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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 0 ||| Review Questions: 0 ||| Final Exam Questions: 80 |
| CPE Credits : | 16.0 |
| IRS Credits : | 16 |
| Price : | $125.95 |
| Passing Score : | 70% |
| Course Type: | NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents |
| Technical Designation: | Technical |
| Primary Subject-Field Of Study: | Taxes - Taxes for Course Id 1056 |
| Description : | This course will teach participants how to apply, implement, and evaluate the strategic tax aspects of marital dissolutions and living together arrangements. Current perspectives on property transfers, asset divisions, alimony, filing status, exemptions, and child support are examined with an emphasis on planning considerations. The cancellation of indebtedness income inclusion rules are examined in the context of debt forgiveness and property foreclosure. Emphasis is given to the exceptions from income inclusion contained in §108. The tax treatment of property repossession under §1038 is explored with detail given to the calculation of gain and received property basis. Finally, bad debt treatment under §166 is reviewed and critical distinctions made between business and nonbusiness debts. |
| Usage Rank : | 0 |
| Release : | 2016 |
| Version : | 1.0 |
| Prerequisites : | General understanding of federal income taxation. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
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| Advance Preparation : | None. |
| Delivery Method : | Self-Study. |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 27-Jun-2016 |
| NASBA Course Declaration : | Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam. |
| Approved Audience : | NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - 1056 |
| Keywords : | Taxes, Making, Best, Bad, SituationsBlowout, cpe, cpa, online course |
| Learning Objectives : |
As a result of studying each assignment, you should be able to meet the objectives listed below each assignment. ASSIGNMENT SUBJECTChapter 1 Basic Marital Tax Matters At the start of Chapter 1, participants should identify the following topics for study:
* Joint return * Separate returns * Head of household * Exemptions * Divorce costs * Withholding & estimated tax * Community property states * Ending the community * Living together After reading Chapter 1, participants will be able to:
2. Identify the requirements of filing a joint return noting how to avoid being penalized. 3. Determine the key elements of filing separate returns including what items to report and identify whether or not married taxpayers should file separate returns. 4. Recall the requirements for filing as head of household and the tax advantages and disadvantages of this filing status. 5. Recognize the phaseout of exemptions noting its affects on taxpayers, identify when exemptions can be taken for spouses, and determine reporting requirements for dependent exemptions, and specify the requirements for pre-2005 dependency particularly relationship, married person, citizen or resident and income. 6. Identify the former regular and special method for determining support noting complications from back child support, determine the current “qualified child” standard using residency, relationship, age, and joint return prohibition, and recall the requirements that must be met for parents to treat a child as a qualifying child of a non-custodial parent. 7. Identify deductible and nondeductible divorce expenditures noting which spouse is subject to tax imposed upon withheld wages, and recognize the effects of making separate estimated tax payments or joint declarations of estimated tax. 8. Determine community property and community property states, and identify the effects of conversion and commingling of property and how to avoid such marital property issues. 9. Identify community income earned by married couples for reporting purposes by:
b. Recalling the requirements for the special community income allocation rules of §66(a), determining what constitutes community property termination and specifying the treatment of alimony payments; and c. Recognizing the use of statements and records to provide estimates of a former spouse’s income and identifying conditions for greater tax relief. Chapter 2 Transfers Incident to Divorce At the start of Chapter 2, participants should identify the following topics for study:
* Premarital agreements * Application of §1031 * Incident to divorce * Property basis * Purchases of residence between spouses * Purchases of business interests between spouses * Selected asset divisions of residence & business interests * Real & personal property * Pension benefits After reading Chapter 2, participants will be able to:
