Wiley CPAexcel Exam Review 2021 Focus Notes: Regulation

Preface xi

Professional and Legal Responsibilities 1

Treasury Department Circular 230 1

Liability as a Tax Preparer 3

Regulation of Accountants 4

Accountants’ Liability 6

Liability under Common Law 6

Tax Preparer Penalties 9

Liability under Federal Securities Regulations 11

Contracts 12

Formation of Contracts 12

Writing and Records 16

Discharge of Performance 21

Passage of Title and Risk Loss 24

Types of Remedies and Formulas for Damage 27

Sales 30

Agency 33

Authority of Agents and Principals 33

Terminating Agent’s Authority 34

Liability 35

Debtor-Credit Relationships 37

Suretyship: Introduction, Creation, and Types 37

Rights of Sureties 38

Defenses of Sureties 39

Cosureties 40

Secured Transactions 41

Collateral 41

Security Agreement 42

Attachment and Perfection 43

Priorities among Claims 45

Default by Debtor 47

Bankruptcy 48

Voluntary Filing—Chapter 7 48

Involuntary Filing—Chapter 7 49

Business Reorganizations—Chapter 11 50

Repayment Plans—Chapter 13 52

Alternatives to Bankruptcy 53

Powers of Bankruptcy Trustee 54

Distribution of Assets 56

Denial of Discharge 60

Federal Securities Regulation 61

Securities Act of 1933 (’33 Act) 61

Exempt Transactions and Securities 63

Emerging Growth Companies 66

Securities Exchange Act of 1934 (’34 Act) 67

FICA and FUTA 74

Federal Insurance Contributions Act (FICA) 74

Selection and Formation of a Business Entity 77

Partnership Characteristics 77

Limited Liability Arrangements 84

Corporations 87

Promoters 90

Directors and Officers 91

Property Transactions 95

Realized Gain or Loss 95

Taxation of Gains and Losses 97

Related-Taxpayer Transactions 98

Special Transactions 99

Sec. 1245 Depreciation Recapture 101

Individual Taxation 102

Individual Income Tax 102

Gross Income 104

Interest 106

Taxation of Income from Business Entities 109

Personal and Dependency Exemptions 129

Filing Status 131

Alternative Minimum Tax (AMT) 133

Personal Tax Credits 137

Accounting Method 141

Depreciation 142

Estate and Gift Tax 146

Tax Due 152

Property Received by Inheritance or Gift 154

Taxation of Estates and Trusts 156

Trusts 157

Computing Taxable Income of Trusts and Estates 160

Corporate Taxation 163

Corporate Income Tax 163

Section 351 Transfer to Controlled Corporation 163

Computing Corporate Income Tax 165

Supplemental Tax Schedules 171

Accumulated Earnings Tax 173

Affiliated Corporation Transactions 174

Nonliquidating Distributions to Shareholders 175

Corporate Complete Liquidation 177

Corporate Reorganizations 178

Section 1244 Stock 179

S Corporations 180

Foreign Tax Credit 188

Family and Medical Leave Credit 188

Partnership Taxation 189

Formation of Partnerships 189

Taxation of Partnerships 193

Distributions 195

Sale of Partnership Interest 197

Termination 198

Index 199