[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]

d

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

[jpowell31]

you always consider hot assets first.

[jonm857]

The Browns borrowed $20,000, secured by their home, to pay their son's college tuition. At the time of the loan, the fair market value of their home was $400,000, and it was unencumbered by other debt. The interest on the loan qualifies as:

a. Nondeductible interest.

b. Deductible personal interest.

c. Investment interest expense.

d. Deductible qualified residence interest.

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

[jpowell31]

for scorps remember interest expense is deductible by the corp, but interest income is not (flows through to the shareholder)

D)

[jonm857]

d is correct

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

[jonm857]

Bob and Nancy Goldberg are both age 67 and file a joint return. For the current year, the regular standard deduction for a couple married filing jointly is $12,600. What is the maximum standard deduction available to Bob and Nancy?

a. $13,850

b. $12,600

c. $13,800

d. $15,100

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

[jpowell31]

A) need to double check for MFJ. it could be C but my gut says A.

[jonm857]

It's D

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

[sonja90]

During 2015, Sadie made the following transfers:
She deeded her personal residence to her daughter and herself to be held in joint tenancy. The fair market value of the residence at the time of transfer was $150,000.
She placed a $30,000 bank account in joint tenancy with her daughter. Neither she nor her daughter made any withdrawals in 2015.
She placed a $20,000 bank account in joint tenancy with her daughter. During 2015, Sadie withdrew $2,000, and her daughter withdrew $5,000 from the account.
She bought $10,000 in U.S. savings bonds registered as payable to herself or her daughter. Neither she nor her daughter cashed any of the bonds during 2015.
What is the gross amount of gifts given by Sadie in 2015?
a $105,000
b $90,000
c $80,000
d $5,000

[jpowell31]

oh wow…i only put one additional deduction in there. DOH. that was good because it's something i thought i had down pat so will make me remember…RTFQ and answer accordingly lol. this is why i need to know everything 100%. i need to give myself a large margin of careless errors. Le sigh.

[sonja90]

Oliver, a widower who does not live in a community property state, sold 50 acres of land he and his wife had paid $10,000 for in 1997. She died in 2007. As of the date of her death, the land was valued at $50,000 for estate tax purposes. Oliver sold the land for $100,000 on an installment basis. What is his gross profit percentage?
90%
70%
50%
60%

[Reg_Slayer]

@sonja90

50 / 100 = 50%?

[sonja90]

Oliver’s adjusted basis at the time of sale is $30,000 [$5,000 + .50 ($50,000)]. His gross profit percentage, then, is 70% [($100,000 – $30,000) ÷ $100,000].
Publisher’s comment: If Oliver lived in a community property state, his basis would be $50,000 and 50% would be the correct answer.

Gleim random question

[jpowell31]

can you share the solution to your previous question – that's a good one!

[Reg_Slayer]

@sonja90

edit: I quickly read the end of your post, and thought i had answered correctly.

NOT a community property state, so his basis is [$5,000 + .50 ($50,000)] = 30 ?

Add half of what they initially paid, to half of FMV @ day of death? Why Both?

[Author]

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