CPAnet Forum: 2012 AICPA released questions

Active Topics

Memberlist

Help

REG STUDY GROUP
CPAnet Forum : REG STUDY GROUP

Topic: 2012 AICPA released questions (

Topic Closed)

Author

Message

<< Prev Topic | Next Topic >>

Spring Cpa
Newbie
Newbie

Joined: 17 Dec 2009
Online Status: Offline
Posts: 13

Posted: 26 May 2012 at 02:37 \| IP Logged

hi fellas, I was hoping someone could help me on two questions from the 2012 questions that i cant find answers to:

27. CPA

For which of the following entities is the owner's basis increased by the owner's share of profits and

decreased by the owner's share of losses but is not affected by the entity's bank loan increases or

decreases?

a. S corporation.

b. C corporation.

c. Partnership.

d. Limited liability company.

Explanation

Choice "a" is correct.

how the hell on earth is the answer S corp? according to my understanding shareholders in C corps do not assume the liabilities of the corporation and S corps are taxed like partnerships.. please guide me if im wrong

35. CPAOn

their joint tax return, Sam and Joann had adjusted gross income (AGI) of $150,000 and claimed the

following itemized deductions:

Interest of $15,000 on a $100,000 home equity loan to purchase a motor home

Real estate tax and state income taxes of $18,000

Unreimbursed medical expenses of $15,000 (prior to AGI limitation)

Miscellaneous itemized deductions of $5,000 (prior to AGI limitation)

Based on these deductions, what would be the amount of AMT add-back adjustment in computing

alternative minimum taxable income?

a. $21,750

b. $23,750

c. $35,000

d. $38,750

Explanation

Choice "d" is correct.

I am coming to the answer of $35,000, can you tell me how is the answer $38,750?

lauritta
Contributor

Joined: 02 Jan 2011
Online Status: Offline
Posts: 83

Posted: 26 May 2012 at 15:22 \| IP Logged

35.Add back
3750 (150000*2.5)medical
18000 (tax)
15000 (interest)
2000 (misc ded)
total 38750

__________________
FAR - passed
REG - passed
AUD -
Wiley, some lectures from Becker

Spring Cpa
Newbie
Newbie

Joined: 17 Dec 2009
Online Status: Offline
Posts: 13

Posted: 27 May 2012 at 09:00 \| IP Logged

Lauritta thanks for your reply but I dont undersand two things:

1) why is the Interest of $15,000 on a $100,000 home equity loan to purchase a motor home is added here, isnt this interest allowed because they are acquiring a new house?

2) The medical expenses in AMT are added if they exceed 10%, so why is it that you added the difference between 7.5% and 10%?

I find AMT a very difficult topic to understand honestly

lauritta
Contributor

Joined: 02 Jan 2011
Online Status: Offline
Posts: 83

Posted: 27 May 2012 at 18:32 \| IP Logged

1. You can deduct the home equity interest only to buy a
house or improve a house. It does not include a motor
home such as an RV. It is like using the home equity to buy
a car. It would not be deductible for AMT purpose, you have
to add it back (but it is deductible on Sch A)
2. As far as medical expenses for the AMT purposes you
have to use 10% not 7.5%. You have already deducted 7.5%,
now you have to bring it to 10%. That is why you add back
only the difference.

__________________
FAR - passed
REG - passed
AUD -
Wiley, some lectures from Becker

Spring Cpa
Newbie
Newbie

Joined: 17 Dec 2009
Online Status: Offline
Posts: 13

Posted: 28 May 2012 at 01:39 \| IP Logged

lovely, thank you very much, when is your exam? I am testing on May 31st

Page of 2 Next >>

Printable version

You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum