Regulation
Simulation Ver.3
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
Dennis J. Green, CPA, MBA
Liliana Hickman-Riggs, CPA, CITP, CMA, CIA, CFE, FCPA, 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
Angeline S. Brown, CPA, MAC
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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 .............................................................................................................................
1-18
6.
Sec.1231 and Recapture ................................................................................................................ 1-19
MULTIPLE-CHOICE QUESTIONS (1-5) ................................................................................................
1-21
SIMULATION Overview...........................................................................................................................
1-25
SIMULATION #1 Form 1040 前半 ......................................................................................................... 1-27
SIMULATION #2 Released 2007 ..........................................................................................................
1-47
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
TOPIC 3: GIFT AND ESTATE TAX
1.
Gift Tax ............................................................................................................................................
3-3
2.
Estate Tax .......................................................................................................................................
3-5
MULTIPLE-CHOICE QUESTIONS (1) ...................................................................................................
3-7
SIMULATION #5 Gift and Estate Tax ....................................................................................................
3-9
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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 #6 Form 1065 .................................................................................................................
4-15
SIMULATION #7 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 #8 (Form 1120) Schedule M-1 ..........................................................................................
5-17
SIMULATION #9 Released 2006 ..........................................................................................................
5-33
SIMULATION #10 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) ...............................................................................................
6-11
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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
MULTIPLE-CHOICE QUESTIONS (1-9) ...............................................................................................
7-13
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 ..................................................................................................
8-4
4.
UCC Statute of Frauds Exceptions ................................................................................................
8-5
5.
Rules for Risk of Loss (ROL) ..........................................................................................................
8-5
6.
Warranties ......................................................................................................................................
8-6
7.
Strict Liability in Tort .......................................................................................................................
8-7
8.
Performance ...................................................................................................................................
8-7
9.
Remedies of the Buyer Upon the Seller’s Breach ..........................................................................
8-7
10. Remedies of the Seller Upon the Buyer’s Breach ..........................................................................
8-7
MULTIPLE-CHOICE QUESTIONS (1-4) ...............................................................................................
8-9
MULTIPLE-CHOICE SOLUTIONS (1-4) ................................................................................................
8-11
Contracts and Sales of Goods SIMULATION ........................................................................................
8-13
TOPIC 9: NEGOTIABLE INSTRUMENTS
1.
Types of Commercial Paper: Notes, CDs, Drafts, and Checks ......................................................
9-3
2.
Requirements of Negotiability ........................................................................................................
9-3
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3.
Negotiation .....................................................................................................................................
9-4
4.
Holders in Due Course (HDC) ........................................................................................................
9-5
5.
Contractual Liability ........................................................................................................................
9-6
6.
Discharge From Liability .................................................................................................................
9-6
MULTIPLE-CHOICE QUESTIONS (1-3) ...............................................................................................
9-7
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
MULTIPLE-CHOICE QUESTIONS (1-3) ...............................................................................................
10-7
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
MULTIPLE-CHOICE QUESTIONS (1-4) ...............................................................................................
11-9
MULTIPLE-CHOICE SOLUTIONS (1-4) ................................................................................................ 11-11
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
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Regulation
4.
'33 Act Exemptions from Registration .............................................................................................
12-4
5.
'34 Act Registration Requirements .................................................................................................
12-5
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
MULTIPLE-CHOICE QUESTIONS (1-3) ...............................................................................................
13-7
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 ..................................................................................................
14-5
5.
Liability Under Sarbanes-Oxley Act of 2002 ...................................................................................
14-6
MULTIPLE-CHOICE QUESTIONS (1-4) ...............................................................................................
14-9
MULTIPLE-CHOICE SOLUTIONS (1-4) ................................................................................................ 14-11
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 ...................................
15-3
5.
Rule 301 Confidential Client Information ........................................................................................
15-4
6.
Rule 302 Contingent Fees .............................................................................................................. 15-4
7.
Rule 501 Acts Discreditable ............................................................................................................
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15-4
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Statements on Standards for Consulting Services .......................................................................... 15-4
MULTIPLE-CHOICE QUESTIONS (1-3) ...............................................................................................
15-5
MULTIPLE-CHOICE SOLUTIONS (1-3) ................................................................................................
15-7
TOPIC 16: ADDITIONAL TOPICS
1.
Insurance .......................................................................................................................................
16-3
2.
Agency ...........................................................................................................................................
16-5
3.
Employment Law ............................................................................................................................
16-9
4.
Suretyship ...................................................................................................................................... 16-13
MULTIPLE-CHOICE QUESTIONS (1-8) ............................................................................................... 16-15
MULTIPLE-CHOICE SOLUTIONS (1-8) ................................................................................................ 16-19
Agency SIMULATION ........................................................................................................................... 16-23
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