Final Reg Exam Questions Part II Flashcards
What is the difference between a donee beneficiary vs. a creditor beneficiary?
A donee owes NO DEBT, and NO DUTY owed.
Common Law Fraud suit - what are the 4 elements?
Material Misstatement
Loss has been suffered
Information was relied upon (justifiable)
Scienter / reckless misconduct
2018 and prior divorce - Alimony received + property settlement. How to tax?
Alimony - taxable
Property - not taxable
Child support NEVER taxable
1244 worthless: what goes on return as last date of holding?
Last day of current taxable year
Real estate contracts must be signed - what happens if only the offeror signs? Oral acceptance by offeree?
Contract enforceable only on offeror because they are the only one who signed.
What is the maximum amount of Social Security benefits to be included in gross income?
85%
ON the sale of a gift - use FMV at time of transfer OR donor’s original cost basis?
Donor’s original cost basis.
Can implied warranty of title be disclaimed?
Yes it can, but if a merchant simply says “any and all warranties disclaimed” it DOES NOT include the implied warranty of title. Needs SPECIFIC LANGUAGE disclaiming implied warranty of title.
In absence of election of an accounting period, a partnership would adopt:
a tax year of one or more partners with more than a 50% interest in profits and capital
What does a financing statement contain?
- Description of collateral
- Name/address of debtor
- Name/address of creditor
NO witness required
NO dollar amount
NO date of payment of debt
Depreciation recapture vs. total gain - which to recognize?
The lesser of the total gain realized or the accumulated depreciation.
If understatement is due to fraud to failure to file, the time period that the IRS has to assess additional taxes against the taxpayer is how long?
UNLIMITED
Regarding taxpayer penalty - you can either pay
___% of current year tax
___% of prior year liability
___% of prior year liability if PY AGI > $150,000
Regarding taxpayer penalty - you can either pay
90% of current year tax
100% of prior year liability
110% of prior year liability if PY AGI > $150,000
How many audits of public companies does a CPA firm registered with the PCAOB have to perform before it receives and annual inspection from the PCAOB?
More than 100 audits
Who must have capacity in order to form an agency relationship?
the principal must have capacity to give legal consent
Cases tried in what court have NO appeal?
Small Cases Division of the U.S. Tax Court
A party losing in the Federal U.S Federal Claims Court or U.S. Tax Court appeals where?
U.S. Court of Appeals
A party losing in the Federal DISTRICT Court may appeal where?
U.S. Court of Appeals for the Federal Circuit.
How can an award be non-taxable?
- Recipient selected without any action on their part
- Recipient performed no services
- Designated to a charity directly from awarding organization
Are public accounting firms allowed to provide bookkeeping services to audit clients?
YES, can’t provide bookkeeping, appraisal, valuation, actuarial, internal audit, etc.
However, they are allowed to provide those services to a NON-audit client.
After an S-corp’s status is revoked, how long must they wait to file again?
5 years
Person dies. What is the exception rule that applies to medical expenses?
If a waiver is filed, the medical expenses may be deducted on final 1040, even if the estate paid. (treated as paid by the decedent)