Treatment of gains and losses under 1231, 1245, 1250, and casualty

I’m studying for the CPA exam. I hope to take REG before the testing window closes for the third quarter on Sept. 10.

I really enjoy making tables and diagrams. They make things easier for me to remember and understand. I am a visual learner with a tad bit of photographic memory. If I can see something, see how the parts fit together, I stand a dramatically better chance of remembering it later.

So while I’m going through the CPA review materials, I am taking a ridiculous amount of notes. If I can, I construct a table or diagram out of the information. You’d think that the materials would already have this… but for whatever reason, my experience of typical accounting information from a book is that it is presented as dryly and with as many words as possible lol. I have dubbed this phenomenon the Wall of Words. You’ve got to scale it if you want to understand what is being said.

Here is a table I made to help me remember the treatment for gains and losses under certain sections. The sections are 1231, 1245, 1250, and casualty is there too. These are all greater than one year, so there is nothing short term here. Besides, short term gains and losses under these sections is ordinary.

gains and losses under various sections

Isn’t that way better than the Wall of Words?

Because of the Trump tax law changes, the REG portion of the CPA exam is changing as of January 1, 2019. I don’t know if this information will still be applicable after that time. Once I find out, I will post an update.

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