At the start of Chapter 1, participants should identify the following topics for study:

* Goals v. purposes
* Investment purposes
* Myths of retirement
* Investment goals
* Investment needs of five critical decades
* Investment vehicles & entities
* Retirement - the ultimate objective
* Retirement costs & income needs
* Retirement plan development
* Basic planning elements

1. Contrast short-term financial goals with the four generic investment purposes explaining the planning purpose of this distinction, discuss the importance of defining, listing and prioritizing realistic goals, and point out to clients how investing allocation changes with age.
2. Evaluate the tax consequences of title holding methods by:

a. Listing nine basic ways to hold title to assets starting with the simplest and most direct way to hold property;
b. Identifying the tax benefits and drawbacks of co-tenancies, corporations (both C & S), partnerships, qualified retirement plans, and trusts particularly as they relate to a client's after-tax investment return; and
c. Defining custodianship describing the two uniform acts and clarifying how an estate can be tax beneficial to taxpayers.

3. Criticize the postponement of retirement planning stressing the importance of early planning using the author's suggested five step process, employ a balance sheet method to plan retirement, assist clients in diversifying their portfolios by balancing liquid and nonliquid assets, and explain the purpose of savings naming ten strategies to save.

       At the start of Chapter 2, participants should identify the following topics for study:

* Types of income
* Information reporting on taxable income
* Rules of budgeting
* Cash
* Acquisition
* Assets
* Rules of management
* Managing risk
* Taxes
* Leverage

1. Name three goals of money management listing four types of income, identify three causes of increased taxable income for itemizing taxpayers, and appropriately report at least eight types of taxable income.
2. Distinguish tax-free municipal bonds from fringe benefits in generating tax-free income, explain two benefits of tax deferral, and identify at least one tax-deferred investment permitting taxpayers to better invest for retirement.
3. Name several ways to shelter income explaining how income sheltering amplifies investment return.
4. Budget income into cash by containing expenditures with the author's six step process and developing discretionary income using four important variables, diffuse a client’s negative outlook on budgeting with five strategies, convert income into assets by purchasing investments, and apply six important asset acquisition rules or improved investment return.
5. Evaluate at least eight major tax-advantage investments following six basic management rules, and discuss the economic impact of accelerating deductions, postponing tax liability, and leveraging.

       At the start of Chapter 3, participants should identify the following topics for study:

* Obstacles to preservation
* Tracking spending
* Building savings
* Designing a budget
* Determining worth
* Analyzing net worth
* Ignorance
* Inflation
* Taxes
* Tax planning tactics

1. Track spending habits and design a budget to increase discretionary income, analyze net worth using a balance sheet, take an asset inventory listing liabilities, and identify where changes must be made to meet financial goals.
2. Explain why individuals should take primary responsibility for the investment planning including necessary self-education, allocate financial resources among investments to maximize return, and discuss the impact of inflation, risk versus return, and basic income tax planning tactics that can be used by clients to minimize taxes.

       At the start of Chapter 4, participants should identify the following topics for study:

* Elements of like-kind exchanges
* Related party exchanges
* Personal & multiple property regulations
* Delayed (deferred) exchange regulations
* Actual & constructive receipt rule
* Qualified contribution plans
* Tax-deferred annuities
* Installment sales
* At-risk rule
* Deferred compensation and options

1. Name two benefits of tax deferral, summarize the former use of tax deferral under §1034, and clarify the deferral advantage under §1031 listing its three elements.
2. Explain the related party §1031 restrictions identifying prohibited parties or entities and permissible disposition exceptions, make recommendations for the protection of exchange participants, and summarize the history of the personal and multiple property regulations clarifying the unique personal property like-kind and netting requirements for multiple asset exchanges.
3. Outline the evolution of §1031 delayed exchanges identifying allowable transfers, select replacement property within statutory deadlines, list four constructive receipt safe harbors, explain methods to secure exchange party performance, and summarize the §1031 partnership underlying asset rule. Design retirement plans following four basic steps, identify two of the most popular methods for providing for retirement, and determine near retirement investments.
4. Determine three requirements for an installment, explain how to elect out of the installment method, list at least five variables affecting §453 availability. Illustrate how to use a property option to receive income and postpone tax.

       At the start of Chapter 5, participants should identify the following topics for study:

* Work Opportunity Credit & Rehabilitation Credit
* Low Income Housing Credit & Child & Dependent Care Credit
* Estimated taxes
* Interest
* Automobile deductions
* Business entertainment deductions
* Depreciation & cost recovery
* Net operating losses
* Tax breaks for nonitemizers
* Amended returns

1. Apply at least six tax saving credits identifying qualified computational expenses and describing their limitations and restrictions.
2. Outline the estimated tax rules and procedures including the four payment deadlines and underpayment penalties, point out the economics of overpaying estimated taxes. Determine the deductibility of personal interest, investment interest, prepaid interest, points, and prepayment penalties, and offset passive income with rental property mortgage interest.
3. Deduct business vehicle operating costs using (or switching between) the actual cost method or the standard mileage rate and allocating expenses based on §162 usage, retain substantiatable expense and mileage records, and explain five depreciation traps when purchasing a vehicle.
4. List three requirements for business expenses to meet the directly related test, explain the elements of the associated test, identify the nine business expense statutory exceptions, and summarize the application of R.R. 90-23 and R.R. 99-7 to the deduction of transportation costs to a temporary work location.
5. Apply business asset depreciation using both ACRS and MACRS recovery classes, identify three sources of §172 net operating losses (NOLs) explaining carryback and carryover rules, name several tax breaks for nonitemizing taxpayers, evaluate the advisability of filing an amended return, avoid audits by claiming refunds for provable items, and determine which return amendments are safest.

