Regulation
Simulation Ver.4
Final Review Notes
BECKER
C PA R E V I E W
Becker Professional Review CPA Course Development Team
Timothy F. Gearty, CPA, MBA, JD ........... Editor in Chief, FARE National Editor, Regulation (Tax) Editor
Lisa M. Thayer, CPA ................................................. Business Environment & Concepts National Editor
Tom Cox, CPA, CMA, CHFP ......................................................... FARE (GASB & NFP) National Editor
Steve Levin, BA, JD .............................................................................. Regulation (Law) National Editor
Peter Olinto, JD, CPA ........................................................................... Regulation (Law) National Editor
Cindy Lawrence, CPA, MBA .................................................................................... Audit National Editor
Richard A. Sykes ................................................................................. Director of Education Technology
Anson Miyashiro .................................................................................... Multimedia Production Manager
Al Glodan ........................................................................................... Audio / Video Production Manager
Jennifer Stewart ........................................................................................................ Publishing Manager
Travis V. Meyer ................................................................................................ System Support Manager
Contributing Editors
Eric J. Brunner, PhD
Robert A. DeFilippis, CPA, MBA
Mike Farrell, JD
Julie Ann Gardner-Treloar, CPA, MBA, MBT
Dennis Green, CPA
Liliana Hickman-Riggs, CPA, CITP, CMA, CIA, DABFA, MS
Edward McTague, CPA, MBA
Michael Meriwether, CPA, MBA
Mike Potenza, JD
Ray Rigoli, CPA, MBA
Karen Tarbet, CPA, JD
Jennifer B. Deutsch, CPA, MS
Chris Cocozza, CPA, JD, LLM
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Becker CPA Review
Regulation
REGULATION TABLE OF CONTENTS
TOPIC 1: INDIVIDUAL TAX 1
1.
Filing & Payment of Tax ...................................................................................................................
1-3
2.
Filing Status ...................................................................................................................................
1-4
3.
Exemptions ....................................................................................................................................
1-4
4.
Gross Income (including Transaction in Property) .........................................................................
1-6
5.
Tax Deprecation .............................................................................................................................
1-21
6.
Sec.1231 and Recapture ................................................................................................................
1-22
MULTIPLE-CHOICE QUESTIONS (1-5) ................................................................................................
1-23
SIMULATION Overview ..........................................................................................................................
1-27
SIMULATION #1 Form 1040 前半 .........................................................................................................
1-29
SIMULATION #2 Released 2007 ..........................................................................................................
1-49
TOPIC 2: INDIVIDUAL TAX 2
1.
Above The Line Deductions (Adjustments) .....................................................................................
2-3
2.
Below The Line Deductions – Standard Deductions or Itemized Deductions (Schedule A) ............
2-5
3.
Tax Calculations .............................................................................................................................
2-8
4.
Alternative Minimum Tax (AMT) .....................................................................................................
2-8
5.
Tax Credits .....................................................................................................................................
2-10
6.
Statute of Limitation .......................................................................................................................
2-10
MULTIPLE-CHOICE QUESTIONS (1-4) ................................................................................................
2-11
SIMULATION #3 Form 1040 後半 .........................................................................................................
2-15
SIMULATION #4 Released 2005 ..........................................................................................................
2-31
SIMULATION #5 Released 2009 ..........................................................................................................
2-47
TOPIC 3: GIFT AND ESTATE TAX
1.
Gift Tax ............................................................................................................................................
3-3
2.
Estate Tax .......................................................................................................................................
3-5
MULTIPLE-CHOICE QUESTIONS (1) ...................................................................................................
3-7
SIMULATION #6 Gift and Estate Tax ....................................................................................................
3-9
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Regulation
Becker CPA Review
TOPIC 4: PARTNERSHIP
1.
Formation .......................................................................................................................................
4-3
2.
Partner Basis Formula ....................................................................................................................
4-6
3.
Determining Partner's Share of Income, Credits & Deductions ......................................................
4-7
4.
Termination of Partnership .............................................................................................................
4-9
5.
Non-Liquidating Distributions .........................................................................................................
4-10
6.
Liquidating Distributions .................................................................................................................
4-11
MULTIPLE-CHOICE QUESTIONS (1-2) ................................................................................................
4-13
SIMULATION #7 Form 1065 .................................................................................................................
4-15
SIMULATION #8 Partnership ................................................................................................................
4-29
TOPIC 5: C CORPORATION
1.
Formation .......................................................................................................................................
5-3
2.
Taxation of a C Corporation ...........................................................................................................