2. Determine the benefits of premarital agreements and the requirements and permissible provisions for a valid and comprehensive agreement under the Uniform Premarital Act. 3. Specify the position of U.S. v. Davis on interspousal transfers noting the changes made by §1041, and identify the requirements of §1041 and the scope of its application. 4. Select the factors that determine whether a property transfer is incident to divorce and identify how to meet these factors or avoid §1041 altogether when desired. 5. Determine the application of §1041 to transfers in trust under §1041(e) and to third party transfers on behalf of a spouse or former spouse. 6. Recognize deferred tax liability by identifying property basis for the transferor spouse and transferee spouse under §1041 after a property settlement. 7. Specify the application of §1041 to property transfers where the transferee assumes liabilities encumbering the property, and choose the holding period for an asset transferred between spouses or former spouses incident to divorce. 8. Recall the dangers of purchasing a former spouse's interest in property particularly a marital residence and its tendency to create deferred tax liability. 9. Determine the tax effects of purchasing an interest in personal or real property used in a business or held for investment, recognize potential recapture and identify the use of an exchange to dispose of low-basis property received in a §1041 transfer. 10. Specify the common disposition alternatives available on divorce, recall the home sale exclusion requirements, and identify the tax treatment and use of installment obligations under §453 in divorce. 11. Recognize sale, redemption, recapitalization, liquidation and third-party transfers as methods of dividing a business in a marital settlement citing unique provisions under §302, §736 and §754. 12. Identify whether gain or loss on a sale of real or personal property is capital or ordinary, recognize the tax treatment of such gain or loss and recall the role and tax treatment of life insurance in property settlements. 13. Specify popular methods of dividing retirement benefits in a divorce or separation action identifying the requirements and tax consequences of a “qualified domestic relations order (QDRO). 14. Choose an overall tax and economic strategy for the division of pension benefits in a marital settlement by:
b. Determining the treatment of IRAs at divorce considering the IRA deduction limit and rollovers; c. Identifying strategies for retirement planning after divorce; d. Recognizing the Social Security benefits, military pensions, civil service pensions, or railroad pensions that may be available to a former spouse; and e. Selecting which debts incurred during a divorce are dischargeable in bankruptcy. Chapter 3 Alimony & Child Support At the start of Chapter 3, participants should identify the following topics for study:
* Alimony requirements of instruments executed after 1984 * Alimony requirements of instruments executed before 1984 * Deducting alimony paid & reporting alimony received * Recapture of alimony for type A & B agreements * Alimony substitution trusts & annuities * Alimony paid by estate * Child support * COBRA coverage * Qualified medical child support orders After reading Chapter 3, participants will be able to:
2. Identify variables that impact whether a payment is alimony since 1984 and determine whether a cash payment is deemed made to or on behalf of a former spouse in order to characterize it as alimony. 3. Recall the tax treatment of housing costs for the family residence noting the impact of ownership by contrasting when the nonoccupying spouse owns the home with when the occupying spouse owns the home. 4. Identify the tax treatment of life insurance premium payments, voluntary payments and payments to a remarried spouse, and specify the conditions that could recharacterize otherwise deductible alimony payments as nondeductible. 5. Determine the differences between child support and alimony noting their tax treatment to avoid reporting errors. 6. Identify the alimony and child support tax provisions that currently apply from those that applied to instruments executed prior to 1985 by:
b. Recognizing the marital or familial relationship and recalling the similarities and differences in the treatment of child support under current law and previous law. 8. Specify the alimony recapture rule for various marital agreements and its impact on the tax treatment of past payments. 9. Recognize the use of alimony trusts to realize tax advantage and security, determine the use of annuity contracts, and specify the proper tax treatment of alimony paid by an estate to a former spouse of a decedent. 10. Recall the tax treatment of child support, identify two circumstances where a payment will be fixed as child support, specify events that determine whether a contingency is clearly child-related noting how to rebut this presumption of child support, and recall the COBRA and qualified medical child support order rules by:
