NewREG

Question 1

Criteria’s for assignable contracts:

Answer 1

all contract rights are assignable except if involves personal services and those materially increasing the risk of the others

Question 2

What contracts must be in writing if over $500?

Answer 2

only sale of goods under UCC applies the $500 rule. statue of fraud applies to contracts that cannot be fully performed in 1 yr

Question 3

If merchant firm offer is made to stay open, will it be enforceable even though it changed of minds?

Answer 3

Yes, a merchant offer (not need for offeree to be merchant) under the UCC rules stays for the period of time stated or reasonable time (up to 3mo.’s most of the time). only qty must be included. warranty of title must be specifically disclaim

Question 4

Fraud in inducement: void or voidable?

Answer 4

voidable, in the execution will be void

Question 5

Unilateral contracts

Answer 5

a promise in exchange for performance

Question 6

dif. of sale w/ reserve or w/o reserve

Answer 6

w/ reserve you can take it back whenever you want, w/o reserve must be sold if an offer is made

Question 7

if person releases the collateral on a promissory note, who will be liable if non performance?

Answer 7

all that transferred after collateral will be release at same time w/ the collateral

Question 8

holders in due course applicable defenses

Answer 8

not personal defenses(e. consideration) but applies real defenses(fraud)

Question 9

are the sell of AR considered as a secured tranx

Answer 9

yes. owing the right to those AR’s (if all then then not considered perfected, if less than 1/2 then can be consider perfected). must file FS in order to perfect an inventory collateral as PMSI

Question 10

Are partners entitle to compensations?

Answer 10

No. only entitle to profits unless otherwise agreed

Question 11

Dividend income applies as income?

Answer 11

Yes, for dependent exemptions thus not qualified. Social sec not income thus can qualify as dependent.

Question 12

Are refunds included as income?

Answer 12

interest on PY refunds are included as income not the actual refund, unless itemized PY and up to deduction used

Question 13

What value of pty received is consider income?

Answer 13

cash or FMV of pty received is considered the income subject to tax

Question 14

Are municipal bond int income included in income?

Answer 14

No. they are excluded

Question 15

When does 25k limit of Mom & Pop applies?

Answer 15

when losses from actively participating. Up to 25k to deduct subject to be lowered by half of the excess of $100k

Question 16

Are residence insurance deductible when for personal use?

Answer 16

No. interest and pty taxes are deductible

Question 17

If borrow money w/ home as collateral is it deductible?

Answer 17

Yes up to $100k on mortgage int. if not used to buy, build or home improvement. If done for that reason then mortgage up to $1M are full deduct

Question 18

How to consider gains from lawsuits due to injury?

Answer 18

deductible(not as income)

Question 19

Are temporary living and meal expense included as moving expense deduction?

Answer 19

Not anymore. just moving your things, transportation and lodging

Question 20

How to account for services provided to charity

Answer 20

not allowed as charitable contribution deduction

Question 21

For what amount will be subject to penalty for not paying estimates?

Answer 21

over $1k will be consider for penalty over the amt outstanding

Question 22

If estimates are used in preparing an IT return, should it be disclose the use of such estimates in the return?

Answer 22

No need to disclose such info

Question 23

How much can be deduct from the loss of selling, exchange and unworthiness of stk?

Answer 23

Up to $50k can be deducted but only to original owners

Question 24

Can tax years be reopen after statute of limitations expires?

Answer 24

Not if considered no fraudulent. For fraud it can be looked at w/o limitations

Question 25

Organizational expenses

Answer 25

for taxes, max deduct $5k if under $50k expense, then divide by 15yrs

Question 26

how to account for family insurance covered by Scorp?

Answer 26

as income if shareholder

Question 27

To which entity must a firm register before performing services to SEC clients?

Answer 27

PCAOB

Question 28

CPA negligent opinion on audit opinion

Answer 28

liable to those he knows will rely on FS

Question 29

shelf registration of sec.’s

Answer 29

original investment kept updated

Question 30

strict liability does not applies to

Answer 30

special design products

Question 31

In order to be attached a sec agreements must

Answer 31

must exist, after can either be signed or take possession. sec agreements are not bound to include the amt of the obligation being secured

Question 32

Common carrier not liable if? / warehouse liable if

Answer 32

agreed and contracted. by only being negligent. real defenses makes the bill of lading not negotiable

Question 33

ordinary income from S Corp flowing to k-1?

Answer 33

No, all other income does and capital loss

Question 34

Is interest income from municipal bond included in gross income of individual?

Answer 34

No, excluded (the ones that are included are refunds, federal and treasury.

Question 35

Limit for mortgage interest to buy, build or improve

Answer 35

$1M and $100k if not for any of those

Question 36

Child dependent care rules

Answer 36

must be under 13yrs, up to $3k per child, calculated from lowest income of parents

Question 37

penalty for amt due after withholding if

Answer 37

over $1k

Question 38

how many years after for amendments and to claim refunds?

Answer 38

3yrs for amendments and 2 after paid for refunds

Question 39

when can you depreciate for real pty and personal pty?

Answer 39

mid-mo. for real(27/39) and mid-yr/mid-qtr for personal(3/5/7) pty. (goodwill over 15yrs)

Question 40

accrual method required for

Answer 40

large c corps, tax shelters, manufacturing, inventory (not for PSC’s)

Question 41

sell of stkholder interest is considered dividend?

Answer 41

No. will be like a normal sale FMV-AJE for the gain. will not affect PY E&P

Question 42

The under/over 25% rule applies to

Answer 42

unintentional underreporting of income

Question 43

organizational exp are?

Answer 43

legal fees, acct services, temp director and incorporated fees to state. dep over 15yrs (like intangibles)

Question 44

NOL’s exists for who?

Answer 44

individual, c corp and estate/trusts

Question 45

Who is not subject to Acc EanP tax?

Answer 45

PHC’s

Question 46

What tax effects does a trade in on old assets have?

Answer 46

No gain is recorded thus no tax effect.

Question 47

What is excluded from like-kind exchange?

Answer 47

real pty for real pty, partnership int for int, manuf equp for factory bldg