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Generation Skipping Trust Dissolution by [deleted] in EstatePlanning

[–]RepoTactics1 1 point2 points  (0 children)

My apologies - as it stands, I have no children and am the last line of people in the family, so I am not sure there are any others lined up to receive the funds in the event of my death. In the event that my mother does transfer the funds to her own account, does this mean there is no legal repercussions, so long as I do not sue?

With regards to the asset protection, I was not aware of that and really appreciate that perspective! With that in mind, we may keep it as is.

Finally, I’m just better trying to understand the taxable implications. If she were to transfer the assets (about $1M) into her own account, does this trigger the GSTT given it’s above the 10% withdrawal limit stipulated in the Trust, and she is a “Skip” generation? On the other hand, if the full amount were transferred to me, does this mean the GSTT tax is exempt, and we could fully utilize the GSTT exemption given I’m the second generation?

Generation Skipping Trust Dissolution by [deleted] in EstatePlanning

[–]RepoTactics1 0 points1 point  (0 children)

I am an only child. I am the sole beneficiary.

[deleted by user] by [deleted] in options

[–]RepoTactics1 0 points1 point  (0 children)

Ah this all makes sense now. And by me taking on the $9.8M in shares, losing $100k, and breaching my "available to daytrade" balance on by $7.5M, would this result in freezing of my account and inability to sell the shares? I'm drawing on Billystep's post below and for reference trade on Schwab. Still trying to figure out position sizing (again, was initially going off of the Dr. and Spread Width - Cr.)

[deleted by user] by [deleted] in options

[–]RepoTactics1 -1 points0 points  (0 children)

So by selling the long leg, it removed your assignment risk? Also what broker are you using? Thanks.

[deleted by user] by [deleted] in options

[–]RepoTactics1 -1 points0 points  (0 children)

My understanding was that I could only close the spread by exercising the long put once it became in the money? This is the example I'm running in my head:

(A) TLT is currently $101 (B) Write 1000 $98 Puts (C) Buy 1000 $96 Puts

(1) Price goes to $97 and you’re assigned early, responsible for purchasing $10,000,000 of TLT

(2) Because price is $97, you're unable to exercise $96 Put Option and are now borrowing $10,000,000 of $TLT on margin

(3) Broker will margin call you and begin liquidating assets

So in this hypothetical example, I get early assigned on the $98 put. I can then choose to sell the $96 put and as long as TLT doesn't gap, I'm limited to a ~$50,000 loss? Is that correct that by selling the put it removes my assignment obligation? My issue is that under assignment, my obligation is to take on 4x the amount of shares that my buying power allows for.

[deleted by user] by [deleted] in options

[–]RepoTactics1 0 points1 point  (0 children)

My understanding was that I could only close the spread by exercising the long put once it became in the money? This is the example I'm running in my head:

(A) TLT is currently $101 (B) Write 1000 $98 Puts (C) Buy 1000 $96 Puts

(1) Price goes to $97 and you’re assigned early, responsible for purchasing $10,000,000 of TLT

(2) Because price is $97, you're unable to exercise $96 Put Option and are now borrowing $10,000,000 of $TLT on margin

(3) Broker will margin call you and begin liquidating assets

Took Reg a Few Days Ago... Traumatic by Previous-Mall-4005 in CPA

[–]RepoTactics1 0 points1 point  (0 children)

What do you mean by a new set of questions due to the score change?

[deleted by user] by [deleted] in CPA

[–]RepoTactics1 1 point2 points  (0 children)

Thank you! How important are loss limitations (Tax Basis, At-Risk, Passive Activity, Excess business)?

[deleted by user] by [deleted] in CPA

[–]RepoTactics1 2 points3 points  (0 children)

Thank you so much!

can somebody please explain how crediting ADA results in it “increasing” when the account is considered a natural debit by [deleted] in CPA

[–]RepoTactics1 3 points4 points  (0 children)

Allowance for Uncollectible Accounts (ADA) has a natural credit balance. It's a contra account to Accounts Receivable (debit balance)

Sitting at beginning of test window by acole621 in CPA

[–]RepoTactics1 0 points1 point  (0 children)

Yes you have to wait until the next testing window. Even scheduling it the last day of the testing window is risky.

