Becker CPA Review

Regulation Course Textbook and Lecture Errata/Clarifications

2014 Exam Edition
Date

1/13/14

Page and Item

Number

Errata/Clarifications

R1-15
Item C.
Realization and
Recognition

During the discussion of the concept of realization, the instructor uses the example
of a house going up in value during the year. This is actually an unrealized gain, not
a realized gain. The increase in the value of your house will not be realized until the
house is sold.

There are two errors in the calculation shown in this example. The corrections are
highlighted:

1/13/14

R2-5
Example

2013 AGI
Less
Excess over $56,000 $59,000
Divided by $10,000
Phase out percentage
Times maximum IRA deduction
Amount of IRA phased out
2013 maximum IRA deduction

$61,000
(59,000)
2,000
10,000
20%
x 5,500 (not 5,000)
(1,100)
$ 4,400

There is an error in the calculation of the total adjustments for AMT purposes:
1/13/14

1/13/14

R2-51
Example
(top of page)

R3-21
Lecture example
given by
instructor at the
bottom of the
page

State income taxes

Home equity interest

$9,200
3,000 (not 6,500)

Total

$12,200

During this lecture, the instructor gives an incorrect example of the application of the
general business credit, which he annotates in the inside margin at the bottom of the
page. The general business credit is correctly explained on pg. R2-41. Please use
that explanation and disregard the explanation and annotations on R3-21.

The last sentence on this page should be amended as follows (addition highlighted):
1/13/14

R4-59
Item B. Taxation

1/13/14

R4-71
Item D.1.a.
Medical
Expenses

A single member LLC not electing to be taxed as a corporation is considered a

disregarded entity for federal income tax purposes and will be treated as a sole
proprietorship.

This text should be modified as follows (change highlighted):

Alternatively, medical expenses (not funeral expenses, because they are not
deductible for income tax purposes) paid out of the estate may be deducted on the
final income tax return of the decedent (Form 1040), subject to the 7.5 10 percent
limitation.

Becker CPA Review

Regulation Course Textbook and Lecture Errata/Clarifications
2014 Exam Edition

1/13/14

R5-5
Item D.
Registration,
Obtaining a
PTIN, and
Minimum
Qualifications

IRS Tax Preparer Program

In 2011, the IRS began requiring all tax return preparers who prepare and file tax
returns for a fee to pass an exam, pay an annual fee and complete 15 hours of
continuing professional education. Attorneys, CPAs and Enrolled Agents were
exempt from this regulation. In January of 2013, a federal court overturned this
ruling and the IRS is appealing. For the time being, the tax return preparer program
is no longer required. If the situation changes, we will post additional information.

There is an error in this item, as well as an omission (correction and addition

highlighted):
1/13/14

R8-47
Item C.2.a

a. For 2013, employees were liable to make FICA contributions of 4.2 6.2 of their
gross wages of up to $113,700 and Medicare contributions of 1.45 percent of
their entire gross wages. Individuals with income exceeding a threshold amount
($200,000 single and $250,000 married filing jointly) are liable for an additional
Medicare tax of 0.9% of their entire gross wages.

There is an error in this item (correction highlighted):

1/13/14

R8-47
Item C.3.

1/13/14

R8-75
Pass Key

Self-employed individuals pay into FICA through the self-employment tax, which is
equal to the employers and employees contribution (13.3 15.3 percent). It is
imposed only on net profits and only if the net profits exceed $400 in a year.

The third bullet point in this Pass Key should read:

What are three warranties of transferees the transferor?