       At the start of Chapter 6, participants should identify the following topics for study:

* Using progressive tax rates
* Deductible business expenses
* Home-office deduction
* C or regular corporations
* S corporations
* Family partnerships
* Kiddie tax trap
* Child care & education
* Gifts
* Interest-free loans

1. List six formats for income splitting, compare the tax treatment of employee and self-employed business expenses particularly home-office expenses noting the two non-exclusive use exceptions and the income limitation, summarize changes made to home office deduction under TRA ’97, and determine the ability of self-employeds to make annual deductible contributions to a Keogh plan.
2. Maximize the tax opportunities available to an unincorporated business by specifically discussing retirement plans, hiring family members, travel expenses, casualty losses, bad debts, and self-employment tax.
3. Summarize the uses and tax characteristics of regular and S corporations by:

a. naming at least six circumstances when incorporation is desirable,
b. comparing the taxation of these entities including their ability to split income; and
c. listing initial §351 formation and capitalization issues discussing appropriate tax form filings for each entity.

4. Explain the use of partnerships to split income among partners specifically including the use of §704(e) family partnerships and the consequences of gifting a partnership interest to a child or to another family member.
5. Set up a custodianship to split income and contain the “kiddie tax” listing three initial planning considerations and four examples of good investments for children, summarize deductions and credits for childcare, education, children, and §7872 loans, and explain the income and later estate tax benefits of gifts.

       At the start of Chapter 7, participants should identify the following topics for study:

* $500,000 home sale exclusion
* Municipal bonds
* Divorce & separation settlements
* Gifts & inheritances
* Life insurance
* Fringe benefits
* Taxation & valuation of benefits
* Employee expense reimbursement & reporting
* Fixed & variable rate allowances
* Social security

1. Apply selected tax elimination techniques by:

a. explaining the current §121 home sale exclusion contrasting it with the former provision;
b. determining qualifications for tax-free state or local obligations specifically discussing private activity bonds; and
c. identifying the tax elimination aspects of family transactions such as gifts, bequests, inheritances, life insurance, and even divorce.

2. Maximize employer deductions and increase tax-free incentive-based compensation for employees by:

a. explaining at least eight rules for excluding fringe benefits under §132 and their proper reporting on the W-2; and
b. adopting popular employee fringe benefits including employer paid accident & health coverage, meals or lodging, cafeteria plan benefits, §127 education assistance, achievement awards, group life insurance and dependent care assistance.

3. Value fringe benefits according to IRS regulations, comply with ERISA requirements, properly report reimbursed and unreimbursed business expenses under accountable and nonaccountable plans, substantiate auto expenses using a fixed and variable rate, and determine eligible for retirement benefits exempt from social security taxes.

       At the start of Chapter 8, participants should identify the following topics for study:

* Need for asset protection
* Types of creditors
* Fraudulent transfers
* Preparation for asset protection
* Types of insurance
* Buy-sell agreements
* Individual ownership and corporate ownership
* Asset protection aspects of trusts
* Co-tenancy and partnerships
* Divorce

1. Point out the goals and purposes of asset protection and describe the objections some people have about shielding assets from creditors by:

a. Listing at least six reasons for asset protection and identifying sixteen situations that can unexpectedly put assets and financial security at stake;
b. Isolating eighteen common sources of lawsuits and analyzing the author's concept of exploding and imploding liability; and
c. Implementing asset protection using the primary concepts of insurance, asset placement and statutory protections.

2. Advise clients on the importance of the three types of creditors associated with asset protection and fraudulent transfers.
3. Summarize the fraudulent transfer laws listing several badges of fraud, clarify statute of limitations and criminal penalties, and differentiate permissible asset transfers.
4. Determine the degree and necessity of asset protection by figuring net worth using a balance sheet, determining asset values, and preparing a balance sheet.
5. Identify the ways that insurance and buy-sell agreements can offer asset protection by:

a. Clarifying the asset protection elements of homeowner's, automobile and disability insurance;
b. Differentiating the four parties under a life insurance contract giving potential reasons for establishing an irrevocable life insurance trust; and
c. Compare entity purchase and cross purchase buy sell agreements.

6. Analyze and contrast the asset protection advantages and disadvantages of ownership formats and entities by:

a. Comparing the use of individual ownership and corporate ownership in an asset protection plan and including the importance of S corporations and their estate tax planning advantages;
b. Discussing testamentary trusts, living trusts and at least eight subcategories of trusts pointing out asset protection elements;
c. Distinguishing among the various types of co-tenancy listing their asset protection dangers, describing several types of partnerships and comparing them to limited liability companies; and
d. Demonstrating the unique asset protection qualities of retirement plans, custodianship, and estates as asset protection tools.

7. Identify three formats that courts typically follow if a couple does not have an enforceable premarital agreement, and explain post-nuptial and premarital agreements and how they relate to divorce settlements and divisions.

       At the start of Chapter 9, participants should identify the following topics for study:

* Build, preserve & distribute
* Legal documents
* Estate planning team
* Estate administration
* Transfers within probate
* Transfers outside probate
* Transfers using a trust
* Special planning tools
* Facts

1. List the three basic elements of estate planning and discuss with clients where changes may be necessary in designing such a plan, and explain the importance of well-drafted legal documents and how to go about drafting them. Clarify the key participants in an estate planning team and in estate administration and their roles in estate planning.
2. Outline the probate process to guide clients through an average probate, and identify ways to transfer property or money outside the probate system or by using a trust. Discuss at least sixteen estate planning techniques and devices that can be used to pass more wealth to survivors and save death taxes while retaining maximum control where possible. Categorize estate-planning facts into three categories in order to develop the foundation of an estate plan.

