CPA Reg 2024
3 Elements of a Legally Enforceable Contract - ✔✔Offer + Acceptance
Exchange of consideration
Lack of defense (minor, fraud etc.)
4 elements of negligence - ✔✔duty of care, breach, causation, damages/injury
5 ways to perfect secured transactions - ✔✔Filing
Taking possession (pledge) (tangibles)
Taking control (intangibles)
Automatic perfection
Temporary perfection
A PMSI creditor: - ✔✔almost always wins
whoever fronts $ for asset
doesnt have to be seller, can be bank
Accumulated Adjustments Account (AAA) - ✔✔Retained Earnings for S-Corps
Can only go negative from losses, not distributions
Actual authority terminated by law - ✔✔BID LID
Bankruptcy of principal
Incapacity of principal
Death of either party
License failure
,Illegality
Destruction of subject matter
Apportionment - ✔✔( Property and rent expense / total property + payroll paid in state / total payroll +
sales within state / total sales ) /3
Basis for Depreciation of Transferred Property - ✔✔Lesser of FMV and original Basis
Bonus Depreciation Limitation - ✔✔Assets converted from personal - business cannot use bonus
depreciation
Assets received as gift are also not eligible
Inherited Property also not eligible
Burden of proof is with taxpayer when - ✔✔Most of the time
Burden of proof is with the IRS - ✔✔Civil fraud
Criminal fraud
Willfully aiding and abetting others
C Corp Capital Losses - ✔✔- Can only deduct to the extent of capital gains
- Can carry back 3 years or forward 5 years
C Corp NOL Rule Breakdown - ✔✔Prior to 2018:
Carry back 2yrs
Carry forward 20yrs
2018, 2019, 2020
, Carry back 5yrs
Carry forward forever
2021 and future
Cannot carry back
Carry forward forever
Can offset 80% of TI for 2021 and future
C Corp Shareholder Loss - ✔✔Suspended loss due to insufficient tax basis can be carried forward
indefinitely
-> once there is a gain again, first reinstate debt basis
C Corp Shareholder Tax Basis - ✔✔Stock Basis + Debt Basis
Capital Loss Deduction for Corporations - ✔✔3k for individuals is not allowed
- losses can be used to offset gains
- excess can be carried back 3 years
- and forward 5 years
Carrier Cases - ✔✔1. SHIPMENT CONTRACT (FOB seller city)
---Risk passes upon delivery to carrier
2. DESTINATION CONTRACT (FOB buyer city)
----Risk passes at destination
Casualty Loss for C Corps - ✔✔Partially Destroyed: lesser of:
- NBV of property before loss
- Decline in value after loss
3 Elements of a Legally Enforceable Contract - ✔✔Offer + Acceptance
Exchange of consideration
Lack of defense (minor, fraud etc.)
4 elements of negligence - ✔✔duty of care, breach, causation, damages/injury
5 ways to perfect secured transactions - ✔✔Filing
Taking possession (pledge) (tangibles)
Taking control (intangibles)
Automatic perfection
Temporary perfection
A PMSI creditor: - ✔✔almost always wins
whoever fronts $ for asset
doesnt have to be seller, can be bank
Accumulated Adjustments Account (AAA) - ✔✔Retained Earnings for S-Corps
Can only go negative from losses, not distributions
Actual authority terminated by law - ✔✔BID LID
Bankruptcy of principal
Incapacity of principal
Death of either party
License failure
,Illegality
Destruction of subject matter
Apportionment - ✔✔( Property and rent expense / total property + payroll paid in state / total payroll +
sales within state / total sales ) /3
Basis for Depreciation of Transferred Property - ✔✔Lesser of FMV and original Basis
Bonus Depreciation Limitation - ✔✔Assets converted from personal - business cannot use bonus
depreciation
Assets received as gift are also not eligible
Inherited Property also not eligible
Burden of proof is with taxpayer when - ✔✔Most of the time
Burden of proof is with the IRS - ✔✔Civil fraud
Criminal fraud
Willfully aiding and abetting others
C Corp Capital Losses - ✔✔- Can only deduct to the extent of capital gains
- Can carry back 3 years or forward 5 years
C Corp NOL Rule Breakdown - ✔✔Prior to 2018:
Carry back 2yrs
Carry forward 20yrs
2018, 2019, 2020
, Carry back 5yrs
Carry forward forever
2021 and future
Cannot carry back
Carry forward forever
Can offset 80% of TI for 2021 and future
C Corp Shareholder Loss - ✔✔Suspended loss due to insufficient tax basis can be carried forward
indefinitely
-> once there is a gain again, first reinstate debt basis
C Corp Shareholder Tax Basis - ✔✔Stock Basis + Debt Basis
Capital Loss Deduction for Corporations - ✔✔3k for individuals is not allowed
- losses can be used to offset gains
- excess can be carried back 3 years
- and forward 5 years
Carrier Cases - ✔✔1. SHIPMENT CONTRACT (FOB seller city)
---Risk passes upon delivery to carrier
2. DESTINATION CONTRACT (FOB buyer city)
----Risk passes at destination
Casualty Loss for C Corps - ✔✔Partially Destroyed: lesser of:
- NBV of property before loss
- Decline in value after loss
