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Zipties
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| Posted: 29 Dec 2011 at 14:56 | IP Logged
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Ok, so following is a question from ExamMatrix... I'm quite confused on the answer which makes me believe it's wrong, but maybe someone can explain why this is???
Alt Partnership, as cash-basis CY entity, began business on Mar 1, 2010. Alt incurred and paid the following in 2010 prior to Mar 1, 2010
Legal Fees to prepare partnership agreement: $14,000
Accounting fees to prepare the representations in the offering materials: $15,000
Alt elected to amortize costs. What was the maximum amount that Alt could deduct on the 2010 partnership return.
Answer: $5,150
I get that any syndication fees aren't amortizable, so the $15,000 is out. Which leaves $14,000.
I did: 5,000 + [(14,000-5,000) * 10/180)] = $5,500
They did: 5,000 + [(14,000-5,000) * 3/180)] = $5,150 Why???
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Entourage
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| Posted: 29 Dec 2011 at 16:18 | IP Logged
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I dont understand this either. Based on the question, I did the calculation and got $5,500 as well. It's most likely an error unless we're both missing something.
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HopeCPAin2010
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| Posted: 29 Dec 2011 at 19:58 | IP Logged
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I get $5,500 as well. Your calculation seems right to me. It was said that you need to look at when the business started. So I think taking 10 month perid is right.
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Zipties
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| Posted: 30 Dec 2011 at 10:23 | IP Logged
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I sent them an e-mail about the question... I'm sure it's a mistake. The problem is that the question didn't have the answer I came up with as an option...
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perniva
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| Posted: 30 Dec 2011 at 10:52 | IP Logged
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What is a CY entity?
Zipties wrote:
Ok, so following is a question from ExamMatrix... I'm quite confused on the answer which makes me believe it's wrong, but maybe someone can explain why this is???
Alt Partnership, as cash-basis CY entity, began business on Mar 1, 2010. Alt incurred and paid the following in 2010 prior to Mar 1, 2010
Legal Fees to prepare partnership agreement: $14,000
Accounting fees to prepare the representations in the offering materials: $15,000
Alt elected to amortize costs. What was the maximum amount that Alt could deduct on the 2010 partnership return.
Answer: $5,150
I get that any syndication fees aren't amortizable, so the $15,000 is out. Which leaves $14,000.
I did: 5,000 + [(14,000-5,000) * 10/180)] = $5,500
They did: 5,000 + [(14,000-5,000) * 3/180)] = $5,150 Why???
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FAR 05/29/2011 #82
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Becker 2011
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Topic: Partnership Org Costs Amortization?
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