       At the start of Chapter 10, participants should identify the following topics for study:

* Taxable estate
* IRS valuation
* Estate tax return & payment
* Tax basis for estate assets
* Generation-skipping transfer tax
* Application of gift taxes and valuation
* Gift tax annual exclusion
* Gift tax marital and charitable deductions
* Gift tax advantages and disadvantages
* Shifting income & gain

1. List the eight potential death taxes differentiating federal estate tax as it applies to various size estates, identify and distinguish two principal taxes that impact how individuals are taxed at death, and explain the expiration of the state death tax credit.
2. Define taxable estate under §2501 and determine what assets are included in a gross estate by examining and differentiating among four basic categories of property and transfers.
3. Name and clarify four estate deductions allowed under federal estate tax law and list their tax advantages and disadvantages.
4. Value a decedent’s assets taking advantage of permitted elections, describe the use of the Form 706 to pay any estate tax due, figure the tax basis of estate assets and explain how common transactions affect property basis under §1014.
5. Advise clients on the advantages of gift planning including estate reduction but warning as to the GST, track the steps to compute gift tax identifying the gift tax exclusion amount, and determine the value of different types of gifts including split gifting for spouses.
6. Identify the various gift tax exclusions, clarify the treatment of below-market loans, list the gift tax marital deduction requirements, compare the tax consequences of giving various assets listing five factors to consider when gifting, and describe the use of the Form 709 to compute and pay federal gift tax.

       At the start of Chapter 11, participants should identify the following topics for study:

* Provisions of wills
* Requirements of wills
* Executors and guardians
* Types of wills
* Title implications
* Changes to a will
* Advantages of a will
* Simple will
* Probate pros and cons
* Probate avoidance

1. Define four types of wills listing at least five functions a will can perform, identify at least four types of bequests, compare the duties of executors and guardians, and name four ways to hold title describing their tax ramifications.
2. Point out several advantages of a properly drafted will, discuss the distribution flow of simple wills, and compare the pros and cons of probate proceedings.

       At the start of Chapter 12, participants should identify the following topics for study:

* Purpose of trusts
* Common elements of trusts
* Types of trusts
* Living trusts
* Income tax & trusts
* Gift tax & trusts
* Estate tax & trusts
* Identification, recital & property transfer clauses
* Income and principal & revocation and amendment clauses
* Trustee and trust termination clauses

1. Describe the four party relationship of a trust, give at least eight reasons to establish a trust, and differentiate among eight types of trusts analyzing their estate planning function.
2. Point out seven recommended living trust provisions analyzing the application of gift and income tax considering the grantor trust and unlimited marital deduction rules, and contrast “A-B” with “A-B-C” trust formats.

       At the start of Chapter 13, participants should identify the following topics for study:

* Individual ownership & sole proprietorships
* Corporations
* Trusts holding title & business trusts
* Co-tenancy taxation, percentage interests & partition
* Partnership taxation & recapitalization
* Family partnerships
* Limited liability companies
* Retirement plans
* Custodianship
* Estate

1. List nine basic tax and legal title formats, showing the advantages and disadvantages of holding property in a sole proprietorship, a corporation, or an S corporation, and how to avoid associated title pitfalls.
2. Compare the title holding benefits of trusts, co-tenancy, partnerships, and limited liability companies and the tax characteristics of each. Distinguish among three types of retirement plans used to provide lifetime benefits to a business owner and to employees, and explain the tax treatment of custodianships and a probate estate.

       At the start of Chapter 14, participants should identify the following topics for study:

* Types of life insurance
* Life insurance trusts
* Deferred annuities
* Private annuities
* Buy-sell agreements
* Purchase price & terms
* Community property
* Professional corporations
* S corporations
* Sole shareholder planning

1. Name the four different persons in which rights are placed by life insurance and list at least five reasons to purchase life insurance.
2. Describe the tax treatment of life insurance proceeds by:

a. Identifying their normal tax treatment including premiums for personally owned life insurance and lifetime benefits and listing several exceptions particularly the transfer for value rule;
b. Naming at least three variables that influence whether life insurance is taxable for federal estate tax purposes; and c. Discussing the gift tax associated with transfers of life insurance policies.

3. Compare the pros and cons of seven types of life insurance policies (and their variations) to help clients choose a suitable policy. Provide reasons for establishing and eight considerations of establishing an irrevocable life insurance trust in order to achieve several estate tax planning advantages.
4. Differentiate between deferred annuities and private annuities to advise clients in their estate-planning process. Distinguish an entity purchase agreement from a cross purchase agreement and thereby perhaps realize tax and legal advantages.

       At the start of Chapter 15, participants should identify the following topics for study:

* Business valuation of tangible & intangible assets & goodwill
* Business valuation of qualified family-owned businesses
* Business valuation of land subject to conservation easement
* Business valuation discounts
* Redemptions
* Buy-sell agreements
* Death of spouse
* Stock redemptions
* Stock recapitalization
* Deferred compensation agreements

1. Give three reasons why a business interest must be valued in an estate that is subject to federal estate tax, list eight factors used to determine the net value of a business under the regulations, and discuss the eight valuation factors in R.R. 59-60 and their impact.
2. Describe how tangible assets are normally valued identifying those assets whose valuation is based on values other than book value, and list the four steps in R.R. 68-609’s valuation formula for intangible assets and the effect such amount can have on the total value of a business.
3. Analyze special business valuation issues and redemptions under §303 by:

a. Discussing the repealed qualified family-owned business estate tax deduction;
b. Clarify the terms of the election that allows clients to exclude from their taxable estate 40% of the value of land subject to a qualified conservation easement;
c. Determining the value of a minority stock interest and figure fractional interests in order to obtain applicable valuation discounts, and
d. Describing the §303 exception to the dividend treatment of redemptions and how to qualify.

4. Explain the tax consequences and issues in leaving an estate to a surviving spouse, compare the basic elements of buy sell agreements, stock redemptions, and stock recapitalizations in order to dispose of business interests before death, and describe deferred compensation agreements and their impact on estate planning.