5-6
3.
Corporate Distributions (Non-Liquidating Distribution) ...................................................................
5-12
4.
Corporate Liquidation (Liquidating Distribution) .............................................................................
5-14
MULTIPLE-CHOICE QUESTIONS (1-3) .................................................................................................
5-15
SIMULATION #9 (Form 1120) Schedule M-1 ..........................................................................................
5-17
SIMULATION #10 Released 2006 ........................................................................................................
5-33
SIMULATION #11 Released 2008 ........................................................................................................
5-43
TOPIC 6: OTHER ENTITIES
1.
S Corporation .................................................................................................................................
6-3
2.
Trust and Estate ..............................................................................................................................
6-6
3.
Tax Return Preparer Responsibility ...............................................................................................
6-8
MULTIPLE-CHOICE QUESTIONS (1-5) ...............................................................................................
6-13
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Becker CPA Review
Regulation
TOPIC 7: CONTRACTS
1.
Offers and Acceptances .................................................................................................................
7-3
2.
Consideration .................................................................................................................................
7-4
3.
Fraud ..............................................................................................................................................
7-5
4.
Mistake in Fact, Duress, and Undue Influence ...............................................................................
7-6
5.
Minors, Intoxicated Persons, and Insane Persons .........................................................................
7-7
6.
The Statute of Frauds .....................................................................................................................
7-7
7.
The Parol Evidence Rule ................................................................................................................
7-8
8.
Discharge of Contracts ...................................................................................................................
7-8
9.
Third-Party Beneficiary Contracts ...................................................................................................
7-9
10. Assignments and Delegations ........................................................................................................
7-10
11. Contract Remedies ........................................................................................................................
7-10
Contracts MULTIPLE-CHOICE QUESTIONS (1-9) ...............................................................................
7-13
Contracts MULTIPLE-CHOICE SOLUTIONS (1-9) ...............................................................................
7-17
TOPIC 8: UCC SALES
1.
Formation of a Sales Contract ........................................................................................................
8-3
2.
Merchant's Firm Offer Rule ............................................................................................................
8-4
3.
Duties of the Seller and the Buyer ..................................................................................................
8-5
4.
UCC Statute of Frauds Exceptions ................................................................................................
8-5
5.
Rules for Risk of Loss (ROL) ..........................................................................................................
8-5
6.
Warranties ......................................................................................................................................
8-7
7.
Strict Liability in Tort .......................................................................................................................
8-7
8.
Performance ...................................................................................................................................
8-8
9.
Remedies of the Buyer Upon the Seller’s Breach ..........................................................................
8-8
10. Remedies of the Seller Upon the Buyer’s Breach ..........................................................................
8-8
UCC Sales MULTIPLE-CHOICE QUESTIONS (1-4) ............................................................................
8-9
UCC Sales MULTIPLE-CHOICE SOLUTIONS (1-4) .............................................................................
8-11
Contracts and Sales of Goods SIMULATION ........................................................................................
8-13
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Regulation
Becker CPA Review
TOPIC 9: NEGOTIABLE INSTRUMENTS
1.
Types of Commercial Paper: Notes, CDs, Drafts, and Checks ......................................................
9-3
2.
Requirements of Negotiability ........................................................................................................
9-3
3.
Negotiation .....................................................................................................................................
9-4
4.
Holders in Due Course (HDC) ........................................................................................................
9-5
5.
Contractual Liability ........................................................................................................................
9-6
6.
Discharge From Liability .................................................................................................................
9-6
Negotiable Instruments MULTIPLE-CHOICE QUESTIONS (1-3) .........................................................
9-7
Negotiable Instruments MULTIPLE-CHOICE SOLUTIONS (1-3) ..........................................................
9-9
Negotiable Instruments SIMULATION ...................................................................................................
9-11
TOPIC 10: SECURED TRANSACTIONS
1.
3 Definitions ...................................................................................................................................
10-3
2.
3 Requirements for Attachment ......................................................................................................
10-3
3.
Perfection – 3 Ways to Perfect .......................................................................................................
10-3
4.
Secured Party vs. Purchaser from the Debtor ................................................................................
10-4
5.
Priority Rules ..................................................................................................................................
10-4
6.
Creditor's Rights Upon the Debtor's Default ...................................................................................
10-5
Secured Transactions MULTIPLE-CHOICE QUESTIONS (1-3) ...........................................................
10-7
Secured Transactions MULTIPLE-CHOICE SOLUTIONS (1-3) ............................................................
