REG 4 Flashcards
Does a partner has apparent authority to convey a real property held in the partnership name?
if the sale of real estate is within the regular course of a partnership’s business, a partner has apparent authority to convey real property held in the partnership name.
The last endorsement on a negotiable instrument is a special endorsement : is instrument bearer or order?
If the last endorsement on a negotiable instrument is a special endorsement, the instrument is order paper. A special endorsement specifies the person to whom or to whose order it makes the instrument payable.
A check endorsed in blank : bearer or order paper?
A check endorsed in blank is bearer paper.
A check made payable to the order of cash : bearer or order paper?
A check made payable to the order of cash is bearer paper?
Are Trust with an independent trustee that was established for a minor included or excluded in a grantor’s gross estate?.
Trust with an independent trustee that was established for a minor would be excluded from a grantor’s gross estate.
When alternate valuation is elected and distribution occur before alternate valuation date, what is the basis of the stock?
The $240,000 FMV of the stock on date of distribution
Why is a partnership restricted in choosing a tax year?
A partnership generally is restricted in choosing a tax year in order to prevent the deferral of income to partners that could otherwise occur. Thus, a newly formed partnership is required to adopt the same taxable year as is used by its one or more partners owning a more than 50% interest in profits and capital. This insures that there will be no deferral of reporting of income for more than 50% of the partnership’s income.
The following note was executed by Elizabeth Quinton on April 17, year 1, and delivered to Ian Wolf:
(Face) April 17, year 1
On demand, the undersigned promises to pay to the order of Ian Wolf
Seven Thousand and 00/100 Dollars
El
This note was originally order paper because it was payable to the order of Ian Wolf. It next became bearer paper when Ian Wolf endorsed it on the back in blank, that is, without specifying any endorsee. When Samuel Thorn endorsed it and wrote “Pay: George Vernon,” it became order paper. Next, when George Vernon endorsed it, it remained as order paper since he designated “Pay: Alan Yule.” The last endorsement by Alan Yule was a blank endorsement which converted it to bearer paper. ->Order, bearer, order, order, bearer.
When does apparent authority exists?
Apparent authority exists when the principal represents the agent to third parties to be his/her agent. In this case, the principal wished to be undisclosed.
What is the result of he filing of the bankruptcy petition?
The filing of the bankruptcy petition acts as an automatic stay of lawsuits by the debtor’s creditors.
To which prohibting infectinos are subject Tax preparers who aid and abet federal tax evasion?
Tax preparers who aid and abet federal tax evasion are subject to both injunction prohibiting them from acting as tax preparers and general federal criminal prosecution
Under the Securities Exchange Act of 1934, in which timeframe is a corporation’s officers (and all other insiders) required to report any changes in ownership of the corporation’s stock?
Under the Securities Exchange Act of 1934, a corporation’s officers (and all other insiders) are required to report any changes in ownership of the corporation’s stock within 15 days.
Under the 1934 Act, the proxy statement, when must the proxy itself, and any proxy soliciting material concerning securities required to be registered under the 1934 Act be filed with and approved by the SEC?
Under the 1934 Act, the proxy statement, the proxy itself, and any proxy soliciting material concerning securities required to be registered under the 1934 Act must be filed with and approved by the SEC before it can be sent to shareholders.
What are the ficuciary duty of an agent?
The fiduciary duties of a gratuitous agent are the same as the duties of an agent who is compensated. Under a gratuitous agent’s duty to account, s/he must account to the principal for profits and everything that rightfully belongs to the principal including the principal’s property. However the agent has a duty not to commingle funds.
When must The federal estate tax return (Form 706) be filed and the tax paid in case of decedent’s death?
The federal estate tax return (Form 706) must be filed and the tax paid within nine months of the decedent’s death, unless an extension of time has been granted.
To what kind of sales is the firm offer rules applying?
The firm offer rule does not apply because this contract does not involve the sale of goods.
What is the condition for te presence of an option in a contract?
An option is present if consideration is given for the opportunity to purchase
Who wins under a notice-type statut
Under a notice-type statute, a subsequent bona fide (good-faith) purchaser, whether s/he records or not, wins over previous purchaser who did not record before that subsequent
Who wins under a race-notice type (notice-race) statute
Under a race-notice type (notice-race) statute, the subsequent bona fide purchaser wins over a previous purchaser only if s/he also records first (i.e., a “race Eto file first)
Who wins under a race statute
Under a race statute, the first to record deed wins
What nature must havee the acts of a creditor for the surety’s relase from liability?