       At the start of Chapter 16, participants should identify the following topics for study:

* Application of estate tax freeze rules
* Corporations, partnerships & exceptions
* Qualified payment exception to zero value rule
* Minimum valuation of a junior interest
* Capital contributions, redemptions & recapitalizations
* Attribution rules
* Transfers of interests in trust
* Term interests & joint purchases
* Buy-sell agreements & options
* Lapsing rights & restrictions

1. List the benefits of an estate freeze and its ability to reduce the value of a business interest, name four types transactions to which Chapter 14 rules apply, define terminology used in the Chapter 14 valuation rule that applies to corporations and partnerships, and list three exceptions to §2701.
2. Clarify the “zero value” rule under §2701 by:

a. Explaining the qualified payment exception and the consequence of being excepted;
b. Locating at least three variables that impact the application of §2701 and avoiding taxable events when valuing a distribution right;
c. Adjusting the transfer tax when a taxpayer fails to make a qualified payment on time and electing into or out of qualified payment treatment when appropriate; and
d. Valuing a junior equity interest according to §2701 rules and determining the value of other rights held together with an extraordinary payment right

3. Explain other provisions of §2701 by:

a. Identifying the treatment of a capital contribution, a redemption, or a recapitalization under §2701;
b. Determining when an individual is deemed the owner of an interest that is held indirectly through a corporation, partnership, trust or other entity based on the §2701 attribution rules;
c. Clarifying when transfer tax adjustments will be made to transfers or inclusions in the gross estate;
d. Splitting an applicable retained interest to allow value to be given to a participating feature of a participating preferred interest; and
e. Applying a three-step computation using the subtraction method to determine an amount of a gift resulting from a transfer to which §2701 applies.

4. Define the terms used in §2702 concerning transfers of interests in trust, apply the zero value rule to a transfer of interest in trust, and list three exceptions to §2702. Treat a transfer of an interest in property when there is one or more term interests as a transfer of an interest in a trust, and clarify the treatment of joint purchases.
5. Apply the requirements and exceptions of §2703 to insure property is valued appropriately, and treat lapses as a transfer by gift or as includible in the decedent’s gross estate under §2704 when applicable. Define key terminology of §2704 to clarify these valuation rules, identify the amount of the transfer, and note which lapses or restrictions qualify as an applicable restriction.

       At the start of Chapter 17, participants should identify the following topics for study:

* Managing the estate
* Medicare
* Medicaid & countable assets
* Medicaid & non-countable assets
* Medicaid & inaccessible assets
* Private insurance
* Health care decisions
* Supplemental Security Income
* Income & assets
* Disability benefits

1. Enhance estate management techniques for the elderly and disabled by:

a. Discussing joint tenancy and the benefits and drawbacks of using such a method for asset management;
b. Identifying at least three levels of conservatorship that can influence management and protection of an estate and/or personal care and list five disadvantages of this tool; and
c. Explaining a durable power and naming six advantages of establishing a revocable living trust as a way to manage assets in an estate.

2. Compare and contrast the basic eldercare benefits of Medicare, Medicaid, and Supplemental Security Income, identify several disadvantages of the Medicaid program and how to determine income and to divide assets into three separate groups, note the dangers and benefits of gifting to family members, and identify how individuals can use private insurance as a short-term solution for catastrophic illness.
3. List three tools that can allow patients to refuse treatment even when incompetent, explain Supplemental Security Income and how it relates to elderly and disability planning, and discuss the requirements that must be met in order to receive disability benefits.

       At the start of Chapter 18, participants should identify the following topics for study:

* After death planning
* Federal returns
* Decedent’s estate tax
* Preparation of the Form 706
* Estate income tax return
* Filing requirements of decedent’s final income tax return
* Included income
* Exemptions & deductions
* Filing the gift tax return
* Special applications & traps of the gift tax return

1. Strengthen post-mortem estate planning in the face of funeral and administrative expenses by using elections and disclaimers.
2. Identify the due dates of three federal forms, clarify the filing requirements of the decedent’s estate tax form, and name three exceptions to the general rule of estate tax payment.
3. Analyze the processes and procedures necessary to the preparation and timely filing of the Form 706.
4. Apply the filing requirements for estate income tax returns and for the decedent’s final income tax return by:

a. Figuring the estate income tax using any of the available tax accounting methods and tax years to reduce tax liability; and
b. Filing Form 1310 for the decedent or a joint return for the decedent and the surviving spouse.

5. Determine the totality of income be included on the decedent’s final income tax return using any available exemptions or deductions.
6. Avoid penalties by timely filing a gift tax return, use gift splitting to reduce gift taxes, and describe eight special gift applications and traps together with ways to avoid their tax consequences.

CHAPTER 1 - FINANCIAL TAX PLANNING

Comparing Goals & Purposes

Investment Purposes

Purpose #1 - Comfortable Retirement

Myths of Retirement

Plan For 10 to 15 Retirement Years

Stay With One Company to Retire With the Best Benefits

Preserve Capital

Retirees Are Taxed Less

Housing Costs Are Less

Just the Spouse and Me

Company Insurance & Medicare Will Cover Medical Bills

Retirees End Up In a Nursing Home

Purpose #2 - Education

Purpose #3 - Family & Personal Stability

Purpose #4 - Enjoyment of Life

Purpose #5 - Commitment

Investment Goals

Find Your Place in Time

“Know Thy Investment Self”

Investment Vehicles & Entities

Individual

Corporate

Trusts

Co-Tenancy

Partnership

Retirement Plan

Custodianship

Estate

Retirement Now - The Ultimate Objective

Defining Retirement

When Do I Want To Retire?

What Kind Of Lifestyle Do I Want?

Do I Want To Move?