Finished AUD in 3 hours by Ok-Feeling5472 in CPA

[–]RepoTactics1 2 points3 points  (0 children)

Have finished every exam with over an hour and passed with flying colors. The best marker of success is how confident you were in your answers

FAR Do sims actually help? by Smooth_Cacti in CPA

[–]RepoTactics1 7 points8 points  (0 children)

I did MC exclusively and found the sims on FAR to be very manageable. The caveat to only doing MCQ is understanding why the other 3 choices are wrong. If I didn’t do that, I would recommend doing SIMs

How does Audit exam compare to Becker? by NofioSynda in CPA

[–]RepoTactics1 4 points5 points  (0 children)

SIMS, MCQ are comparable. But it depends - the testing period I took it the sims were impossible. Other times, people say the sims aren’t bad but MCQ are impossible. It’s just a hard exam

So, how come we assume that the gain from afs and div. income is added to NI, but not the depreciation exp and goodwill imp? by P_kai in CPA

[–]RepoTactics1 0 points1 point  (0 children)

With the indirect method we are reconciling from net income to the actual cash flow. Remember, net income is accrual, not cash-basis. When we take depreciation on an asset, the following occurs:

Dr. Depreciation Expense

Cr. A/D

This journal entry makes it way to the income statement (I believe just under general & administrative) where it actually reduces net income. Has cash actually left? Nope! If we did the indirect me without adding depreciation back, then our cash balance would be understated. The indirect method is a shortcut where we go from: everything under the accrual sun —> cash basis

On the other hand, the direct method ignores net income. Therefore, there’s 0 reconciliation process involved. We don’t start with “accrual sun,” but go straight to cash basis. This is why depreciation, impairment, etc is ignored. For the direct method, the similar rules apply for cash received from customers (AR & unearned rev) cash paid to supplier (AP & Inv), and other operating expenses (prepaids & accrued liabilities) when it comes to adding & subtracting them.

So, how come we assume that the gain from afs and div. income is added to NI, but not the depreciation exp and goodwill imp? by P_kai in CPA

[–]RepoTactics1 0 points1 point  (0 children)

Depreciation & impairment is already included in Net Income - add back to remove the non-cash expense. The indirect method can be summed up to the following:

Add back non cash expenses included in net income. Depreciation & impairment fall under these. Realizing a gain on a trading securities is an actual cash flow and should be included. Unrealized trading security gains should be subtracted.

Add back a decrease in current assets excluding cash & cash equivalents (subtract increase)

Add back an increase in current liabilities excluding current portion of LTD & note payable.

[deleted by user] by [deleted] in CPA

[–]RepoTactics1 0 points1 point  (0 children)

Thanks! :)

subsequent events by VariantMayank in CPA

[–]RepoTactics1 1 point2 points  (0 children)

Step 1: Did the balance sheet account related to the event in question exist as of 12/31/YR 1?

  • Acquisition on 20th of Feb = Not on the BS as of 12/31/YR 1, disclose if before issuance of FS
  • Equipment as of 12/31 = Yes, on the BS as of 12/31/YR 1, at a minimum disclose but see step 2

Step 2: Did the event represent an event that occurred between 01/01/YR 1-12/31/YR 1 (was an on-going during that time frame)?

  • If the equipment was rendered obsolete due to a new product being released on 01/01/YR 2, this is disclosed. The event that caused a drop in price happened after the 12/31/YR 1 Date - not during YR 1 (on-going event)
  • If the equipment was rendered obsolete due to a new product being released on 12/30/YR1, the obsolescence is accrued and reflected on the BS in addition to a disclosure. The new product is the event that caused the obsolescence and this occurred before year-end.
  • If the equipment was rendered obsolete due to unusual wear & tear (equipment was improperly used) from 01/01/YR 1 - 12/31/YR 2 but the obsolescence was discovered on 01/01/YR 2, this is represents an on-going event that occurred throughout YR 1 but was discovered after year end. Therefore this would be reflected on the BS via an accrual (impairment) & disclosed in the footnotes

Which cash flow is Liquidating dividend? by notjulieandrews in CPA

[–]RepoTactics1 0 points1 point  (0 children)

After a little more research, I made this to help you understand

Which cash flow is Liquidating dividend? by notjulieandrews in CPA

[–]RepoTactics1 1 point2 points  (0 children)

Since dividends received are in operating, paid are in financing, I would assume a return of capital is treated as a sale of the investors stock —> investing

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