[32CPA]

Yankeeaccountant… thanks for what you said in the scores thread. It won’t let me post anymore in that, I think it’s closed.

Anyways… as I’ve taken REG twice and am a tax accountant… do not hesitate to look for help from me on this. REG is a beast and if you don’t treat it like you did FAR, it will beat you. I consider it as hard or harder than FAR now.

Know BASIS! If you can calculate basis, you will succeed in this exam.

Good luck!

BEC - Pass 10/2010
FAR - Pass 10/2010
AUD - Pass 11/2010
REG - Pass 05/2011

[Anonymous]

Any tips on how to remember when basis is altered by boot you pay vs being paid boot? It is still a troublesome area for me.

[Anonymous]

Any tips on how to remember when basis is altered by boot you pay vs being paid boot? It is still a troublesome area for me.

[yankeeaccountant]

32CPA,

Thanks for the post and for your help. I am struggling a bit with corporate taxation…..I can see where this exam will be tough. I have ordered the cram and will apply myself!

Congrats on being finished!!! Now you can enjoy the remainder of the summer.

nadia

[laCPA2b]

I took REG yesterday & it was my first time taking a section. Becker prepared my well for the MC–including basis. The ones i got were similar to the questions in the wiley test bank. But those sims were impossible. Those topics were so random! Can you get partial credit on them?

[32CPA]

cvmb… I actually do have a little advice on boot… remember that u do not net mortgages with cash. they are separate. net your mortgages then net cash and other then see if u have boot paid or received.

please excuse typos… I'm on phone. ill come back and elaborate

BEC - Pass 10/2010
FAR - Pass 10/2010
AUD - Pass 11/2010
REG - Pass 05/2011

[32CPA]

Ok… that was a nice break from this site. I needed to take a few days away from exam talk to realize I was done.

Back to the boot question… I believe you asked about how your basis is adjusted for boot paid or boot received.

If you think about this like a partnership… when a p'ship increases their liabilities, your basis increases because you now have more risk in the p'ship… those liabilities are now partially your liabilities.

Same goes for property transactions. If you inherit a mortgage to go with the property you just exchanged, then you should have an increase in basis for the increased liability.

For boot received that's not a mortgage, as you recall, when calculating your recognized gain (what you will pay tax on) you take the lesser of boot received or realized gain. So if you have a recognized gain of cash received… then shouldn't you have a change in basis? That means that if you sell your property for a gain at a later date, you've ALREADY paid tax on a portion of the property.

So I would suggest when calculating your basis… think about if YOU (not the person in the question, you own this property) just exchanged for new property and YOU are going to sell it for a gain. How would that mortgage you inherited and the amount you already paid tax on when you exchanged the first time… how would those effect what you pay tax on the gain in your next return?

It all seems confusing but I found myself when thinking of property exchanges (my strength in the exam) is putting myself in the question and how much I want to pay taxes on. How am I going to explain to my wife, yeah, it was a like-kind exchange, but I have to pay tax on some of it this year… how am I going to explain to her? Or explain to her “yeah, I exchanged our debt-free property for another property that has a mortgage.” Now I increased my family's liabilities, how can I justify that with her?

Not married? How are you going to explain this to your parents when you tell them about it? Someone else that you have to justify your purchases.

BEC - Pass 10/2010
FAR - Pass 10/2010
AUD - Pass 11/2010
REG - Pass 05/2011

[Anonymous]

Excellent response, appreciate it!

[Author]

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