[rosecpa]

I’m just getting a bit nervous…

[Martin]

ohiostategirlcpa, it worked for you on Regulation, and I guess on FAR too. What were you averaging on Gleim BEC before you took the test?

Through God all things can happen!

“You never fail until you stop trying.”
― Albert Einstein
When I was young, I used to admire intelligent people;as I grow older, I admire kind people.
“Just keep swimming, just keep swimming.”

FAR= 72-84
Audit= 73-82
BEC= 74-75
Reg=77

[Claudia408]

@ohiostategirlcpa – would you mind sharing an example of your T-accounts to calculate basis for C corp? That sounds like a great idea and I want to try making a list for myself.

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[Last Chance CPA]

@lswang – I wish 🙂 I went to the brink of expiry…

FAR - 76
AUD - 75
BEC - 75
REG - 76

Now I need some experience!!! And some networking...

[Jackobe24]

do you guys have tips on using the Authoritative literature for the simulations??

I don't ever know what to freaking search and feel like I'm just wasting time to search for one small answer…..

FAR - 9/8/16 (Hopefully it's my last CPA exam, God bless me!)
REG - 80
BEC - 81
AUD - 69, 81

[ohiostategirlcpa]

Re T-accounts,

I have a set of accounts for the owner/individual/partner, then a second set of accounts for the partnership/corporation.
These include: asset accounts, equity accounts, income accounts, expense accounts, etc.

The debits and credits have to add up for both entities, when paying dividends, property distributions, investments, etc.

Different rules apply for partnerships and corporations, etc, so it requires knowing a lot of scenarios. However, generally, the taxes are only paid once, not both entity and owner, nor neither. The logic is that the govt always wants a cut of the gain and income.

So it is a matter of keeping multiple T-accounts for multiple entities, and trying to see the logic.

They helped me on all tests.

I was averaging 90s on all my Gleim MCQs, right before the test.

F91 A95 R90 B94
CMA since 2015
(Gleim books/PDFs, MCQs, SIMS)

[Last Chance CPA]

@Jackobe24 – I ONLY passed because I finally used the IRC AL for REG properly on attempt #5. And take a look at my scores. I used the AL perfectly for AUD and found word-for-word answers, but I had trouble with using the IRC AL for REG until my 5th da*n attempt. You won't find word-for-word answers, but rather guidance on how to approach a problem. Trust me on this. I got help with 2 SIMs using the IRC AL. You have to add in time to just browse the IRC AL.

Use Gleim's 35/35/35/75 method and maybe leave some room for review. I would buy Gleim SIMs and practice searching through the IRC, as their SIMs (and IRC) are closest to the actual exam…good luck.

FAR - 76
AUD - 75
BEC - 75
REG - 76

Now I need some experience!!! And some networking...

[Anonymous]

@Ohio, re: T-accounts, when to properly use FMV or NBV (again* by Tim Gearty) when creating T-accounts for asset sections? For the love of CPA, I could not get this valuation/basis straight for different entities.

[ohiostategirlcpa]

@ Amor D

T-accounts don't tell you that, only how much to transfer.

You have to make a separate set of accounts for each type of entity and/or transfer: corporation, S-corp, C-corp, partnerships, formation, property distribution, income, like exchanges, etc.

I diagrammed some 15 different types of categories with T-accounts, and practiced them repeatedly until I memorized them, and could recreate them, given the type of transaction. In other words, if someone asked me what are the transactions for partnership formation, I could diagram the T-accounts for both the partners and the partnership, for most types of transactions.

Then I knew when to recognize income, what the basis was, etc.

F91 A95 R90 B94
CMA since 2015
(Gleim books/PDFs, MCQs, SIMS)

[nib]

@ ohiostategirlcpa

please let us have one sample of T entries you do .so that we can also practice.Can you copy paste and send .

i read and study a lot , but correlating and retrieving becomes difficult .

[Anonymous]

@Ohio, thanks.
Can we try to lay out the T-accounts for the sample question below?
Quigley, Roberk, and Storm form a corporation. Quigley exchanges $25,000 of legal fees for 30 shares of stock. Roberk exchanges land with a basis of $10,000 and a fair market value of $100,000 for 60 shares of stock. Storm exchanges $10,000 cash for 10 shares of stock. What amount of income should each shareholder recognize?
Quigley
Roberk
Storm
a.
$0
$90,000
$0
b.
$25,000
$90,000
$10,000
c.
$0
$0
$0
d.
$25,000
$90,000
$0

[tuanxn]

Amor D,

What answer does the question give? (and the explanation if you don't mind)

In a valid §351 transaction (formation of a corporation with 80% control), only the services contributed would be taxable to the shareholder, but none of the answers listed have that conclusion.

[Anonymous]

@Tuanxn, here you go.
Explanation
Rule: IRC Section 351 controls the taxation of transfers to controlled corporations. No gain or loss is recognized to the transferors/shareholders on the property transferred if certain conditions are satisfied.
Choice “d” is correct. The transaction in this question does not satisfy the conditions of Section 351, and gain or loss can be recognized for each of the shareholders. For Section 351 to apply, the shareholders contributing property, including cash, must own, immediately after the transaction, at least 80% of the voting stock and at least 80% of the nonvoting stock of the corporation. A shareholder who contributes only services (Quigley in this question) is not counted as part of the control group. Thus, only Roberk and Storm are counted, and they together own only 70 shares out of the 100 shares (70%). The $25,000 of legal fees to Quigley is compensation for services rendered and is recognized as income by Quigley. A gain of $90,000 (the fair market value of the land of $100,000 – its adjusted basis of $10,000) is recognized to Roberk. Storm bought shares for cash and has no gain.
Choice “c” is incorrect. This is what would happen if Section 351 applies to all of the transferors/shareholders.
Choice “b” is incorrect. Storm recognizes no gain of any kind since he/she merely bought shares for cash.
Choice “a” is incorrect. Quigley recognizes gain since transferors who contribute only services are not counted as part of the control group for Section 351 purposes. Gain is recognized by transferors who are not part of the control group.

[tuanxn]

ah yes, totally forgot about the services exclusion. Thanks!

[ohiostategirlcpa]

This is how I would diagram this transaction:

Q
Stock basis
Debit 25

Income (legal fees)
Credit 25

R
Basis of land (existing debit balance of 10)
credit 10

stock basis
debit 10
Debit 90

Gain on land
credit 90

S
Cash
Credit 10

Stock basis
Debit 10

Corporation

Cash
Debit 10

Land
Debit 100

Legal expense
debit 25

Equity
Credit 25
Credit 100
Credit 10

F91 A95 R90 B94
CMA since 2015
(Gleim books/PDFs, MCQs, SIMS)

[Anonymous]

@Ohio, thanks again. I am still lost with corporate taxation. I am still mixing up SH Tax Basis with Corp Tax Basis. I am just not good in juggling tax bases for various entities.
So frustrating.
Can anyone suggest a textbook that I can borrow from a public library?

[Author]

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