Determining Retirement Costs & Income Needs

Developing a Plan

Savings - The 10% Rule

Selected Strategies for Savings

Basic Planning Elements

CHAPTER 2 - BUILDING AN ESTATE

Assets, Income & Cash

Income

Type #1 - Taxable

Information Reporting on Taxable Income

Payments

Salary & Wages

Interest Income

Dividends

Tax-refunds

Gambling Winnings

Other Income Known to the IRS

Real Estate Transactions

Type #2 - Tax-free

Type #3 - Tax-Deferred

Type #4 - Tax-sheltered

Gifts

Borrowed Money

Gain on Home Sales

IRA Rollovers

Inheritances

Life Insurance Proceeds

Property Settlements

Child Support Payments

Money Recovered For Personal Injuries

Workers Compensation Payments

Disability Payments

Tax Refunds

Municipal Bond Interest

Vacation Home Rental

Children’s Wages

Children’s Investment Income

Scholarships

Budgeting

Rule #1: Expenses - 60%

Rule #2: Taxes - 20%

Rule #3: Savings - 10%

Rule #4: Education - 10%

Rule #5: Keep Your Benefits

Cash

Lifestyle

Emergency Funds

Savings as Deferred Investing

How To Save

Programmed Savings

Tax Savings

Joint vs. Separate Returns

Purchase of Assets

Acquisition

Stay Liquid - Be Able To Get Your Money Back

Grow - Make Money on Your Money

Shelter - Get Tax Benefits

Build - Don’t Spend Your Benefits

Avoid Linking - Each Investment Must Stand On Its Own

Analyze - Investigate the Investment

Assets

Management

Rule #1 - Develop Cash Flow

Rule #2 - Learn To Negotiate

Rule #3 - Manage Risk

Investment Loss

Liability

Poor Health

Premature Death

Rule #4 - Diversify

Rule #5 - Monitor Assets

Rule #6 - Use Systems

Taxes & Investment Economics

Deductions Now, Taxes Later or Maybe Never

Accelerate Deductions

Taxes

Charitable Contributions

Medical Expenses

Miscellaneous Expenses

Business Expenses

Leverage

CHAPTER 3 - PRESERVATION OF WEALTH

Four Obstacles to Preservation

Spending Habits

Track Your Spending

Income

Expenditures

Living Expenses

Fixed

Variable

Credit Card Payments

The Bottom Line

Converting a Minus into a Plus

Build in Savings

Adjustments

Designing a Budget

What Are You Worth?

Inventory Assets

Cash

Personal Property

Investments

List Liabilities

Analyze Net Worth

Wasting Assets

Liquidity

Diversification

Cash Reserve

Ignorance

Taking Control

Planning Responsibility

Delegation

Asset Allocation - Risk & Return

Inflation

Taxes

Tax Planning Tactics

CHAPTER 4 - DEFERRAL

Former §1034 - Repealed

Section 1031 “Like Kind” Exchanges

Exchange Advantage

Importance of Deferral

Three Elements

Exchange Requirement

Two-Party Exchanges

Multi-Party Exchanges

Alderson

Baird

Delayed Exchanges

Qualified Property Requirement

Like-Kind Requirement

Rules of Boot

Related Party Exchanges

Definition of Related Party

Exceptions to the Two-Year Rule

Contractual Protection

Transactions Between A Partner & Partnership

Foreign Real Property Exchanges

Personal & Multiple Property Regulations

Effective Date

General Rule for Netting Liabilities

Abandonment of Anticipatory (Re)Financing Proposal

Like-Kind Requirement for Personal Property

Like-Kind

Like Class

Five vs. Four Digits

Miscellaneous Category

SIC Replaced by NAICS System

Property Held for Investment

Class Priority

Other Personal Property

Goodwill Prohibition

Multiple Asset Exchanges

Definition

Exchange Groups

Aggregation & Allocation

Residual Group

Liabilities

Delayed (Deferred) Exchange Regulations

Effective Date

Deferred (Delayed) Exchange Definition

“Reverse-Starker” Transactions

Identification Requirements

Identification & Exchange Periods

Application of §7503

Method of Identification

Property Description

Incidental Property - 15% Rule

Revocation

Substantial Receipt

Multiple Replacement Properties

Actual & Constructive Receipt Rule

Four Safe Harbors

Safe Harbor #1 - Security

Safe Harbor #2 - Escrow Accounts & Trusts

Disqualified Person

Who Is An Agent?

Safe Harbor #3 - Qualified Intermediary

Who Is A Qualified Intermediary?

Direct Deeding

Assignment

Simultaneous Exchanges

Safe Harbor #4 - Interest

Interest Reporting - §468B(g)

