Becker Professional Education | CPA Exam Review Regulation
REGULATION table of contents
Program attendance record ..............................................................................................................................................................
v
Introduction ................................................................................................................................................................................
Intro- 1
REGULATION 1: Individual Tax—Income
1. Individual taxation: Filing status .............................................................................................................................................
R1 - 7
2. Individual taxation: Exemptions ............................................................................................................................................
R1 - 10
3. Individual taxation: Gross income .........................................................................................................................................
R1 - 15
4. Employee stock options ........................................................................................................................................................
R1 - 47
5. Class questions .....................................................................................................................................................................
R1 - 51
REGULATION 2: Individual Tax—Adjustments, Deductions, and Credits
1. Adjustments and itemized deductions ...................................................................................................................................
R2 - 3
2. Tax calculations and credits ..................................................................................................................................................
R2 - 31
3. Individual taxation: Other taxes ............................................................................................................................................
R2 - 45
4. Individual taxation: Other items ...........................................................................................................................................
R2 - 53
5. Tax standards and research...................................................................................................................................................
R2 - 55
6. Class questions .....................................................................................................................................................................
R2 - 63
REGULATION 3: C and S Corporation Taxation and Exempt Organizations
1. C corporations.........................................................................................................................................................................
R3 - 3
2. Small business corporations (S corporations) .......................................................................................................................
R3 - 48
3. Exempt organizations ............................................................................................................................................................
R3 - 57
4. Multi-jurisdictional tax issues in federal taxation .................................................................................................................
R3 - 62
5. Other tax issues ....................................................................................................................................................................
R3 - 69
6. Class questions .....................................................................................................................................................................
R3 - 73
REGULATION 4: Property, Partnership, and Estate and Gift Taxation
1. Property taxation ....................................................................................................................................................................
R4 - 3
2. Partnership taxation .............................................................................................................................................................
R4 -40
3. LLC taxation ...........................................................................................................................................................................
R4 -59
4. Estate, trust, and gift taxation...............................................................................................................................................
R4 -61
5. Class questions .....................................................................................................................................................................
R4 - 83
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Regulation Becker Professional Education | CPA Exam Review
Regulation 5: Professional Responsibilities and Securities Regulation
1. Ethics and professional responsibilities in tax services ...........................................................................................................
R5 - 3
2. Sarbanes-Oxley Act of 2002 ..................................................................................................................................................
R5 - 21
3. Federal, legislative, and judicial processes; the IRS; and taxpayer penalties ........................................................................
R5 - 28
4. CPA legal liability ...................................................................................................................................................................
R5 - 39
5. Securities regulation .............................................................................................................................................................
R5 - 44
6. Class questions .....................................................................................................................................................................
R5 - 57
Regulation 6: Business Law 1
1. Contracts .................................................................................................................................................................................
R6 - 3
2. Sales ......................................................................................................................................................................................
R6 - 28
3. Copyrights and patents .........................................................................................................................................................
R6 - 42
4. Class questions .....................................................................................................................................................................
R6 - 47
Regulation 7: Business Law 2
1. Commercial paper ..................................................................................................................................................................
R7 - 3
2. Secured transactions ............................................................................................................................................................
R7 - 26
3. Bankruptcy ............................................................................................................................................................................
R7 - 41
4. Class questions .....................................................................................................................................................................
R7 - 63
Regulation 8: Business Law 3
1. Suretyship and creditors' rights ..............................................................................................................................................
R8 - 3
2. Agency ..................................................................................................................................................................................
R8 - 12
3. Business structures ...............................................................................................................................................................
R8 - 25
4. Employer-employee law .......................................................................................................................................................
R8 - 47
5. Money laundering ................................................................................................................................................................
R8 - 56
6. Antitrust law .........................................................................................................................................................................
R8 - 63
7. Documents of title ................................................................................................................................................................
R8 - 71
8. Dodd-Frank Act of 2010 ........................................................................................................................................................
R8 - 76
9. Class questions .....................................................................................................................................................................
R8 - 81
Class question explanations .........................................................................................................................................................
CQ- 1
Glossary ..................................................................................................................................................................................
