REG (CPA) Exam Questions and
Answers 100% Pass | Already Graded A+
How do you calculate the deductible loss for a partner in a partnership? -
✔✔Beg Basis
+ Net LT capital gain
- Cash distributions
= Basis for determining allowable loss deduction
- Loss i limited to partner's basis.
What is the basis of gifted property? - ✔✔- FMV > NBV , gift is rollover
basis
- The basis is usually the donor's cost basis unless the FMV is less than
the adj (cost) basis. When FMV<Adj basis, the basis is determined by the
recipients selling price.
- if selling price higher than adj basis = recipients basis is the donor adj
basis
,- if selling price b/w donor adj basis and FMV = recipients basis equals
selling price
- if selling price below FMV = recipient basis equals FMV
- donor ADJ basis
- FMV
Situations that terminate an S corporation: - ✔✔- having corporation or
partnership as shareholder
- having more than 100 shareholders
- having shareholder that is non US citizen
Which of the following debtors are not eligible for relief under the Chapter
11 bankruptcy code? - ✔✔stockbrokers
What are tax exempt items ? - ✔✔interest on state and local bonds
What is considered a US shareholder of a controlled foreign corporation? -
✔✔A U.S person who owns at least 10% of stock value OR voting stock
Capital Loss - individual - ✔✔- deduction is limited to $3,000 per year with
excess carried forward indefinitely
Which individuals cannot be involuntarily petitioned into bankruptcy? -
✔✔Farmers
, Filling out form 1040 - ✔✔Line 1 wages: W2
Line 2b taxable interest: Schedule K-1 interest income
Line 8 and Line 10 and Line 13 : calculated from schedule 1
How is income from transfer of partnership interest treated when a person
receives interest in partnership for services provided? - ✔✔The interest is
valued at
- (% of interest) X FMV of partnership
- ordinary income
Consolidated Income statement - ✔✔- Capital gains, charitable
contributions, and dividends received are determined at the consolidated
level
Rescission - ✔✔a method by which the parties of a contract are restored to
their original position.
Novation - ✔✔one party accepts the performance pf a third party in place of
the party obligated to perform under the original contract
- usually done when promoter creates liabilities pre-existing of corporation
formation
Itemized deductions for individuals (schedule A) - ✔✔- state income taxes
Answers 100% Pass | Already Graded A+
How do you calculate the deductible loss for a partner in a partnership? -
✔✔Beg Basis
+ Net LT capital gain
- Cash distributions
= Basis for determining allowable loss deduction
- Loss i limited to partner's basis.
What is the basis of gifted property? - ✔✔- FMV > NBV , gift is rollover
basis
- The basis is usually the donor's cost basis unless the FMV is less than
the adj (cost) basis. When FMV<Adj basis, the basis is determined by the
recipients selling price.
- if selling price higher than adj basis = recipients basis is the donor adj
basis
,- if selling price b/w donor adj basis and FMV = recipients basis equals
selling price
- if selling price below FMV = recipient basis equals FMV
- donor ADJ basis
- FMV
Situations that terminate an S corporation: - ✔✔- having corporation or
partnership as shareholder
- having more than 100 shareholders
- having shareholder that is non US citizen
Which of the following debtors are not eligible for relief under the Chapter
11 bankruptcy code? - ✔✔stockbrokers
What are tax exempt items ? - ✔✔interest on state and local bonds
What is considered a US shareholder of a controlled foreign corporation? -
✔✔A U.S person who owns at least 10% of stock value OR voting stock
Capital Loss - individual - ✔✔- deduction is limited to $3,000 per year with
excess carried forward indefinitely
Which individuals cannot be involuntarily petitioned into bankruptcy? -
✔✔Farmers
, Filling out form 1040 - ✔✔Line 1 wages: W2
Line 2b taxable interest: Schedule K-1 interest income
Line 8 and Line 10 and Line 13 : calculated from schedule 1
How is income from transfer of partnership interest treated when a person
receives interest in partnership for services provided? - ✔✔The interest is
valued at
- (% of interest) X FMV of partnership
- ordinary income
Consolidated Income statement - ✔✔- Capital gains, charitable
contributions, and dividends received are determined at the consolidated
level
Rescission - ✔✔a method by which the parties of a contract are restored to
their original position.
Novation - ✔✔one party accepts the performance pf a third party in place of
the party obligated to perform under the original contract
- usually done when promoter creates liabilities pre-existing of corporation
formation
Itemized deductions for individuals (schedule A) - ✔✔- state income taxes