Restrictions On Rights to Money & Other Property - “g(6)” Limitations

Outside Transfers of Money or Other Property

Exchanges of Partnership Interests

Effective Date of Partnership Provisions

Retirement Plans

Designing Your Retirement

Sources of Retirement Income

Qualified Corporate Programs

Defined Contribution Plans

Profit Sharing Plan

Money Purchase Pension Plan

Stock Bonus Plan

Employee Stock Ownership Plan

401(k) Plan

Defined Benefit

Defined Benefit Pension

Annuity Plan

SIMPLE Plans

Self-Employed Plans

Individual Retirement Accounts

Penalty-Free Withdrawals

Roth IRA - §408A

Tax-Deferred Annuities

Mechanics

Types of Deferred Annuity

Fixed Annuity

Variable Annuity

Minimum Investment & Charges

Simplified Employee Pension (SEP) Plan

Investment Assets

Matching Income to Expenditures

Participant Loan Regulations

Additional Loan Requirements

DOL Regulations

Installment Sales

Requirements

Late Election Out of Installment Method

Formula

Mortgage in Excess of Basis

Recapture

Dealers

At Risk Rule

Application

Nonrecourse Financing

Qualified Nonrecourse Financing

Qualified Persons

Deferred Compensation

Options

CHAPTER 5 - REDUCTION

Tax Credits

Work Opportunity Tax Credit (WOTC) – §51

Computation

Welfare-to-Work & Work Opportunity Credits Merged

Certification Trap

Welfare-to-Work Tax Credit (Merged into WOTC) - §51A

Research & Development Credit (Expired) - §41

Enhancements for 2007

Rehabilitation Tax Credit - §47

Credit Rates

Residential vs. Nonresidential

External Wall Requirement

Basis Reduction

Low Income Housing Credit - §42

Amount of Expenditure

Set Aside Requirement

Qualifying Units

Gross Rent Limitation - 30%

Section 8 Assistance Exclusion

Recapture of Credit

30-Year Rule

State Credit Ceiling

AGI Limitation

Child & Dependent Care Credit - §21

Eligibility

Employment Related Expenses

Qualifying Out-of-the-home Expenses

Payments to Relatives

Allowable Amount

Identification of Provider

Estimated Taxes

General Rule

Annualized Method

Cash-Saving Strategies

Underpayment Cautions

Tax Refund Trap

Basic Deductions

Interest

Personal Interest - Repealed

Investment Interest

Prepaid Interest

Points

Huntsman Case

Prepayment Penalty

Interest on Real Estate

Rental Property

Home Owners

Automobile Deductions

Employee Automobile Deductions

Business/Personal Proration

Actual Cost Method

Standard Mileage Rate

Limitations on Standard Mileage Method

Must Be an Individual

Switching Methods

Claiming Deductions

Records

Mileage Records

Depreciation Traps

Percentage Test

Depreciation “Recapture”

Depreciation Limits for Autos

Leasing Restrictions

Mileage Allowance for Leased Autos

First-year Expensing - §179

Commuting - Local Business Transportation

Revenue Ruling 90-23 - Superseded

Temporary Work Site Definition

Reserve Units

Reimbursements

Revenue Ruling 99-7

Business Entertainment

Directly Related Test

Associated Test

Statutory Exceptions

Food and Beverages for Employees

Expenses Treated as Compensation

Reimbursed Expenses

Recreational Expenses for Employees

Employee, Stockholder and Business Meetings

Trade Association Meetings

Items Available to Public

Entertainment Sold to Customers

Expenses Includible in Income of Non-employees

Depreciation & Cost Recovery - §167 & §168

Personal Property

ACRS - §168

Applicable Percentage

Straight-line Election

MACRS

Recovery Classes

MACRS Elections

Straight-line

150% Declining Balance

Bonus (or Additional First Year) Depreciation

Qualifying Property

Coordination with §179

MACRS Conventions

Election to Expense Assets - §179

Income Limitation

Carryover

Deduction Reduction

Employee Restriction

Recapture - §1245

Net Operating Losses - §172

Creation of a NOL

Individual NOLs

Carrybacks & Carryovers

Temporary 5 Year Carryback - Expired

Further Limitations

Corporate NOLs

Tax Breaks for Nonitemizers

Adjustments

Credits

Amended Returns

Audit Avoidance

Safest Amendments

Not-So-Safe Amendments

CHAPTER 6 - INCOME SPLITTING

Using Progressive Tax Rates

Splitting Income among Group Members

Wealth Allocation

Major Formats

Unincorporated Business

Deductible Business Expenses

Home-Office Deduction

Requirements - §280A

Non-Exclusive Use Exceptions

Income Limitation

Home Office Deduction After 1998

Analysis

Retirement Plans

Hiring Your Children

Hiring Your Spouse

Travel Expenses

Casualty Losses

Bad Debts

Self-Employment Tax

Incorporation

“C” or Regular Corporation

Planning Considerations

When to Incorporate

Formation

Cash for Stock

Property for Stock

Stock for Services

Stock for Debt

Repeal of the “General Utilities” Doctrine

Corporate Assets

Leasing

Lessor

Gift & Leaseback

Sale & Leaseback

“S” Corporation

Single Taxation

S Corporation Return

Planning Considerations

Tax Advantages

Formation

Corporations That Qualify

Income-Splitting

Estimated Tax Payments

Family Partnership

Partner’s Distributive Share

Partnership Return

Schedule K-1 (Form 1065)

Family Partnerships

Family Members

Capital

Children as Partners

Earned Income

Gift of Capital Interest

Custodianship & Children

Taxation

Kiddie Tax Trap

Planning Points

Income-Shifting Investments

US Savings Bonds

Municipal Bonds

Growth Stock

Real Estate

Child Care & Education

Nursery School & Day Care - §21

Special Schools

Credit Plus Special School Expenses

Employer Dependent Care Program - §129

Education Savings Bonds - §135

Notice 90-7

Interest on Education Loans - §221

Buying an Off-campus House

Status as Second Home

Status as Rental Property

Gifting Gain for Education Expenses

Gifts

Gifts by Check

Facts

Holding

Interest Free Loans

De Minimis Exception

Special Rule for Gift Loans

CHAPTER 7 - ELIMINATION

Former Age 55 Exclusion - Repealed

$500,000 Home Sale Exclusion - §121

Two-Year Ownership & Use Requirements

Tacking of Prior Holding Period

Vacant Land

Mixed Business & Residence Use

Prorata Exception

Safe Harbor Regulations

Change in Place of Employment

Health

Unforeseen Circumstances

Use of Old §1034 & §121 - Gone A Longtime Ago

Limitations on Exclusion

Renting to Parents

Parent’s Benefits

Children’s Benefits

Municipal Bonds

Tax-Exempt Interest on Qualified State or Local Obligations

Reporting

Private Activity Bonds

Divorce & Separation Settlements

Alimony

Child Support

Property Division

Dependency Exemption

Gifts & Inheritances

Basis of Gift

FMV Less Than Donor’s Adjusted Basis

FMV More Than Donor’s Adjusted Basis

Holding Period

Income from Property Given to a Child

Life Insurance

Proceeds Not Received in Installments

Proceeds Received in Installments

Fringe Benefits

Prizes & Awards - §74(b)