Glossary- 1
Index ..........................................................................................................................................................................................
Index- 1 viii
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R
1
Individual Tax—Income
1. Individual taxation: Filing status ................................................................................................................................................. 7
2. Individual taxation: Exemptions ................................................................................................................................................ 10
3. Individual taxation: Gross income ............................................................................................................................................. 15
4. Employee stock options ............................................................................................................................................................ 47
5. Class questions ......................................................................................................................................................................... 51

Becker Professional Education | CPA Exam Review
I N D I V I D U A L T A X A T I O N
GROSS INCOME
< ADJUSTMENTS >
ADJUSTED GROSS INCOME
STANDARD DEDUCTION
OR
ITEMIZED DEDUCTIONS
< EXEMPTIONS >
TAXABLE INCOME
FEDERAL INCOME TAX
< TAX CREDITS >
OTHER TAXES
< PAYMENTS >
TAX DUE
OR
REFUND
Regulation 1
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Regulation 1 Becker Professional Education | CPA Exam Review
I N D I V I D U A L T A X A T I O N
GROSS INCOME
Wages
Interest
Dividends
State Tax Refunds
Alimony Received
Business Income
Capital Gain/Loss
IRA Income
Pension and Annuity
Rental Income/Loss
K-1 Income/Loss
Unemployment Compensation
Social Security Benefits
Other Income
< ADJUSTMENTS >
Educator Expenses
IRA
Student Loan Interest Expenses
Tuition & Fee Deduction
Health Savings Account
Moving Expenses
One-Half Self-Employment FICA
Self-Employed Health Insurance
Self-Employed Retirement
Interest Withdrawal Penalty
Alimony Paid
ADJUSTED GROSS INCOME
< ITEMIZED DEDUCTIONS >
Medical (in excess of 10% of AGI)
Taxes – State/Local (Income/Sales & Property)
Interest Expense (Home & Investment)
Charity (up to 50% of AGI)
Casualty/Theft (in excess of 10% of AGI)
Miscellaneous (in excess of 2% of AGI)
Other Miscellaneous
< EXEMPTIONS > 2013 $3,900 X
Taxpayer
Spouse
Dependents
TAXABLE INCOME
R1- 4
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Becker Professional Education | CPA Exam Review Regulation 1
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Regulation 1 Becker Professional Education | CPA Exam Review
R1- 6
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Becker Professional Education | CPA Exam Review Regulation 1
I N D I V I D U A L TA X AT I O N
F i l i n g S t a t u s
I. FILING
A. Requirement for Filing (who must file?)
1. General Rule
Generally, a taxpayer must file a return if his or her income is equal to or greater than the sum of: a. the personal exemption, plus b. the regular standard deduction (except for married filing separately), plus c. the additional standard deduction amount for taxpayers age 65 or over or blind
(except for married persons filing separately).
2. Exceptions
Certain individuals must file income tax returns even if their income is lower than the
"general rule" requirement.
a. Individuals whose net earnings from self-employment are $400 or more must file.
b. Individuals who can be claimed as dependents on another taxpayer's return, have unearned income, and gross income of $1,000 (2013) or more must file.
c. Individuals who receive advance payments of earned income credit must file.
B. When to File
1. Due Date— April 15
Individual taxpayers must file on or before the fifteenth day of the fourth month following the close of the taxpayer's taxable year, which is April 15.
2. Extension a. Automatic Six-Month Extension— October 15
An automatic six-month extension (until October 15) is available for those taxpayers who are unable to file on the April 15 due date. The automatic six-month extension is not an extension for the payment of any taxes owed. Although granted automatically, the six-month extension must be requested by the taxpayer by filing
Form 4868 by April 15th.
b. Payment of Tax
With either extension, the due date for payment of taxes remains April 15.
3. Taxpayers Who Are Out of the Country
Taxpayers who are outside of the United States on the filing date and have their principal place of business outside the United States or are stationed outside the United States have an automatic two-month extension to file, but not to pay. Such persons need not file for the extension, but must include documentation if the extension is taken. They can also request the other extensions under the same rules as for other taxpayers.
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