The general rule is that a surety is released from liability for acts of the creditor which materially increase the surety’s risk. In this case the failure of the creditor to give notice of the prior embezzlement materially increased the surety’s risk.
What must be proven by plaintiff under the Securities Exchange Act of 1934, Section 10(b) and Rule 10b-5
The plaintiff must prove that damages were incurred as a result of the act, that there was a material misstatement or omission, that s/he relied upon the financial information, and that scienter exists. Scienter is generally defined as the knowledge of or the intent to deceive, defraud, or manipulate.
What is the effect of Anticipatory repudiation?
Anticipatory repudiation discharges the nonrepudiating party (Kemp) from the contract and gives this party two options: (1) sue immediately for breach of contract or (2) for a commercially reasonable time, ignore the breaching party’s repudiation and wait for the repudiating party to perform at the appointed time.
In case of Anticipatory repudiation, what may happen if the repudiating party does not subsequently perform at the appointed time?
If the repudiating party does not subsequently perform, the nonrepudiating party may then sue for breach.
In case of Anticipatory repudiation, what is used in computing the buyer’s damage?
The market value to be used in computing the buyer’s damages would be the market value at the time the buyer learned of the breach.
How can an executor treat medical expenses paid by the decedent’s estate for the decedent’s medical care?
The executor may elect to treat medical expenses paid by the decedent’s estate for the decedent’s medical care as paid by the decedent at the time the medical services were provided.
What are the requirement to be eligible to treat medical expenses paid by the decedent’s estate for the decedent’s medical care as paid by the decedent at the time the medical services were provided?
To qualify for this election, the medical expenses must be paid within the 1-year period after the decedent’s death, and the executor must attach a waiver to the decedent’s Form 1040 indicating that the expenses will not be claimed as a deduction on the decedent’s estate tax return.
To which defense is subject a HDC?
HDC takes a negotiable instrument free of personal defenses, but not real defenses.
Give types of personal defenses
Defenses assertable against any party including a HDCBreach of contract, Lack or failure of consideration, Prior payment, Unauthorized completion, Fraud in the inducement, Nondelivery, Ordinary duress or undue influence, Mental incapacity, Illegality
Which bonds are an obligation of a surety?
Official bonds. This is a secondary obligation: Basically a party is guaranteeing that a public official will discharge duties in compliance with laws and regulations.
When an executor may elect The alternate valuation?
The alternate valuation can be elected only if its use decreases both the value of the gross estate and the estate tax liability.
Is valuation election revocable or irrevocable?
The alternate valuation election is irrevocable
To what kind of property in the estate does the alternate valuation apply?
Applies to all property in the estate; it cannot be made on an individual property basis.
What is the meaning of gross income?
The term gross income means income from whatever source derived and specifically includes alimony and separate maintenance payments.
Give examples of elements excluded from gross income
Compensation for injuries and sickness, the rental value of parsonages furnished to ministers of the gospel, and tuition scholarships are generally excluded from gross income as well as adjusted gross income.
What is the earned income credit?
The earned income credit is a refundable tax credit for eligible low-income taxpayers.
What are the requirement to be eligible for the earned income credit?
To be eligible, an individual must have earned income and generally must maintain a household for more than half the year for a qualifying child.
What is “qualifying child” included in the earned income credit eligibility requirement?
A qualifying child includes the taxpayer’s child or grandchild who lives with the taxpayer for more than half of the taxable year, and is under age 19, or a full-time student under age 24, or permanently or totally disabled. The earned income credit is not available to married taxpayers filing separately.
Who bears the risk of loss and title to goods being purchased on a sale on approval basis until the sale is completed?
Provided there is no agreement to the contrary and neither party is in breach, both risk of loss and title to goods being purchased on a sale on approval basis remain with the seller until the sale is completed
Question 80:
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EMEN-0026)
Need a hint?
See Reference…
Which remedies is(are) allowed when a company is found to have violated the Age Discrimination in Employment Act when firing an employee
Remedies for violation of this Act include reinstatement of the employee to his or her job. The employee can also receive monetary damages for any wages or salary lost until reinstatement.
