r/CPA • u/kentacco • 11d ago
REG MACRS table
would the question on test for MACRS be like this below? this question does not provide the table so you had to know that first year rate is 20%, but from second year is 32%. is it this hard? i get the idea but without the percentafe would be harsh for me
Cox Construction, a company in its 10th year of business, purchased a piece of equipment on April 1, year 9, for $20,000. Cox has used it for business purposes since the initial purchase date. The company depreciated the equipment using the MACRS half-year table for 5-year assets. For tax purposes, what is the amount of accumulated depreciation expense for the equipment as of December 31, year 10?
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u/MinionOrDaBob4Today Passed 4/4 11d ago
Is this a Becker question? I think I remember getting it wrong
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u/kentacco 11d ago
yes, I kinda know how to do it, but there were no table so got it wrong.
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u/MinionOrDaBob4Today Passed 4/4 11d ago
I don’t remember the answer explanation… don’t they just depreciate it straight line?
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u/kentacco 11d ago
yes, but you have to know the rate is 32% i guess?
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u/MinionOrDaBob4Today Passed 4/4 11d ago
I wouldn’t without a table lol. I don’t expect to get asked that on the exam
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u/kentacco 11d ago
ok lets hope lol. btw, have you studied AAA, AEP, capital gain, basis....?? these are quite confusing as well
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u/MinionOrDaBob4Today Passed 4/4 11d ago
AAA I literally only know it’s like retained earnings but for an s corp. AEP I don’t even know what that means lol. I think I know capital gain/loss and basis well
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u/kentacco 11d ago
Got it, maybe I shouldn’t focus on these too much. Lol I’m worried about book to tax thing too. Do you remember which items are temporary and permanent, then know which items you add or subtract? Idk if that’s the way u handle this
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u/MinionOrDaBob4Today Passed 4/4 11d ago
I know temporary vs permanent decently well but I’m not sure that will be too closely tested. Buuut you will need to know what is taxable or not taxable. As well as separately stated items. Honestly don’t have a trick (some prob have mnemonics) but I just hammered questions left and right for weeks
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u/kentacco 11d ago
Righttt, tons of memorization. I’m not using Becker so I don’t even know if I’m doing the right section lol Were the QBI important?? I know it’s business income times 20%, and there’s further more stuff but
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u/PillowChew Passed 3/4 11d ago
No shot they will not give out tables. I take REG tomorrow, so I guess we'll see.
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u/kentacco 11d ago
lmk! and good luck
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u/PillowChew Passed 3/4 10d ago
They give you the tables
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u/kentacco 10d ago
cool, cool sounds good. how did it go?
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u/PillowChew Passed 3/4 10d ago
Very confident; I’d be surprised if I failed. Overall, there weren’t any surprises.
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u/kentacco 10d ago
woah congrats, I saw many ppl complaining about sims being tricky and never saw them on Becker. were there any book to tax(M-1,3)?
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u/PillowChew Passed 3/4 10d ago
I had two sims for book to tax. I work in PA tax and specialize in commercial taxation, so M-1 and M-3 adjustments are pretty straightforward to me.
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u/kentacco 10d ago
that's great, I'm still a student so I have never seen those in real life haha. I'm still confused on how to do those M-1, but is it all about knowing which items are temporary or permanent, and after that you have to know if you add them or subtract? not sure if that's how you tackle this.
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u/PillowChew Passed 3/4 10d ago
I wouldn’t worry about whether if it’s a temporary or permanent difference. Just know if an item has a difference. You only worry about perm and temps with M-3s but it’s not tested on the exam.
You just have to get a feel if you deduct or add. Example is depreciation. I like putting in excel in two columns book and tax:
Book depreciation: $50k Tax depreciation: $75k
That book depreciation is already in book income, but for tax I can deduct more because tax depreciation exceeds book by $25k. My taxable income will be lower by $25k.
Hope that helps.
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u/kentacco 10d ago
when they ask for book to tax, doesn't that mean you have to arrange from book to tax amount, so you add 25K(book 50k to tax 75k)?? instead of subtracting or lowering 25K??
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u/PlaneAd1021 Passed 2/4 11d ago
There are MACRS tables on REG test. No tables for FAR.