CPA Exam REG Series-G Questions and
Answers 100% Passed | Latest Update
The lifetime gift tax exclusion is: - ✔✔$5.45 million
The maximum generation skipping tax rate is: - ✔✔40%
The Securities Exchange Act of 1934 is applicable to any firm who the
following two traits apply: - ✔✔1.shares are listed on a national securities
exchange
2. any firm with at least 500 shareholders and gross assets of at least $10
million.
In determining whether the consideration requirement to form a contract
has been satisfied, the consideration exchanged by the parties to the
contract must be: - ✔✔legally sufficient
Contribution to an IRA are limited in 2016 to: - ✔✔5500 per year per
individual (+1000 for individuals 50+)
Contributions to a traditional IRA are deductible in arriving at AGI unless
*both* of the following conditions apply: - ✔✔1. The individual is actively
participating in another pension or profit sharing plan AND
,2. AGI on the tax return exceeds 71000 (single), 118000 MFJ
Contributions to *Coverdell education savings accounts* must be made
before: - ✔✔the account beneficiaries are 18 years old
(Payments of 2000 per year per beneficiary)
Contributions may be made up to due date of return.
Qualified Tuition Programs (529 Plans) - ✔✔Used for undergraduate and
graduate. Earnings accumulate free of federal tax as long as money stays
in the plan and is used for education.
2 Types:
1. Prepaid program (paid to the school)
2. Savings account plan
Can contribute up to annual gift tax exclusion or can frontload 5 years
(14000*5)=70,000
Can contribute to coverdell and QTIP in same year.
What amount of insurance premium is includible in gross income? - ✔✔If a
shareholder owns less than 2% of the company, the correct answer would
be zero.
,If they own more than 2% of the company, the insurance premiums paid by
the S corporation are fully taxable to the shareholder (and deductible to the
corp)
A group term life insurance plan is not discriminatory if - ✔✔the plan
benefits 70% of all employees.
How to calculate the kiddie tax: - ✔✔If a child has interest, dividends, and
other *unearned income* of *more than $2,000*, part of that income may
be taxed at the parent's tax rate instead of the child's tax rate.
The "kiddie tax" is a tax on unearned income paid to minors.
For 2016:
1. the first $1,050 of such income is tax free
2. the second $1,050 is taxed to the child at his/her tax rate
3. all unearned income over $2,100 is taxed at the parents' tax rate.
The kiddie tax rule now applies to children under age 19 and full-time
college students under the age of 24. Since Chris has $3,000 of unearned
income, the amount greater than $2,100, or $900, would be taxed at
Chris's parents' maximum tax rate. The child must be required to file a tax
, return. The child's tax is calculated on IRS Form 8615, Tax for Certain
Children Who Have Unearned Income, and included with the child's return
As a general rule, corporations are not required to file schedules L, M-1,
and M-2 if: - ✔✔their total assets at the end of the taxable year and the
corporation's total receipts for the tax year are less than $250,000.
Mike Smith received $10,000 (consisting of $6,000 principal and $4,000
interest) when he redeemed a Series EE savings bond in Year 6. The bond
was issued in his name in Year 1 and the proceeds were used to pay for
Mike's 21-year-old daughter's college tuition. Mike had not elected to report
the yearly increases in the value of the bond. Mike must include what
amount in gross income for Year 6 as a result of the bond redemption? -
✔✔A cash-basis taxpayer, unless he elects otherwise, is required to report
the total increment in value of noninterest-bearing U.S. savings bonds
issued at a discount (i.e., Series E and EE) at the time the bonds are
surrendered. Thus, the increment in value from the date of purchase to the
date of surrender at or before maturity is to be reported as income when
the bond is surrendered.
As a result, when Mike redeems the Series EE bond, $4,000 in interest is
taxable.
Answers 100% Passed | Latest Update
The lifetime gift tax exclusion is: - ✔✔$5.45 million
The maximum generation skipping tax rate is: - ✔✔40%
The Securities Exchange Act of 1934 is applicable to any firm who the
following two traits apply: - ✔✔1.shares are listed on a national securities
exchange
2. any firm with at least 500 shareholders and gross assets of at least $10
million.
In determining whether the consideration requirement to form a contract
has been satisfied, the consideration exchanged by the parties to the
contract must be: - ✔✔legally sufficient
Contribution to an IRA are limited in 2016 to: - ✔✔5500 per year per
individual (+1000 for individuals 50+)
Contributions to a traditional IRA are deductible in arriving at AGI unless
*both* of the following conditions apply: - ✔✔1. The individual is actively
participating in another pension or profit sharing plan AND
,2. AGI on the tax return exceeds 71000 (single), 118000 MFJ
Contributions to *Coverdell education savings accounts* must be made
before: - ✔✔the account beneficiaries are 18 years old
(Payments of 2000 per year per beneficiary)
Contributions may be made up to due date of return.
Qualified Tuition Programs (529 Plans) - ✔✔Used for undergraduate and
graduate. Earnings accumulate free of federal tax as long as money stays
in the plan and is used for education.
2 Types:
1. Prepaid program (paid to the school)
2. Savings account plan
Can contribute up to annual gift tax exclusion or can frontload 5 years
(14000*5)=70,000
Can contribute to coverdell and QTIP in same year.
What amount of insurance premium is includible in gross income? - ✔✔If a
shareholder owns less than 2% of the company, the correct answer would
be zero.
,If they own more than 2% of the company, the insurance premiums paid by
the S corporation are fully taxable to the shareholder (and deductible to the
corp)
A group term life insurance plan is not discriminatory if - ✔✔the plan
benefits 70% of all employees.
How to calculate the kiddie tax: - ✔✔If a child has interest, dividends, and
other *unearned income* of *more than $2,000*, part of that income may
be taxed at the parent's tax rate instead of the child's tax rate.
The "kiddie tax" is a tax on unearned income paid to minors.
For 2016:
1. the first $1,050 of such income is tax free
2. the second $1,050 is taxed to the child at his/her tax rate
3. all unearned income over $2,100 is taxed at the parents' tax rate.
The kiddie tax rule now applies to children under age 19 and full-time
college students under the age of 24. Since Chris has $3,000 of unearned
income, the amount greater than $2,100, or $900, would be taxed at
Chris's parents' maximum tax rate. The child must be required to file a tax
, return. The child's tax is calculated on IRS Form 8615, Tax for Certain
Children Who Have Unearned Income, and included with the child's return
As a general rule, corporations are not required to file schedules L, M-1,
and M-2 if: - ✔✔their total assets at the end of the taxable year and the
corporation's total receipts for the tax year are less than $250,000.
Mike Smith received $10,000 (consisting of $6,000 principal and $4,000
interest) when he redeemed a Series EE savings bond in Year 6. The bond
was issued in his name in Year 1 and the proceeds were used to pay for
Mike's 21-year-old daughter's college tuition. Mike had not elected to report
the yearly increases in the value of the bond. Mike must include what
amount in gross income for Year 6 as a result of the bond redemption? -
✔✔A cash-basis taxpayer, unless he elects otherwise, is required to report
the total increment in value of noninterest-bearing U.S. savings bonds
issued at a discount (i.e., Series E and EE) at the time the bonds are
surrendered. Thus, the increment in value from the date of purchase to the
date of surrender at or before maturity is to be reported as income when
the bond is surrendered.
As a result, when Mike redeems the Series EE bond, $4,000 in interest is
taxable.
