[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

[jpowell31]

i just got a silly question wrong for mistaking treasury for municipal bond interest. DOH. i;d like to think i concentrate better in the exam but i'm scared half my points gone wrong are for STUPID mistakes. must remember to RTFQ!! (haven't seen that in a while on here so thurrrr you go).

[jpowell31]

so this stupid hurricane..narrowly missing me but if it turns left it may threaten to close my testing center the exact day i take my exam. NO. NO. NO. or, let me reschedule for free and maybe my hotel and airline will let me do the same and thereby giving me some leverage at work even though my quarter-end deadlines are majorly NEXT WEEK.

[sonja90]

Category 1 deductions are those that a taxpayer can take for personal as well as business activities, such as mortgage interest and property taxes, and are allowed in full.
Category 2 deductions are those that do not result in a basis adjustment such as advertising, insurance premiums, interest, utilities, and wages. Again, these expenses are limited to the amount of income in excess of category 1 deductions.
Category 3 deductions are those that are basis adjustments such as depreciation. More importantly, these expenses are limited to the amount of income in excess of categories 1 and 2 deductions.

Did anyone study this?

[Reg_Slayer]

is that the ninja sim on hobby deductions? i looked thru it…

[jonm857]

@JP

Worst case, you'll get a couple extra days to cram.

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

[sonja90]

yes it is. i just read through but don't see why they would ask such a stupid question? 🙂 LOL

[Reg_Slayer]

medical premiums paid for ourselves are itemized. [below the line] , got it.

medical premiums paid on “Self-Employed Health Insurance” are adjusted above the line, but not deducted on sch c.

this still confuses me. So if i am self-employed i can deduct my med prems above the line instead of below, but this would not considered a deductible business expense?

[jonm857]

alright, if you guys want my outline for gross income, let me know. sonya and other guy, I will be sending to you shortly.

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

[jpowell31]

yeah 100% above the line for self-employed…just think of it as regular income as if the taxpayer is the person paying (not their business because they are their business technically). paid for ourselves is included in medical expenses.
ok out for dinner, hopefully this won't take too long :S

[sonja90]

@reg yes that's correct it's one of the benefits sole proprietors have. It is not deducted as business expense only above the line.
and yes personal med. is schedule A item if you are not sole prop.

@john thank you got it 🙂

[jonm857]

@reg_slayer

Where do you see that? I'm not seeing where health insurance is deductible on Schedule C or Schedule SE???

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

[Reg_Slayer]

@jonm857

not on sch c ever.
On sch SE, i guess i was wrong. I am confused on where we actually make the adjustment. It is above the line on my individual 1040?

on a side note:
itemized Home equity debt is limited to lesser of:
1) $100,000
2) [FMV of Home – acquisition debt on home]

[jonm857]

Yeah its a deduction to arrive at AGI. It is separate from the schedule C. If you paid it for your employees then you could deduct it on schedule C, just as long as it isnt for you or your family

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

[sonja90]

https://www.irs.gov/pub/irs-pdf/f1040.pdf

@reg check the line 29 of 1040 maybe that clears it up. That's the only place it gets reported

[jonm857]

God this is so much information. This a nightmare!!

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

[Author]

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