How are the increase in value of property due to improvements made by lessee treated?
Lease improvements. The increase in value of property due to improvements made by lessee are excluded from lessor’s income unless improvements are made in lieu of fair value rent.
Aent and principal have agreed that agency was irrevocable : can the principal elect to terminate the agency relationship?
principal can elect to terminate the agency relationship and be liable for breach of contract even though he has agreed that the agency is irrevocable.
How are treated lossed on worthless securities?
Worthless securities generally receive capital loss treatment. However, if the loss is incurred by a corporation on its investment in an affiliated subsidiary corporation (80% or more ownership), the loss is generally treated as an ordinary loss.
For deposit only, without recourse, (signed) Jan Brake : what kind of endorsement is it?
restrictive, qualified, and blank.
Pay to Jenny Eaton if she completes the contract dated August 2, (signed) Jan Brake. what kind of endorsement is it?
special and restrictive.
Without recourse, (signed) Jan Brake. what kind of endorsement is it?
blank and qualified
upon foreclosure, which mortgagee has priority and must be paid in full?
Upon foreclosure, the first mortgagee has priority and must be paid in full before any payment is made to a subsequent mortgagee (second or third mortgagees).
What is the use of the doctrine of marshalling of assets?
A second mortgagee remains a secured creditor in the bankruptcy proceedings although his interest is inferior to a first mortgagee.The doctrine of marshalling of assets may help a second mortgagee since it allows him to compel a first mortgagee to foreclose on other property available to the first mortgagee as security before foreclosing on property which a second mortgagee has a claim on.
What is an estate DNI’s
An estate’s DNI represents the maximum amount of available distribution deduction, and the maximum amount on which beneficiaries can be taxed.
Which is the maximum credit amount for adoption expenses?
The credit for adoption expenses is a nonrefundable credit of up to $13,190 (for 2014) for qualified adoption expenses incurred for each eligible child.
Morris Corporation’s income tax return for 2014 shows deductions exceeding gross income by $75,000. Included in the tax return are the following items:
Net operating loss deduction (carryover from 2013) $13,400
Dividends received deduction 6,600
What is
The requirement is to determine the NOL for 2014 given that deductions in the tax return exceed gross income by $75,000. In computing the NOL for 2014, the DRD of $6,600 would be fully allowed, but the $13,400 NOL deduction (carryover from 2013) would not be allowed. $75,000 ? $13,400 = $61,600.
What is required to an individual whose tax liability is not sufficiently covered by withholding?
An individual whose tax liability is not sufficiently covered by withholding must pay estimated tax in quarterly installments or be subject to penalty.
When is there no underpayment penalty in case an individual whose tax liability is not sufficiently covered by withholding?
Generally, there will be no underpayment penalty if amounts withheld plus estimated payments are at least equal to the lesser of 90% of the individual’s current year’s tax (determined on the basis of actual income or annualized income), or 100% of the preceding year’s tax.
What are the conditions to be able to base one current year’s estimated tax payments on the preceding year’s tax liability?
An individual whose AGI for the preceding year exceeds $150,000 must use 110% (instead of 100%) if s/he wishes to base his or her current year’s estimated tax payments on the preceding year’s tax liability.
Who can apply the use of the adjusted seasonal installment method?
The use of the adjusted seasonal installment method is available to corporations, but is not available for individuals.
Who can a A subsequent bona fide purchaser defeat?
A subsequent bona fide purchaser will not defeat a prior perfected secured interest in consumer goods for which a financing statement has been filed. Such a purchaser will only defeat a prior perfected security interest that was perfected through automatic perfection by attachment.
What does a Trustee have priority over?
trustee in bankruptcy does not have priority over a prior perfected security interest. A trustee would only have priority over unperfected security interests and security interests perfected subsequent to the filing of the bankruptcy petition
to who has a Lien creditor priority over?
Lien creditor would only have priority over an unperfected security interest or a security interest perfected after the attachment of the lien.
What is bylaws?
Bylaws are requirements adopted by the board of directors to guide management in performing its duties.
What is a certificate of authority
Certificate of authority is a certificate that must be obtained for the corporation to do business in another state.
