[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]

Thats what they have written under nonliquidating distributions. I dont understand it. Im going to work some sims hard tomorrow so I can really drill this down

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

[jpowell31]

i am not retaining anything else i don't think ugh. still have about 10 SIMS left but they'll have to wait until the morning before my flight. it took me a half hour to get through 20 MCQ. just so drained.

i'll probably be pretty quiet on here so i don't freak myself out more with different information or waste time when i could be reading or trying to CHILL OUT.. with the exam on friday i'll probably log in later in the day if the weather's bad or saturday if i can actually get out and enjoy myself…. HA WHAT'S THAT LIKE? I FORGET

[Anonymous]

@jp Thanks for the welcome, and break a leg on Friday!

[jpowell31]

ok i ended up doing those SIMS and WTF is this? the only one i got wrong on this particular SIM…but i'm more confused than ever…first of all the answer is wrong altogether
1. What is the due date for filing of a federal income tax return for a C corporation with a fiscal year of 6/30/year 2 that has not filed a request for extension? 7/31/year 2

Generally, a corporation must file its income tax return by the 15th day of the 4th month after the end of its tax year. However, there is a special rule for C corporations with fiscal years ending on June 30: the new due date rules do not go into effect until taxable years beginning after December 31, 2025. Therefore, the due date for C corporation with a fiscal year-end of 6/30/year 2 is the 15th day of the 3rd month after the end of its tax year, or 9/15/year 2.

like how would the filing date be July 31 in the first place? and that explanation makes it seem ike even though we're meant to know the knew filing dates for c-corps and partnerships, the rule doesn't take effect until the next flipping decade and it's useless on this exam? anyone run into this sim wondering WTF or do i need sleep?

on that note i AM going to sleep lol

[sonja90]

@jp we have discussed this problem. that sim is off. i email Jeff to fix it.

[jonm857]

Why do you add back the interest? The loan proceeds were used to buy a motor home, so to me that shouldn't qualify as an add-back….

This is what becker has in the book. “Add back: Home mortgage interest when the mortgage loan proceeds were not used to buy, build, or improve the taxpayer's qualified dwelling (house, condominium, apartment, or mobile home not used on a transient basis)”

– – – – – – – – –

On their joint tax return, Sam and Joann, who are both over age 65, had adjusted gross income (AGI) of $150,000 and claimed the following itemized deductions:

Interest of $15,000 on a $100,000 home equity loan to purchase a motor home
Real estate tax and state income taxes of $18,000
Unreimbursed medical expenses of $15,000 (prior to AGI limitation)
Miscellaneous itemized deductions of $5,000 (prior to AGI limitation)

Based on these deductions, what would be the amount of AMT add-back adjustment in computing alternative minimum taxable income?

a. $35,000

b. $21,750

c. $38,750

d. $23,750

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

[jonm857]

Okay I have figured it out. It's as simple as this: a motor home is not the same as a mobile home. Two entirely different things. So that is why you have to add it back.

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

[Reg_Slayer]

@jon
i remember that.
motor home = used for transit. = AMT ADJUSTMENT
vs mobile home is a primary residence = not AMT ADJUSTMENT

@jpowell31
thanks for the heads up. i have only done the individual ninja sims thus far.

[Anonymous]

Hey guys. What does “control” mean in the context of rules of construction for commercial paper? i.e. “Typewritten terms control over printed terms. Handwritten terms control both” (this is on page R7-11 of Becker).

[jonm857]

@allison213

It means the handwritten terms dictate how to proceed. If you have a check and the typewritten terms say “pay $40.00”, but underneath there are handwritten terms that say “four-thousand dollars”, then whoever wrote the check will probably be liable for the $4,000.

In any case, I don't think a bank teller would cash a check with differing terms like that without clarifying first.

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

[Anonymous]

Thanks @jonm857!

[jonm857]

A claim for refund of erroneously paid income taxes, filed by an individual before the statute of limitations expires, must be submitted on Form:

a. 843

b. 1040X

c. 1139

d. 1045

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

[jonm857]

Do people actually take this deduction? Because it seems like a red-flag for… you know… being arrested.

– – – – – – – –

Mock operates a retail business selling illegal narcotic substances. Which of the following item(s) may Mock deduct in calculating business income?

I. Cost of merchandise.
II. Business expenses other than the cost of merchandise.

a. Neither I nor II.
b. Both I and II.
c. II only.
d. I only.

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

[Reg_Slayer]

@jon

1040x

@jon

yes, being a tax cheat is much worse than a drug dealer. There is even a scene in breaking bad about this!

[Reg_Slayer]

gain realized:
fmv – basis

gain recognized(reported):
only to extent of boot recieved

Basis:
book value of property before the contribution plus any cash contributed.

[Author]

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