest in property. A terminable interest is one that will terminate on a lapse of time or on the occurrence, or failure to occur, of a contingency.

Therefore, Joseph will not be able to claim the gift tax exclusion. The gift was contingent on Jill planting an apple orchard, and she decided on a swimming pool instead.”

So, is it $0 for the mere fact that there IS a terminable interest attached to the gift, or is it because Jill failed to comply? Would he be able to exclude the gift if she complied and planted the apple orchard? I want to go with the fact that she failed to comply, but I just wanted to be 100% positive. I also think my brain is fried for the evening.

Thanks in advance.

AUD - 8/12/16
REG - 10/7/16
BEC - 11/18/16
FAR - TBD

#300before30 - Pass the CPA exam before my 30th Birthday.

[Author]

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