Group Life Insurance Premiums - §79

Table I

Accident and Health Plans - §106 & §105

Meals & Lodging - §119

Cafeteria Plans - §125

Educational Assistance Program - §127

Dependent Care Assistance - §129

Reporting Requirements for Dependent Care Programs

Cash Reimbursement Plans

In-kind Assistance

Section 132

No Additional Cost Services - §132(a) & (b)

Qualified Employee Discounts - §132(c)

Services - §132(c)(1)

Property - §132(c)(2) & (4)

Working Condition Fringe Benefits - §132(d)

De Minimis Fringe Benefits - §132(e)

Spousal Insurance

Transportation Fringe Benefits - §132(f)

Moving Expense Reimbursements - §132(a)(6)

Retirement Planning Services - §132(a)(7)

Athletic Facilities - §132(j)

Nondiscrimination Under §132

Taxation & Valuation of Benefits

Valuation Provisions

Leased Cars

Purchased Cars

Fleet-Average Rule

Cents-Per-Mile Valuation

Commuting Valuation Rule

Chauffeur Services

Eating Facilities

Meal Subsidy Rule

ERISA Compliance

Welfare Plans

Additional Requirements

Employee Expense Reimbursement & Reporting

Family Support Act of 1988

Remaining Above-The-Line Deduction

Accountable Plans

Reasonable Period of Time

Fixed Date Safe Harbor

Period Statement Safe Harbor

Adequate Accounting

Per Diem Allowance Arrangements

Federal Per Diem Rate

Related Employer

Meal Break Out

Partial Days of Travel

Usage & Consistency

Unproven or Unspent Per Diem Allowances

Travel Advance

Reporting Per Diem Allowances

Reimbursement Not More Than Federal Rate

Reimbursement More Than Federal Rate

Nonaccountable Plans

Fixed & Variable Rate (FAVR) Allowances - R.P. 90-34

Elements

Periodic Fixed Payment

Periodic Variable Payment

Limitations

Record keeping

Social Security

Earnings Record

Payments Exempt from Social Security

Social Security Checkup

Form SSA-7004

Form SSA-7050

CHAPTER 8 - ASSET PROTECTION

Why Asset Protection?

Situations That Create Danger

Sources of Lawsuits

Types of Liability

Basic Protection Concepts

Types of Creditors

Evading Creditors

Fraudulent Transfers

Badges of Fraud

Statute of Limitations

Criminal Penalties

Permissible Asset Transfers

Asset Protection Goals

Preparation

Insurance

Homeowners Insurance

Automobile Insurance

Disability Insurance

Life Insurance

Life Insurance Trust

Buy-Sell Agreements

Definition

Asset Protection Aspects of Common Entities

Individual Ownership

Sole Proprietorship

Corporate

C Corporation

No Pass Through

The S Corporation - §1361

Trusts

Types of Trusts

Revocable Trust

Land Trusts

Irrevocable Trusts

Testamentary Trust

Business Trusts

Foreign Trusts - §679

Asset Protection Trusts - APTs

Foreign Jurisdictions

Alternatives

Income Taxation

Estate & Gift Tax

Creditor Protection

Family Trusts

Medicaid Trust

Grantor Retained Income Trust

Co-Tenancy

Tenancy in Common

Varying Percentages

No Survivorship

Joint Tenancy with Right of Survivorship

Equal Percentages

Tenants by the Entirety

Right of Partition

Partnership

Family Partnerships

Charging Orders

Phantom Income to Creditor

Tax Issues

Estate Savings

Income Tax Savings

Limited Liability Company

Retirement Plan

Retirement Fund Protection in Bankruptcy

Custodianship

Estate

Divorce

Premarital Agreements

Uniform Premarital Act - The California Example

Permitted Items of Agreement

Unenforceable Items

Retirement Equity Act of 1984

Benefits of a Premarital Agreement

Post-Nuptial Agreements

CHAPTER 9 - Estate Planning

Build, Preserve & Distribute

Legal Documents

Estate Planning Team

Attorney

Accountant

Insurance Agents

Financial Planner

Estate Administration

Probate Court

Executor

Internal Revenue Service (IRS)

Trustee

Family Members

Things to Be Done When Death Occurs

Estate Planning Techniques & Devices

Transfers within Probate

Disposition of Property without a Will

Disposition of Property with a Will

Transfers outside Probate

Joint Tenancy with Right of Survivorship

Tenancy in Common

Retirement Plan & Individual Retirement Accounts

Life Insurance

Gifts

Payable on Death Accounts (POD)

Transfers Using a Trust

Special Planning Tools

Spending

Annual Gift Tax Exclusion

Applicable Exclusion Amount

Spousal Portability of Unused Exemption Amount

2010 Special Election

Unlimited Marital Deduction

Family Business Deduction - Expired

Installment Payment of Estate Taxes - §6166

Private Annuities

Regs Restrict Private Annuity Tax Benefits

Installment Sale to Family Member

Self-Canceling Installment Notes

Irrevocable Life Insurance Trust

Special Valuation of Farms and Businesses - §2032A

Crummey Trusts

Charitable Remainder Trusts

Minor Trusts

Family Limited Partnerships

Grantor Retained Income Trusts

Qualified Personal Residence Trusts (QPRTs)

Grantor Retained Annuity Trusts (GRATs)

Grantor Retained Unitrusts (GRUTs)

Buy-Sell Agreements

Estate Planning Facts

Family

Property

Domicile

Objectives

Existing Estate Plan

CHAPTER 10 - Estate & Gift Taxes 

Federal Estate Tax 

Changing Legislative Landscape 

Spousal Portability - §2010(c)(2)

