Final Brush Up

Question 1

Bankruptcy Ch 7 filing dismissed or converted to a Ch 13 filing ____________

Answer 1

60 times the debtor’s avg monthly disposable income (after deducting allowable expenses) exceeds $15,150

Below will not cause dismissal of Ch 7:

*If 60 times a debtor’s avg monthly disposable income (after allowable expenses) is at least $9,075 but less than $15,150 and the debtor is only able to pay 10% of unsecured claims, the debtor can file for Ch 7. It is only debtors within these financial figures who are able to pay 25% or more of unsecured, nonpriority debts that are subject to conversion or dismissal for abuse.

Question 2

1st Q - 87.5%
2nd Q - 62.5%
3rd Q - 37.5%
4th Q - 12.5%

Answer 2

Mid Quarter Convention

Question 3

PSC =21% flat tax rate (accounting, law)

PHC = 20% penalty

Answer 3

Credit not available to PSC = EIC, Child and dependent care credit, AOC

PSC

Accumulated Earnings Credit, DRD are subtracted in arriving at accumulated taxable income.

Question 4

Rescission undoes a contract and restores the parties to the original positions

Answer 4

Revocation - withdrawal of an offer

Question 5

Unilateral contracts require consideration

Answer 5

Merchants good faith

Duty to observe the reasonable commercial standards of fair dealing in the trade.

Question 6

Shipment contract (not destination one)___Buyer should pay the freight expense (opposite)

Answer 6

Title (not risk of loss) of the goods passes to buyer even if goods are non-conforming

Question 7

Party will be discharged

Answer 7

Prevention of a performance
Accord and satisfaction

Question 8

Part of the proceeds from installment sales is taxable as ________

Amortization of bond premium (reduced)
Discount

Answer 8

Interest

Guam and Puerto Rico = Tax Exempt

US Series EE bonds issued after 1989 are Tax Exempt provided (1) they are used for higher education less tax free scholarship (2)TP is over age 24 when bond is issued
(3) MFJ return
(4) MAGI requirements - Single $96,800-$111,800
$145,200-$175200
(5) Must be in TP’s and SP’s Names , child can be listed as beneficiary but not as a co-owner

Question 9

Defense to the performance where contract contains a substantial error

1.Mutual mistake of material facts
2. unilateral mistake of a material fact where other party was aware of the error

Answer 9

Most state boards have rules that mirror the AICPA rules. A CPA does not have to be a member of the AICPA to practice in multiple states.

Question 10

4 year statute of limitations by UCC

Question 11

IRA

Answer 11

Single = 77k-87k
MFJ = 123k - 143k
MFJ (non-participating spouse) = 230k-240k

Question 12

Constructive fraud, CPA =Gross negligence and reckless to take out information

Answer 12

Actual Fraud = Scienter

Question 13

Exception to penalty Tax - IRA

Answer 13

1. Homebuyer first time = buys within 120 days of distribution or 4 months (10k maximum exclusion)
2. Medical Insurance = If unemployed with 12 consecutive weeks of unemployment compensation
3. Medical Expenses in excess of % of AGI floor
4. Permanent disability only not temp diasbility
5. Education - College tuition, books, fee
6. Adoption or Birth of child made within 1 year from the DOB or adoption ($5,000 maximum exclusion)
7. Natural disaster - ($22,000) per year
8. Death or Terminal illness
9. Emergency expense (for self or family upto $1000 per year
10. Domestic abuse victims (lesser of $10,000 or 50% of retirement account)

Question 14

A TP with an address outside the US has ________

Answer 14

150 days for notice of deficiency

90 days within US

Question 15

Filing a financing statement lasts for 5 years and can be continued with a continuation statement if filed within 6 months of expiration.

Answer 15

FS can be refiled for each new 5 year period

Question 16

Lowest MACRS Rate

Answer 16

For 179 Deduction