REG CPA

Charitable contributions on Ind. T/R:

Limited to 50% of AGI for L/T Cap Gain Property the limitation is 30%

Under the Statute of Frauds what 6 contracts MUST be in writing: MY LEGS

Marriage, Contracts that cant be performed with-in a YEAR, Land,Executors to pay estate debts out of personal funds, Sale of GOODS over $500, Contracts to act as a SURETY.

Life Ins. Prem on Key Employee:

NOT DEDUCTIBLE when directorly or indirectorly is bene

Organizational & Start-up expenses

Tax: 5000 expense maximum remainder amortized over 180 months GAAP- expensed when incurred

A GENERAL Warranty deed

The Grantor warrents against defects by himself and all prior title holders.

Order of Priority in Security Interest

The first to file or perfect has priority.

Refunds from IRS may be claimed (timeframe)

The later of 3 yrs from date of return or 2 yrs from date payed.

Exonaration by a surety

The surety to requrie the debtor to pay if he is able before surety pays.

Prefrential Transfer

The transfor of debtors property made fro the benefit of a creditor on account of an antecedent debt while the debtor was insolvent. 1 yr for an insider and 90 days for others.

3 types of IRREVOCABLE offers: UFO

Unilateral Contracts where performance has been commenced. Firm offers by merchants, Option Contractons where consideration has been paid to keep offer open.

The time period for IRS to assess additional tax is normally 3 yrs from the date the return is due except:

When 25% or more of gross income is omitted the timeframe extends to 6 yrs.

What debts are not discharged in bk? WAFTED

Willful injury, Alimony, Fraud, Taxes, Educational loans, Debts undisclosed in BK petioion

Is the DRD includable in calculating a NOL for a co?

YES. The DRD is allowed to be deducted before calculating the NOL.

Co Insurance

[FV of Policy / (co-ins. % x FMV of Property)] Loss

The general rule for CPA liability

a CPA is liabile to client, 3rd party bene's and forseeable class.

Novation

a New Contract substitutes a New Party.

In a race notice jurisdiction:

a subsequent bona fide purchaser for value is protected only if records before the prior grantee records AND has NO notice of the prior transfer.

NOL for Corps

carryback/forward= 2/20 No Charitable contribution deduction or DRD allowed before calculatiting a NOL

suing for NEGLIGENCE- MUST PROVE 4 THINGS: DBCI

dUTY OF CARE, BREACH (Lack of Due Care), CASUALITY AND INJURY

Punitive Damages

intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit. Although the purpose of punitive damages is not to compensate the plaintiff, the plaintiff will in fact receive all or some portion of the punitive damage award. Not available UCC.

Chapter 11

is for debt reorganization and is available to family farmers with regular income.

Majority Rule for CPA liability

liable to client, 3rd party beneficiaries and any forseeable class of 3rd parties.

The Minority Ultra Mares rule for CPA liability:

limits CPA liability to client and intended 3rd party beneficiarys

Chapter 7

provides for liquidation of a debtor's estate. n a liquidation proceeding, after the petition is filed, a trustee will be appointed and an automatic stay against creditor collection proceedings goes into effect.

Race

whoever records first, even w/ prior knowledg of prior conveyences to have greater rights.

Capital assets include:

· Investment prop. & prop held for personal use. ex: Personal auto, furniture and fixtures, stock and bonds,Real and personal property not used in business, Interest in a partnership,Goodwill of a corporation. · Purchased (as opposed to created) copyrights, literary, musical, or artistic compositions. · Musical compositions held by the original artist and sold after 5/17/06. · Other assets held for investment.

A PMSI creditor:

1) Sells the collateral to the debtor on credit & retains a secuirty interest. 2) Advances the funds used by debtor to buy the collateral. NOTE: Did debtor receive collateral w/ Creditors $ or via Credit? If yes then PMSI exists

The Accrual Method for tax purposes must be used for:

1) accounting for the purchase and sales of A/R & Inv. 2) Tax Shelters 3) Certain Farming 4) C-corps that have over $5M in avg. Gross receipts for last 3 yrs.

Who has priority when conflicts in collateral interest arise?

1) buyers in the ordinary course of business inventory 2) PMSI 3) The holder of a perfected secuiry interest in or a judicial lian that has attached to the collateral 4) The holder of an unperfected sec. interest 5) The debtor

What 3 elements must exist for a security agreement to ATTACH:

1. Be an AGREEMENT 2. Secured party must give value 3. Debtor must have rights in the Collateral.

Rule 504 under 1933:

1. Exempts issuance up to $1 million 2. General solicittion is ok 3. must be sold w/in 12 mnths 4. sold to any # of investors (seed capital) 5. resell is ok

Rule 505 under 1933:

1. Exempts issuances of up t

Rule 506 under 1933:

1. Private placement of unlimited dollar amount 2. 35 non-accredited sales to unlimited accredited

In distributing a BK estate- the order of claims:

1. Secured claims 2. BK expenses and Priority Claims 3. Remaining assets are split proportionaly among Unsecured creditors who have filed a claim.