Persons Subject to Federal Estate Tax 

Applicable Exclusion Amount, Basic Computation & Rates 

Progressive or Flat Rate 

2010 Special Election 

State Inheritance Tax 

State Death Tax Credit Turns into Deduction – §2011 & 2058 

Taxable Estate - §2051 

Gross Estate - §2031 

Owned Property - §2033 

Interests Terminating At Death - Life Estates & Joint Tenancies 

Interests Created After Death 

Remainder Interests 

Dower & Curtsey - §2034 

Community Property Comparison 

Gifts within Three Years of Death - §2035 

Transfers from Revocable Trusts 

Retained Life Interest - §2036 

Retained Voting Rights 

Lifetime Transfers With Reversionary Interests - §2037 

Revocable Transfers - §2038 

Annuities - §2039 

Joint Interests - §2040 

Qualified Joint Interests Between Spouses - §2040(b)

Powers of Appointment - §2041 

Ascertainable Standard - The Safe Harbor Limitation 

5/5 Power

Life Insurance - §2042 

Incidents of Ownership 

Community Property Issue 

Deductions from Gross Estate 

Estate Expenses & Claims - §2053 

Inclusion of Administrative Expenses on Non Probate Assets 

Casualty & Theft Losses during Administration - §2054 

Charitable Transfers - §2055 (§170 & §2522)

Immediate Contributions 

Split Interest Contributions 

Charitable Remainder Trusts 

Charitable Lead Trusts 

Insurance Related Contributions 

Unlimited Marital Deduction - §2056 

Requirements 

Net Value Rule 

Non-Citizen Spouse 

Qualified Domestic Trust

Gifts to Non-Citizen Spouses 

Valuation 

IRS Valuation Explanation - §7517 

Alternative Valuation - §2032 

Special Valuation - §2032A  

Estate Tax Return & Payment - §6018 

Installment Payment of Federal Estate Taxes - §6166 

Computation 

Eligibility & Court Supervision 

Closely Held Business 

Acceleration of Payment

Flower Bonds 

Tax Basis for Estate Assets - §1014 

Community Property Cost Basis 

Basis of Property Under the 2010 Special Election 

Property to Which the Modified Carryover Basis Rules Apply 

Limited Basis Increase for Certain Property 

GST Tax - §2601 

Predeceased Parent Exception 

Exemption 

Allocation 

Retroactive Allocation 

Gift Taxes - §2501 to §2524 

Gift Tax Computation 

Calculation Steps 

Applicable Exclusion 

Application 

Entity Rule 

Valuation 

Real Property 

Stocks & Bonds 

Annuities, Life Estates, Terms for Years, Remainders, & Reversions 

Split Gifts - §2513 

Community Property States 

Annual Exclusion 

Per Donee/Per Year

Gifts in Excess of the Annual Exclusion 

No Gift Tax 

Gifts within 3 Years of Death 

Uniform Gifts to Minors Act

Exception for Minor’s Trusts - §2503(b) & (c)

Medical & Tuition Exclusion - §2503(e)

Qualifying Transfers 

Interest-Free or Below-Market Loans 

Gift Tax Marital Deduction 

Nondeductible Terminable Interests 

Gift Tax Charitable Deduction 

Partial Interests 

Selecting Gift Property 

Gift Advantages 

Gift Disadvantages 

Gift Tax Returns 

Includibility of Gifts in the Estate 

Shifting Income & Gain 

Gifts before Sale 

Transfers into Trust Prior to Sale 

Installment Obligations 

Transfer to Obligor at Death 

Income in Respect of a Decedent

Reporting of Foreign Gifts - §6039(f)

CHAPTER 11 - Wills & Probate 

What Is A Will? 

Provisions & Requirements 

Specific & General Bequests 

Residual Bequests 

Conditional Bequests 

Executor

Guardian 

Types of Wills 

Title Implications 

Individual

Joint Tenancy 

Tenants in Common 

Tenants by the Entirety 

Community Property 

Tax Basis Advantage 

Untitled Assets 

Changes to a Will

Advantages of a Will

Intestate Succession 

Periodic Review  

Continuing Business Operations 

Simple Will

Probate 

Advantages 

Disadvantages 

Probate Avoidance 

Joint Tenancy 

Community Property 

Totten Trust Accounts 

Life Insurance & Employee Benefits 

Living Trusts 

CHAPTER 12 - Trusts 

What is a Trust? 

Why a Trust? 

Types of Trusts 

Common Elements 

Revocable Trust

Irrevocable Trusts 

Testamentary Trust

Foreign Trusts - §679 

Family Trusts 

Medicaid Trust

Living Trust

Reversion 

Advantages of a Living Trust

Disadvantages 

Priority 

Pour-Over Will

Trust Taxation 

Income Tax 

Grantor Trusts - §671 to §678 

Grantor Retained Income Trust

Revocable Trusts Included in Estate - §646 & §2652(b)(1)

Election for Income Tax Purposes 

Irrevocable Trust Taxation 

Throwback Rules 

Capital Gains 

Deduction of Estate Planning Expenses 

Deductibility of Death Expenses 

Gift Tax 

Estate Tax 

Unlimited Marital Deduction 

Outright to Spouse 

Marital Deduction Trust

Qualified Terminable Interest Property (QTIP) Trust

“A-B” Format

“A-B-C” (QTIP) Format

Valuation & Tax Basis 

Alternate Valuation 

Fundamental Provisions - Revocable Living Trust

Identification Clause 

Recital Clause 

Property Transfer Clause 

Income & Principal Clause 

Revocation & Amendment Clause 

Trustee Clause 

Trustee’s Acceptance 

Choice of a Trustee 

Corporate Trustee Factors 

Individual Trustee Factors 

Trust Termination Clause 

CHAPTER 13 - Entities & Title 

Basic Entity Formats 

Individual & Sole Proprietorship 

Marital Property 

Timing & Domicile 

Corporate 

Categories of C Corporations 

Personal Holding Company - §541 

Attribution Rules 

Penalty Tax 

Regular C Corporation