[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]

m-1 recon cheat:

book income

1) subtract: revenue that is not taxable and is already included in book income

2) add: revenue that is taxable, but is not included in book income

3) add: expenses that are not allowable and are already included in book income

4) subtract: expenses that are allowable, but are not included in book income

= taxable income

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

[aatoural]

SIM 1 Question 5 in Chapter 4 Becker – MACRS

They tell you the bout a computer for $100K in March 30 and a building for $500K in November. They in the explanation say the purchase of the building is not relevant. Can somebody explain why not?

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

[Reg_Slayer]

@aatoural

not there yet, but is the computer for personal use [capital asset] and building is for business use [not a capital asset]?

[jonm857]

@aatoural

I'm thinking the building is irrelevant here because it's real estate and it's not in the same class of assets as computers (property other than real-estate). So if they bought more computers (or trucks, office furniture, whatever, etc.) worth $500,000 in November, then they would use mid-quarter convention.

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

[aatoural]

So then how do we depreciate the building?

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

[jonm857]

Youd do it based on whether it is residential or nonresidential. Theyre asking just for the depreciation of the computers.

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

[sonja90]

@reg that is for 351 not-taxable contribution?

[Reg_Slayer]

@aatoural

idk i am not there yet, so was just giving my best guess.

i think capital/noncapital assets is a dif concept than “351 not-taxable contribution”

[jonm857]

You can't use a NOL to offset income in the year the NOL was created, right?

You can either: 1) carry it back 2 years, or 2) carry it forward 20 years.

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

[sonja90]

@ reg
i'm making cheat sheet for basis – contribution and distribution for different entities.i'll share when i'm done
as far as i know 351 is for when you contribute to corporations property must be more than 80% to qualify tho and it looks just like that.

@jon that's right because there is nothing to offset it with since you have NOL 🙂 unless you have some other income from another source then you can. also you can elect to not carry back

[Reg_Slayer]

@jon @ sonja

ALSO:
If NOL results from casualty and theft losses, can carry back three years instead of normal two years.

[jonm857]

Sonja you nailed it. I feel like a dum-dum :/

This is why we ask questions.

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

[jonm857]

And $3,000 is the maximum net capital loss deduction per year, even if you are MFJ, right?

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

[sonja90]

@jon someone said there are no dum-dum questions 🙂 especially no in high stress situations such as REG exam is in 3 freaking days!!!!!!!
today is my bad day lol i got cocky like yeah i know that and then i miss because i didn;t read the question!!!
just remeber READ EVERY QUESTION like my life depends on it 😀 lol

[sonja90]

that is right capital losses limited to 3000 for everyone 🙂
except when you had capital gains than you can offset more

[Author]

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