Disclosure of taxpayer information to other is permissible under 3 ways:

1. computer processing 2. peer review process 3. Through an administrative order.

AMT exemption amount for Corps:

40,000 less 25% if AMTI in excess of $150,000

To be Negotiable within UCC 3 the instrument must (7)

Be in WRITING, SIGNED by the maker or drawer, Contain an UNCONDITIONAL PROMISE to pay, For a FIXED amount, Payable on DEMAND or at a definite time, Be payable to order or to bearer, Contain no additional instruction not authorized by the UCC.

The amount REALIZED on the sale of a PSHIP interest =

CASH received + % of liabilities assumed

Partnership basis and capital account- Basis=

Capital Account + Partners share of liabilities

Corp. Distributes Property as a Div: The treatement:

It is a gain as if the prop was sold. FMV- NBV = GAIN to E&P The gain increases E&P

Priority claimaints (9) SAG-WEG-CTI

Support obligations, Admin expenses, Gap creditors, Wages, Emp. Benefits, Grain Farmers, Consumers deposits, Consumer deposits 2,425, Taxes, Injury claims caused by DUI

Section 179

$250,000 reduced dollar for dollar on amts purchased in excess $800,000.

Tax Preferences

Always ADD BACK PPP Private activity bond interest income Percentage depletion the excess over adj. basis of property, pre- 1987 acceleateraed depreciation

For TAX purposes Amortized Goodwill is:

Amortized over 15 years

Capital Losses for corportations

Corps can only use to offset Cap gains. Carryback/over= 3/5 applied only to cap gains. carryback/forwards are always treated as a S/T Cap. LOSS

What will prevent a debtor from getting a d/c in bk? DRAWING

Discharge w/in 8 yrs, Records (failure 2 keep), Assets (failure to explain whereabouts), Willfuly conceeling assets, Indiv- not one, Not obeying ct. orders, Guilty of a bk crime.

DNI formula

Estate (TRust) GI-Expenses= Adj. Total Income + Tax Exempt income - Cap Gains= DNI Trusts deduct the lesser of the amt. distributed or DNI (the bene pays the tax).

Cash & Property bequeathed to an individual through a will or estat is valued at:

FMV & holding period is L/T

non-deductible taxes

Federal Income Taxes 2. Inheritance tax 3. Business Taxes (deductible on Sch. E)

Itemized deductions not limited to limitation: GIMIC

Gambling losses (to the extent of gambling winnings) 2. Investment Interest expense 3. Medical Expenses 4. Casualt Losses (non-business)

A negotioable bill of lading:

Is negotiable if goods are to be delivered to bearer or to a named party

Altertrnative Minimum Tax: Adjustments (+/-) PANIC TIME

Passive activity Losses, Acc. Dep., NOL's, Installment Income of a Dealer, Contracts (% complet vs. completed) Tax deductions, Mtg. Interest not used 4 house, Medical(limited to 10% of AGI) Misc. deductions are NOT allowed, Exemptions (personal) and standard deduction

Race Notice

Permits a subsequesnt Bona Fide Purcherser for value better rights than others if RECORDED First and NO NOTICE of prior grantees,

An HDC takes a negotiable instrument subject to which of the following (Real or Personal) defenses?

REAL only. FAIDS- Forgery, Fraud in the execution, Alteration, Adjudicated insanity, Infancy, Illegality, Duress, Discharge in BK, Sureyship, Statute of limitations has run (3 on drafts, 6 on Notes)

An Revocation of an Offer is effective when?

RECEIVED

Notice

Recording Statute that permits a subsequent bona fide purcherser to prevail over a prior grantee who failed to record.

Losses on sales/exchanges are not recognized for tax purposes with:

Related parties: Brothers, sisters, husband, wife and lineal decendents & entities that are more than 50% owned by indiv. trusts and pships and corps.

Distribution of the debtors estate:

Security claimitns, Priority claimants (9 categories), General creditors who filed a timely claim (Bottom of the Barrel)

4 exceptions to contracts that must be evidenced in writing SWAP

Specially mfg. goods, Writen confirmation of a contract by if no objection w/in reasonable time, Admission in court, Performance of work under the contract to the extent of performance.