REG 7 Flashcards
A private action under the 1934 Act is similar to a common-law fraud action in that the plaintiff must show that he relied on the misstatement and that the defendant intended to deceive in making the misstatement.
But, unlike a common-law fraud action, there is no requirement of privity, or even that the plaintiff was an intended user of the false statement.
A private action under the 1934 Act is similar to a common-law fraud action in that the plaintiff must show that he relied on the misstatement and that the defendant intended to deceive in making the misstatement.
But, unlike a common-law fraud action, there is no requirement of privity, or even that the plaintiff was an intended user of the false statement.
Oral agency agreements are generally valid, unless the agent’s activities are covered by certain parts of the Statute of Frauds. When an interest in real property is transferred, the Statute of Frauds requires a writing.
Oral agency agreements are generally valid, unless the agent’s activities are covered by certain parts of the Statute of Frauds. When an interest in real property is transferred, the Statute of Frauds requires a writing.
Filing a financing statement is a step for perfection, not for attachment.
Filing a financing statement is a step for perfection, not for attachment.
When a corporation distributes property to a shareholder in a nonliquidating distribution, gains are recognized to the corporation, but not losses. A $50,000 gain is recognized for the land ($100,000 – $50,000) and a $25,000 gain for the patent ($25,000 – 0) for a total gain of $75,000. The loss on the building is not recognized.
When a corporation distributes property to a shareholder in a nonliquidating distribution, gains are recognized to the corporation, but not losses. A $50,000 gain is recognized for the land ($100,000 – $50,000) and a $25,000 gain for the patent ($25,000 – 0) for a total gain of $75,000. The loss on the building is not recognized.
Worthless securities generally receive capital loss treatment. However, if the loss is incurred by a corporation on its investment in an affiliated corporation (80% or more ownership), the loss is generally treated as an ordinary loss.
Worthless securities generally receive capital loss treatment. However, if the loss is incurred by a corporation on its investment in an affiliated corporation (80% or more ownership), the loss is generally treated as an ordinary loss.
A 2018 NOL generally represents a loss from the conduct of a trade or business and can be carried forward indefinitely to offset income in the carryforward years. Since a NOL generally represents a business loss, an individual taxpayer’s excess of nonbusiness deductions over nonbusiness income cannot be subtracted in computing the NOL. Nonbusiness deductions generally include itemized deductions as well as the standard deduction if the taxpayer does not itemize. In this case, the $12,000 standard deduction offsets the $1,700 of nonbusiness income received in the form of dividends and short-term capital gain, but the excess ($10,300) cannot be included in the NOL computation. Thus the taxpayer’s NOL simply consists of the $10,000 business loss. The taxable loss is ($20,300). When the excess of standard deduction over investment income ($12,000 − $1,700 = $10,300) is added back to the loss, this gives the NOL of ($10,000).
A 2018 NOL generally represents a loss from the conduct of a trade or business and can be carried forward indefinitely to offset income in the carryforward years. Since a NOL generally represents a business loss, an individual taxpayer’s excess of nonbusiness deductions over nonbusiness income cannot be subtracted in computing the NOL. Nonbusiness deductions generally include itemized deductions as well as the standard deduction if the taxpayer does not itemize. In this case, the $12,000 standard deduction offsets the $1,700 of nonbusiness income received in the form of dividends and short-term capital gain, but the excess ($10,300) cannot be included in the NOL computation. Thus the taxpayer’s NOL simply consists of the $10,000 business loss. The taxable loss is ($20,300). When the excess of standard deduction over investment income ($12,000 − $1,700 = $10,300) is added back to the loss, this gives the NOL of ($10,000).
The Articles of Incorporation are filed with the state and contain the names of the corporation, registered agent, and incorporators. This document also contains the purpose and powers of the corporation as well as a description of the types of stock and number of authorized shares.
The Articles of Incorporation are filed with the state and contain the names of the corporation, registered agent, and incorporators. This document also contains the purpose and powers of the corporation as well as a description of the types of stock and number of authorized shares.
Intent can be established in one of two ways: A plaintiff may show that the defendant actually knew of the misrepresentation, OR may prove that the defendant acted recklessly. Both amount to intent and may be used to prove that element of a fraud action.
Intent can be established in one of two ways: A plaintiff may show that the defendant actually knew of the misrepresentation, OR may prove that the defendant acted recklessly. Both amount to intent and may be used to prove that element of a fraud action.
Under the UCC Statute of Frauds, a written agreement for the sale of goods is adequate if it indicates a contract for the sale of goods has been made between parties and is signed by the party to be charged. The written agreement may omit material terms (i.e., price, delivery, time for performance) as long as the quantity is stated. Reasonable terms will be inferred for those terms which are missing from the written agreement.
Under the UCC Statute of Frauds, a written agreement for the sale of goods is adequate if it indicates a contract for the sale of goods has been made between parties and is signed by the party to be charged. The written agreement may omit material terms (i.e., price, delivery, time for performance) as long as the quantity is stated. Reasonable terms will be inferred for those terms which are missing from the written agreement.
