[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]

the question your referring to is for corporations but FACCE is for individuals. in becker the adjustments are LID (long term contract – this is POC, Installment sale and depreciation adjustments) (see R3-31)

[Reg_Slayer]

@jpowell

THANK YOU! I can't believe I did not catch that.

so for corporations, there is no such thing as an AMT credit? This is for individuals only?

Did you ever get an updated list of REG sims by AICPA category? Right now i want to so all the sims for individual taxation, but the way it is set up right now makes it difficult.

[jonm857]

@Reg_Slayer

No, corporations also can use the AMT credit to reduce regular tax in future years.

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

[Reg_Slayer]

is this the “FOREIGN TAX CREDIT”?

that is the only credit i see in the CORPORATE AMT formula.

[jonm857]

@Reg_Slayer

The foreign tax credit is a different credit than what we're talking about. The reason you don't see the “AMT credit” in the AMT formula is because it does not reduce AMT… it reduces regular tax. It will never reduce AMT and therefore will never be in the AMT formula. On the other hand, the foreign tax credit can be used against AMT and that is why it is in your formula. Does that help?

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

[jonm857]

AMT is confusing but I wouldnt recommend putting much time into it. Ive taken REG more times than id like to admit, but I would focus on knowing the adjustments, the preferences and the credits and how to calculate the exemption and then move on.

Ive found the most important thing about the tax side of REG is that you must understand basis, distributions, formations and liquidations of corps and partnerships. Those 4 concepts you need to make sure you master because they will throw a ton of curveballs at you to confuse you.

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

[jpowell31]

can someone help me with this question? I know why it's right…but it would waste my time on exam day to read that the MAGI is in the question but instead you have to actually calculate MAGI separately. Why is the stated MAGI in the question different than the one we calculate? I'm sure I'm overthinking this one, but I'm in for a retake so I don't want to miss something that I thought I had down pat last time! Thanks!

Question:
Lane, a single taxpayer, received $160,000 in salary, $15,000 in income from an S corporation in which Lane does not materially participate, and a $35,000 passive loss from a real estate rental activity in which Lane materially participated. Lane's modified adjusted gross income was $165,000. What amount of the real estate rental activity loss was deductible?
Answer:
Individuals may offset up to $25,000 ($50,000 if married filing jointly) of ordinary income with rental real estate activities. This deductible loss is reduced (but not below zero) by 50% of the amount by which the modified adjusted gross income of the taxpayer for the year exceeds $100,000.
•First, the passive activities were netted $15,000 from the S corporation – $35,000 from the rental = $(20,000).
•Second, the salary of $160,000 is decreased by the net $20,000 passive activity loss for a modified AGI before limitation of $140,000.
•Third, the amount of $140,000 that exceeds $100,000 is multiplied by 50%, equaling $20,000.
•Fourth, the rental loss of $35,000 is decreased by the $20,000 limitation, leaving an allowable deduction of $15,000

[jpowell31]

sorry my threads aren't updating in real time for some reason..i'd agree with jon on what he said… pull out or scan the summary pages for corp and individual from becker and write some other important notes on them for AMT. know those “add them back” questions (preferences and adjustments and that the credit is carried forward indefinitely and only offsets income tax not future AMT and you should be good.

[Reg_Slayer]

@jpowell

That question confused me as well. But i think i have a pretty good understanding of the $25,000 max deduction, reduced by 50% of agi over 100,000.

basically just ignore the MAGI they give us, use everything else in the question to get 140,000, then use the above rule to get 15,000…

[jpowell31]

yeah that's what I thought…and the other answer wouldn't be available anyway I just hate how sometimes the question s obvious and other times it's not and you never know on exam day when you're overthinking or oversimplifying when it comes to these types of things. I'm a master at wasting time 🙂

[jonm857]

@jpowell31
Are you using becker? If so where did this question appear?

The only thing I can think of is theyre saying the MAGI of 165,000 doesnt include the passive losses, which is what you have to calculate to get the new MAGI.

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

[Reg_Slayer]

@jon

ninja mcq #1142

[aatoural]

I am getting confused in something so simple that I used to have down, but Becker confused now. Interest in state and local tax refund is it tax rexempt or taxable? Same thing for interest on treasury certificates/bonds/obligations/etc?

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

[luisitotx]

Has anyone here passed REG with Roger only. I've taken AUD and BEC using rogers but had to supplement with NINJA because Rogers questions were simple/basic.

AUD-82
BEC-Sept 4
REG-TBD
FAR-TBD

[jonm857]

@aatoural

Go to pg. 22 in ch. 1 in the book and it sums up what interest is taxable and nontaxable. Best thing to do is write down taxable interest on one notecard, and nontaxable interest on another notecard.

Interest on both federal and state tax refunds are taxable.

Interest on federal gov't bonds/obligations is taxable, BUT interest on state/local gov't bonds/obligations is NOT taxable.

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

[Author]

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