b. Determining what constitutes “qualified medical child support orders” noting differences with other similar orders and identifying the procedures, requirements and jurisdiction of QMCSOs. Chapter 4 Avoiding Tax on Debt Cancellation & Foreclosure At the start of Chapter 41, participants should identify the following topics for study:
* Real property business debt * General ordering of tax attribute reduction * Reduction of tax benefits * Basis reduction * Partnership bankruptcy * Corporation stock-for-debt rule * S corporation bankruptcy * Foreclosure * Discounted acquisition of debt After reading Chapter 4, participants will be able to:
2. Identify tax attribute reductions noting their application when reducing canceled debt, cite the special basis reduction rules, recognize the depreciable property election in reducing the basis of depreciable property before reducing any other tax attributes, determine what constitutes individual, partnership and S corporation bankruptcy, and specify the variables used in determining whether shares of stock issued to a creditor are nominal or token. 3. Determine gain or loss resulting from foreclosure or repossession noting reporting and filing requirements, specify the timing and character of the gain or loss, and cite the hidden income tax danger of directly or indirectly acquiring one's own debt at a discount. Chapter 5 Repossession At the start of Chapter 5, participants should identify the following topics for study:
* Non-installment method sales * Installment method sales * Basis of repossessed personal property * Bad debt * Repossession of real property * Figuring gain on repossession * Seller’s former home exception After reading Chapter 5, participants will be able to:
2. Determine the distinctions between the rules, calculations and effects of repossessions of personal and real property, and identify when a §166 bad debt deduction may be taken if the seller repossesses real property. Chapter 6 Bad Debts At the start of Chapter 6, participants should identify the following topics for study:
* True debt * Mechanics’ liens * Reporting & recovery * Credit transactions * Former business bad debts * Insolvency of partner * Business loan guarantees * Specific charge-off method * Nonaccrual-experience accounting method After reading Chapter 6, participants will be able to:
b. Recalling the treatment of bad debts related to political debts, mechanics’ liens and secondary liabilities on home mortgages; and c. Specifying the forms used to report bad debts and specifying the tax treatment of recovered amounts. b. Recalling the tests that must be met by an accrual method business taxpayer to be able to take a bad debt deduction for a political debt and identifying the tax consequences of the insolvency of a partner when a business partnership terminates and debts are owed; and c. Specifying methods that can be used by businesses to treat uncollectible amounts noting the rules that apply to each. Appendix A Legal Aspects of California Foreclosure At the start of Appendix A, participants should identify the following topics for study:
* Nonjudicial foreclosure * Judicial foreclosure process * Liability on mortgages and deeds of trust |
| Course Contents : | Chapter 1 - Basic Marital Tax Matters Filing Status Marital Status Same-Sex Marriage Unmarried Abandoned Spouse Rule - §7703 Married Joint Return Citizenship 1-3 Liability Innocent Spouse Exception Refund Offset Program - §6402 Injured Spouse - Form 8379 Separate Returns Itemized Deductions Medical Expenses Property Tax & Interest State Income Taxes Casualty Loss Separate vs. Joint Dilemma Disadvantages of a Separate Return Advantages of a Separate Return Joint Return after Separate Returns Head of Household Requirements Considered Unmarried Keeping Up a Home Qualifying Person Nonresident Alien Spouse Exemptions Phaseout of Exemptions Personal Exemptions Spouses Former Spouse Dependency Exemptions – Old & Current Rules Five Pre-2005 Dependency Tests - The “Old Rules” Test #1 - Relationship Household Member Test #2 - Income Dependent Child Income Exception Definition of a Child Definition of a Student Test #3 - Citizen or Resident Test #4 – Married Person Test #5 - Support Regular Method Joint Home Ownership Special Support Method for Children of Divorced or Separated Parents Custodial Parent Noncustodial Parent Back Child Support Dependency Tests After 2004 Unified Definition of a Qualified Child Four Dependency Tests Test #1 - Residency (or Time) & Citizenship Children of Divorced or Separated Parents Test #2 - Relationship Test Test #3 - Age Test Test #4 - Joint Return Restriction Medical Expenses Child-Care Credit Divorce Costs Allocation of Costs & Fees Tax Advice - §212(3) Fees to Obtain Alimony or Protect Income - §212(1) & (2) Fees to Obtain Property - §1012 & 1016 Nondeductible Expenses Withholding & Estimated Tax Joint Estimated Tax Payments Refunds & Deficiencies Nonresident Alien Spouse Withholding Community Property Community Property States Transmutation Commingling Income Reporting Spouses with Different Residency Statuses Special Income Rules For Spouses Living Apart - §66(a) & §879 Mandatory Application Earned Income Trade or Business Income Partnership Income or Loss Separate Property Income Social Security Benefits Other Income Denial of Community Property Reporting - §66(b) Community Reporting Relief Provisions - §66(c) Ending the Community Annulment Separation Alimony vs. Community Income Living Together Married v. Unmarried Tax Rate Comparison Sham Divorce Dependency Exemptions Attributable Income Alimony & Property Divisions Chapter 2 - Transfers Incident to Divorce Property Rights Marital Property Common Law Property Community Property Equitable Distribution Separate Property Asset Division Principles Premarital Agreements Uses & Benefits Control & Scope Limitations Retirement Equity Act of 1984 Enforceability Requirements Checklist Uniform Premarital Act - The Permitted Items of Agreement Unenforceable Items Property Settlements Section 1041 Application of §1041 Mandatory Scope Property vs. Income Savings Bonds Receivables Interest Imputed Interest Incident to Divorce Related To Termination Rebuttable Presumption Divorce or Separation Instrument Transfers in Trust Third Party Transfers Property Basis Gift Variation Passive Activity Loss Property Property Transferred In Trust Basis in Negotiated Property Divisions Adjudicated Property Divisions Caselaw General Rule - Immediate & Specific Liabilities Holding Period Notice & Record keeping Purchases Between Spouses Residence Home Mortgage Interest Deferral & Exclusion of Gain Business & Investment Property Recapture Section 1031 Exchange Asset Separation Final Personal Property Regulations General & Product Class Multiple Asset Exchanges Related Parties Two-Year Restriction Foreign Property Form 8824 Spousal Transfers Installment Selected Asset Divisions Residence Section 121 Home Sales Two-Year Ownership & Use Requirements Special Divorce Rules Tacking of Prior Holding Period Prorata Exception Limitations on Exclusion Installment Obligations Business Interests Corporate Stock Cases & Rulings PLR 9046004 Arnes Cases Mrs. Arnes v. Mr. Arnes v. Commissioner, 102 TC 522 (1994) Blatt Case Gaughan Case Section 302 Stock Redemption Recapitalization Partnerships Section 736(a) Payments Effect on Recipient Section 736(b) Payments Effect Exclusions From §736(b) Treatment Liabilities Series of Payments Section 754 Election Insurance Policies Real & Personal Property Classification of Assets Character of Gain or Loss Capital Assets - §1221 Long-Term or Short-Term Installment Net Gain or Loss Treatment of Net Capital Gains Section 1231 Assets Gains & Losses Recapture Of Net Ordinary Losses Ordinary Assets Depreciable Property Recapture on Personal Property Section 1245 Property Treatment of Gain Recapture on Real Property Section 1250 Property Pension Benefits Qualified Domestic Relations Order Taxation of Distributions Deferred v. Present Division of Benefits Deferred Division Arguments Present Division or Alternate Property Arguments Individual Retirement Arrangements IRA Deduction Limit Rollovers Divorce Distributions Amounts Not Rolled Over Retirement Planning After Divorce Social Security Benefits Divorced Spouse Benefits Divorced Widow(er) Benefits Military Pensions Divorced Spouse Benefits Jurisdiction Requirement Disposable Pay Direct Payment Divorced Widow(er) Benefits Social Security Offset Civil Service Pensions Divorced Spouse Benefit Divorced Widow(er) Benefit Railroad Pensions Divorced Spouse Benefit Divorced Widow(er) Benefit Bankruptcy Chapter 3 - Alimony & Child Support Spousal Support - aka Alimony Divorce or Separation Instrument Invalid Decree Amended Instrument Premarital Agreements Instruments Executed After 1984 Alimony Requirements Payment Must Be In Cash Payments to a Third Party Written Requests, Consents, or Ratifications Payments for Family Residence Taxpayer-Owned Home Spouse-Owned Home Jointly-Owned Home Rent On Property Owned by a Third Party Payments for Life Insurance Contingent Interest Voluntary Payments Payments to Remarried Spouse Designating Payments as Not Alimony Members of Different Households Exception Termination at Death Substitute