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REG Mnemonics Study Exam Questions & Answers 2024/2025

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REG Mnemonics Study Exam Questions & Answers 2024/2025 CPA Exam - REG - Becker Review - ANSWERSR1 - Individual Tax: Income R2 - Individual Tax: Adjustments, Deductions, Credits R3 - C Corps., S Corps., Exempt Orgs., Other R4 - Property, Partnership, Estate & Gift Tax R5 - Professional Resp...

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  • August 13, 2024
  • 39
  • 2024/2025
  • Exam (elaborations)
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  • REG Mnemonics
  • REG Mnemonics
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REG Mnemonics Study Exam Questions
& Answers 2024/2025

CPA Exam - REG - Becker Review - ANSWERSR1 - Individual Tax: Income

R2 - Individual Tax: Adjustments, Deductions, Credits

R3 - C Corps., S Corps., Exempt Orgs., Other

R4 - Property, Partnership, Estate & Gift Tax

R5 - Professional Responsibilites and Securities Regulation

R6 - Contracts, Sales, Copyrights/Patents

R7 - Commercial Paper, Secured Transactions (Debtor-Creditor), Bankruptcy

R8 - Surety, Agency, Business Structures, Employer-Employee, Money Laundering, Antitrust, Docs. of
Title, Dodd-Frank Act



Dependency Exemptions - Qualifying Child or Qualifying Relative - ANSWERSQualifying Child: CARES

C - Close

A - Age

R - Residency

E - Eliminate (gross income)

S - Support



Qualifying Relative: SUPORT

S - Support

U - Under (gross income)

P - Precludes (joint)

O - Only (citizens)

R - Relative, or

T - Taxpayer lives with for whole year.

,Qualifying child has residency requirement (more than half).



Close Relative includes: child, stepchild, sibling, stepsibling, or nieces/nephews.



Age Test: UNDER 19 or under 24 if full-time (5 mo.) student, unless totally/permanently disabled.



Gross income test does not include:

1. Social Security

2. Tax-exempt interest

3. Tax-exempt scholarships



Qualifying Widower (aka Surviving Spouse) and Head of Household - ANSWERSQualifying Widower (aka
Surviving Spouse)

1. Two years after year spouse died, did not remarry

2. Dependent entitled to exemption

3. Dependent lived there for ENTIRE year



Head of Household

1. Not married, but maintains household (over half support), where Dependent lives for more than HALF
the tax year.

2. Exception: Dependent parent does not have to live there, as long as household maintained.



Married Filing Separately - ANSWERSYou may only claim an exemption for spouse if:

1. Spouse has no gross income

2. Was not claimed as dependent by anyone else



Nontaxable Fringe Benefits - ANSWERSTax-Free Fringe Benefits, not included on 1040:

1. Life Insurance Proceeds

2. Health Insurance Premiums

,3. De Minimus

4. Meals and Lodging

5. Employer payment of Educational Expenses

6. Qualified Tuition Reductions

7. Qualified Employee Discounts

8. Contributions to Benefit/Retirement Plans (taxed when benefit received)

9. FSA's



Kiddie Tax on unearned interest income - ANSWERS$0 - Standard Deduction amt. - 0% tax rate

Next $1,050 - Taxed at lower child's rate

Amount above is taxed at Parent's higher tax rate



Social Security INCLUDED - ANSWERSLesser of 50% or 85% of Social Security OR provisional income
amount above threshold (% and threshold levels vary with provisional income);



Where MAGI = AGI + Tax-Exempt Interest + Social Security



So basically 50% or 85% of it is included, or it could be less, based on provisional income and threshold.



R1 - Series EE Bonds - ANSWERSTax-Exempt Interest when:

1. Used to pay for higher education

2. Sole or joint (spouse) owner

3. Over age 24

4. After 1989



R1 - Unemployment Compensation - ANSWERSINCLUDED "comes from the government - include"



Note: Worker's Comp. is EXCLUDED

"comes from the employer - exclude"

, R1 - Traditional IRA Distributions are included - ANSWERS59 1/2

70 1/2



10% Penalty Tax



Exceptions: HIM DEAD

H - Home ($10,000)

I - Insurance

M - Medical

D - Disability

E - Education

And

D - Death



R1 - Business Income on Schedule C - ANSWERSNondeductible Expenses:

1. Salaries paid to sole proprietor - Considered a draw.

2. State and local tax expense

3. Health Insurance of sole proprietor

4. Charitable contributions of sole proprietorship

5. Personal interest expense of sole proprietorship

6. Self-Employment Payroll Taxes (can deduct half on 1040)



R1 - Rental Income goes on Schedule E (Passive Activity) - ANSWERSVacation/Rental Homes



15 Day Threshold



R1 - Passive Losses Exceptions - Rental Activities - ANSWERSDeduct losses from certain rental activities:

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