10-9
TOPIC 11: BANKRUPTCY
1.
Types of Bankruptcy .......................................................................................................................
11-3
2.
Steps required of the Debtor prior to Filing .....................................................................................
11-4
3.
Property Included in the Debtor’s Estate in Chapter 7 ...................................................................
11-5
4.
Preferential Transfers .....................................................................................................................
11-5
5.
Priority of Debts in a Chapter 7 Liquidation ....................................................................................
11-6
6.
Discharge of the Debtor in a Chapter 7 Liquidation ........................................................................
11-6
Bankruptcy MULTIPLE-CHOICE QUESTIONS (1-4) ............................................................................
11-9
Bankruptcy MULTIPLE-CHOICE SOLUTIONS (1-4) ............................................................................. 11-11
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Becker CPA Review
Regulation
TOPIC 12: FEDERAL SECURITIES ACTS
1.
Definition of Securities and SEC Powers .......................................................................................
12-3
2.
Liability Under '33 Act and '34 Act ..................................................................................................
12-3
3.
Purpose of '33 Act and Registration Requirements ........................................................................
12-4
4.
'33 Act Exemptions from Registration .............................................................................................
12-4
5.
'34 Act Registration Requirements .................................................................................................
12-6
6.
'34 Act Reporting Requirements .....................................................................................................
12-6
Federal Securities Acts MULTIPLE-CHOICE QUESTIONS (1-4) .........................................................
12-7
Federal Securities Acts MULTIPLE-CHOICE SOLUTIONS (1-4) ..........................................................
12-9
TOPIC 13: REAL PROPERTY
1.
Types of Property: Real Property and Personal Property ..............................................................
13-3
2.
Tenants in Common vs. Joint Tenants ............................................................................................
13-3
3.
Leases ............................................................................................................................................
13-3
4.
Deeds .............................................................................................................................................
13-4
5.
Recording of Deeds or Mortgages .................................................................................................
13-4
6.
Mortgages ......................................................................................................................................
13-5
7.
Purchase of the Mortgaged Property .............................................................................................
13-5
Real Property MULTIPLE-CHOICE QUESTIONS (1-3) ........................................................................
13-7
Real Property MULTIPLE-CHOICE SOLUTIONS (1-3) .........................................................................
13-9
TOPIC 14: CPA LEGAL LIABILITY
1.
Liability for Negligence ...................................................................................................................
14-3
2.
Liability for Fraud ............................................................................................................................
14-3
3.
Confidential Client Information .......................................................................................................
14-4
4.
Liability Under ’33 Act and ’34 Act ..................................................................................................
14-6
5.
Liability Under Sarbanes-Oxley Act of 2002 ...................................................................................
14-7
CPA Legal Liability MULTIPLE-CHOICE QUESTIONS (1-4) ................................................................
14-9
CPA Legal Liability MULTIPLE-CHOICE SOLUTIONS (1-4) ................................................................. 14-11
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Regulation
Becker CPA Review
TOPIC 15: CPA ETHICAL LIABILITY
1.
Rule 101 Independence .................................................................................................................
15-3
2.
Rule 102 Integrity and Objectivity ...................................................................................................
15-3
3.
Rule 201 General Standards ..........................................................................................................
15-3
4.
Rule 202 Compliance With Standards and Rule 203 Accounting Principles ...................................
15-4
5.
Rule 301 Confidential Client Information ........................................................................................
15-4
6.
Rule 302 Contingent Fees ..............................................................................................................
15-4
7.
Rule 501 Acts Discreditable ...........................................................................................................
15-4
8.
Statements on Standards for Consulting Services ..........................................................................
15-4
CPA Ethical Liability MULTIPLE-CHOICE QUESTIONS (1-3) ..............................................................
15-7
CPA Ethical Liability MULTIPLE-CHOICE SOLUTIONS (1-3) ...............................................................
15-9
TOPIC 16: ADDITIONAL TOPICS
1.
Insurance .......................................................................................................................................
16-3
2.
Agency ...........................................................................................................................................
16-5
3.
Employment Law ............................................................................................................................
16-9
4.
Suretyship ...................................................................................................................................... 16-13
Additional Topics-Insurance, Agency, Employment Law, Suretyship
MULTIPLE-CHOICE QUESTIONS (1-8) ............................................................................................... 16-15
Additional Topics-Insurance, Agency, Employment Law, Suretyship
MULTIPLE-CHOICE SOLUTIONS (1-8) ................................................................................................ 16-19
Agency SIMULATION ........................................................................................................................... 16-23
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