Payments Child Support Past Due Child & Spousal Support Payments Joint Return Prohibited Minimum Term Rule for 1985 & 1986 Instruments Exception Instruments Executed Before 1985 - Prior Law Alimony Requirements Periodic Payments Exception for Installment Payments 10 Years Or Less More Than 10 Years Mixed Payments Marital or Family Relationship Property Settlement Child Support Deducting Alimony Paid Reporting Alimony Received Alimony as Compensation Recapture of Alimony for Type A & B Agreements Exceptions to Recapture Including the Recapture in Income Deducting the Recapture TRA ‘84 Recapture - 1985 & 1986 Instruments TRA ‘86 Recapture - After 1986 Instruments Exceptions Computation Alimony Substitution Trusts & Annuities Advantages of Alimony Trust Disadvantages of Alimony Trust Annuities Alimony Paid by Estate Child Support Contingency Relating To the Child Clearly Associated With a Contingency Heller Case Rebuttable Presumptions COBRA Coverage Coverage Termination Notice Election Choice of Coverage Cost Deductibles Qualified Medical Child Support Orders Definition Procedures & Duties Jurisdiction Chapter 4 - Avoiding Tax on Debt Cancellation & Foreclosure Income Inclusion Rule Exceptions from Income Inclusion Order of Exclusions Bankruptcy Case Exclusion - §108(a)(1)(A) Insolvency Exception - §108(a)(1)(B) Qualified Farm Debt Exclusion - §108(a)(1)(C) Qualified Farm Debt - §108(g)(2) Qualified Person - §108(g)(1) Real Property Business Debt - §108(a)(1)(D) Qualified Debt Exclusion Limit Ordinary Income Recapture Partnerships Deemed Distribution Rules S Corporations Student Loan Exception - §108(f) Purchase Money Debt Reduction Exception - §108(e)(5) Cancellation of Deductible Debt Exception - §108(e)(2) Reduction of Tax Benefits (Attributes) - §108(b) General Ordering of Tax Attribute Reduction Basis Reduction Depreciable Property Election Procedure Required Reduction Timing of Basis Reduction Limit on Basis Reduction Recapture of Basis Reductions Exempt Property Special Basis Reduction Rule for Qualified Farm Debt Qualified Property Basis Reduction Order Exclusion Limit Individual Bankruptcy Partnership Bankruptcy Depreciable Property Allocation of Debt-Discharge Income Corporate Stock-For-Debt Rule Token Share Inclusion Workout Inclusion Recapture of Gain on Later Debt Contributed to Capital Debt-For-Debt Exchange Earnings & Profits S Corporation Bankruptcy Net Operating Losses Adjustments to Shareholder’s Basis in Debt Bankruptcy Estate as Shareholder Reporting Mortgage Debt Relief Act of 2007 (Expired) Qualified Principal Residence Indebtedness Mixed Indebtedness Amount Realized On Foreclosure Nonrecourse Indebtedness Recourse Indebtedness Reporting Form 1099A Timing & Character of Gain or Loss Gain Loss Lender’s Tax Impact Foreclosure Discounted Acquisition of Debt Transactions Involving Related Parties Related Persons Chapter 5 - Repossession Personal Property Non-Installment Method Sales Basis of Installment Obligation Gain or Loss on Repossession Installment Method Sales Basis of Installment Obligation Gain or Loss on Repossession Basis of Repossessed Personal Property Bad Debt Real Property Conditions Figuring Gain on Repossession Limit on Taxable Gain Repossession Costs Indefinite Selling Price Character of Gain Basis of Repossessed Real Property Holding Period for Resales Buyer Improvements Bad Debt Seller’s Former Home Exception Chapter 6 - Bad Debts Non-Business Bad Debts Totally Worthless Determining Worthlessness Required Basis or Income Inclusion True Debt Loan or Gift Loan Guarantees Political Debts Mechanics’ Liens Insolvency of Contractor Secondary Liability on Home Mortgage Reporting Recovery Business Bad Debts Credit Transactions Income Inclusion Accrual Method Taxpayers Cash Method Taxpayers Former Business Debt Acquired from a Decedent Political Debts Insolvency of Partner Business Loan Guarantees Reporting Methods of Treating Bad Debts Specific Charge-Off Method Partly Worthless Debts Deduction Disallowed Totally Worthless Debts Recovery of Bad Debt Property Received for a Debt Bankruptcy Claim Net operating Loss Nonaccrual-Experience Accounting Method Performing Services Interest & Late Charges Appendix A - Legal Aspects of Introduction The Players Non-Judicial Foreclosure Desirability of a Non-Judicial Foreclosure Availability of a Non-Judicial Foreclosure Notice of Default Notice of Trustee Conducting the Foreclosure Considerations after the Foreclosure Judicial Foreclosure Process Desirability of a Judicial Foreclosure Availability of a Judicial Foreclosure Commencing a Judicial Foreclosure Appointment of a Receiver Obtaining a Deficiency Judgment Liability on Mortgages/Deed Of Trust Summary & Observations Glossary |
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