Generally, an S election will be effective as of the first day of a taxable year if the election is made on or before the 15th day of the third month of the taxable year
Generally, an S election will be effective as of the first day of a taxable year if the election is made on or before the 15th day of the third month of the taxable year
Which of the following conditions must be satisfied for a taxpayer to expense, in the year of purchase, under Internal Revenue Code Section 179, the cost of new or used tangible depreciable personal property?
For 2018, a taxpayer may elect to expense up to $1,000,000 of the cost of new or used tangible depreciable personal property placed in service during the taxable year. To qualify, the property must be acquired by purchase from an unrelated party for use in the taxpayer’s active trade or business. The maximum cost that can be expensed of $1,000,000 is reduced dollar for dollar by the cost of qualifying property that is placed in service during the year that exceeds $2,500,000. Additionally, the amount that can be expensed is further limited to the aggregate taxable income derived from the active conduct of any trade or business of the taxpayer.
Which of the following conditions must be satisfied for a taxpayer to expense, in the year of purchase, under Internal Revenue Code Section 179, the cost of new or used tangible depreciable personal property?
For 2018, a taxpayer may elect to expense up to $1,000,000 of the cost of new or used tangible depreciable personal property placed in service during the taxable year. To qualify, the property must be acquired by purchase from an unrelated party for use in the taxpayer’s active trade or business. The maximum cost that can be expensed of $1,000,000 is reduced dollar for dollar by the cost of qualifying property that is placed in service during the year that exceeds $2,500,000. Additionally, the amount that can be expensed is further limited to the aggregate taxable income derived from the active conduct of any trade or business of the taxpayer.
Losses from the sale of personal use assets are not deductible, so the $11,000 loss is not recognized. The $9,000 loss on the municipal bonds is a short-term capital loss, and the $4,000 loss on the painting is a long-term capital loss. The $5,000 long-term capital gain is reduced to zero by the $4,000 long-term capital loss and $1,000 of the short-term capital loss. Of the remaining $8,000 capital loss, $3,000 is deductible in the current year, and the remaining $5,000 is carried forward. This response incorrectly deducts the $11,000 loss from the sale of the residence.
Losses from the sale of personal use assets are not deductible, so the $11,000 loss is not recognized. The $9,000 loss on the municipal bonds is a short-term capital loss, and the $4,000 loss on the painting is a long-term capital loss. The $5,000 long-term capital gain is reduced to zero by the $4,000 long-term capital loss and $1,000 of the short-term capital loss. Of the remaining $8,000 capital loss, $3,000 is deductible in the current year, and the remaining $5,000 is carried forward. This response incorrectly deducts the $11,000 loss from the sale of the residence.
When performing an involuntary conversion of realty, such as a condemnation, the gain realized from payment from the government to settle the debt, is then subtracted from the purchase price of the replacement property.
Example (from AICPA) - owned property with a basis of $63K. Government pays you $71,800, which is a gain of $8,800. You then buy a replacement property for $72,563. The property should be recorded at a price of $63,763 ($72,563 less the $8,800 equals $63,763)
When performing an involuntary conversion of realty, such as a condemnation, the gain realized from payment from the government to settle the debt, is then subtracted from the purchase price of the replacement property.
Example (from AICPA) - owned property with a basis of $63K. Government pays you $71,800, which is a gain of $8,800. You then buy a replacement property for $72,563. The property should be recorded at a price of $63,763 ($72,563 less the $8,800 equals $63,763)
A partner’s initial basis in a partnership is equal to the amount of cash that the partner contributed plus the partner’s adjusted basis for property when contributed. If the partnership assumes indebtedness from the contributed property, the contributing partner’s basis is reduced by the amount of indebtedness assumed by the other partners.
A partner’s initial basis in a partnership is equal to the amount of cash that the partner contributed plus the partner’s adjusted basis for property when contributed. If the partnership assumes indebtedness from the contributed property, the contributing partner’s basis is reduced by the amount of indebtedness assumed by the other partners.
Generally, if a corporation receives dividends from another corporation, it is entitled to a deduction of 50 percent of the dividend it receives.[3] If the corporation receiving the dividend owns 20 percent or more, then the amount of the deduction increases to 65 percent.[4] If, on the other hand, the corporation receiving the dividend owns more than 80 percent of the distributing corporation, it is allowed to deduct 100 percent of the dividend it receives.[5]
Generally, if a corporation receives dividends from another corporation, it is entitled to a deduction of 50 percent of the dividend it receives.[3] If the corporation receiving the dividend owns 20 percent or more, then the amount of the deduction increases to 65 percent.[4] If, on the other hand, the corporation receiving the dividend owns more than 80 percent of the distributing corporation, it is allowed to deduct 100 percent of the dividend it receives.[5]
