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  Home > Course Details
 

Course Details - Go to Course Contents

   New ! ! !   QAS   Registry   EA
    
Title :

1040 Tax Workshop - 2012

Author :

Danny C Santucci, JD

Status :

Production

CPE Credits :

40.0

IRS Credits :

40

Price :

$239.95

Passing Score :

70%

Primary Subject-Field Of Study :

Taxes - Taxation

Description :

Designed to make the practitioner comfortable with “high traffic” issues, this program enables participants to discuss and handle individual tax essentials. The course examines and explains the practical aspects of return preparation and individual planning, bridging the gap between theory and application. Significant new developments are summarized with emphasis on tax savings ideas. Practical applications and illustrations are used to systematically explore tax deferral, reduction, and elimination opportunities accompanying return preparation. For example, the analysis of gross income is discussed together with income splitting techniques; property transactions are examined alongside like-kind exchanges and involuntary conversions. The result is an extraordinary blend of the latest developments affecting individual returns and their related planning ideas.

Usage Rank :

0

Release :

2012

Version :

999

Prerequisites :

General understanding of federal income taxation

Experience Level :

Overview

Additional Contents :

Complete, no additional material needed

Advance Preparation :

None

Delivery Method :

Self-Study

Intended Participants :

Anyone needing Continuing Professional Education (CPE)

Approved Audience :

NASBA QAS - NASBA Registry - IRS Enrolled Agents - 

Revision Date :

08/15/2012

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.

Comments :

CPE, online, self-study, self study, CPA, CPAs, continuing professional education, continuing education, accounting, accountants, business, commerce, tax return preparation, tax deferral, income splitting

Learning Objectives :

As a result of studying each assignment, you should be able to meet the objectives listed below each assignment.

ASSIGNMENT SUBJECT
Chapter 1 Individual Tax Elements

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

    * Tax rates and tables
    * Filing status
    * Gross income
    * Dividends and distributions
    * Discharge of debt income
    * Exclusions from income
    * Nonbusiness and personal deductions
    * Education and medical expenses
    * Casualty and theft losses
    * Tax credits
LEARNING OBJECTIVES:

After reading Chapter 1, participants will be able to:
    1. Name federal revenue tax sources discussing the definitive role of gross income, estimate a client’s tax liability using current rates, tables, and statutory amounts, and determine a client’s responsibility for withholding and/or estimated taxes.
    2. Compare and contrast the various filing statuses pointing out advantages and disadvantages and naming the filing requirements of each.
    3. Define gross income under §61 including the tax treatment of compensation, fringe benefits, rental income, Social Security benefits, alimony, prizes and awards, describe dividend and distribution types including their tax differences, and explain how debt discharge can result in taxable income.
    4. Discuss the mechanics of income exclusions including education-related exclusions, gift and inheritance exclusions, insurance, personal injury awards, interest state and local obligations, and the foreign earned income exclusion.
    5. Categorize income tax deductions and use such deductions to reduce tax liability by:
      a. Identifying personal, spousal and dependency exemptions and reporting requirements including pre-2005 dependency rules;
      b. Determining the deductibility of five §163 interest categories, §162 educational expenses, §217 moving expenses, §165 casualty & theft losses, and §164 taxes along with their proper reporting and substantiation;
      c. Discussing four variables that impact the deductibility of charitable contributions, and identifying qualified organizations, permissible contributions contribution limitations, their tax treatment, and substantiation requirements;
      d. Explaining the deductibility of medical care expenses including medical insurance, meals and lodging, transportation, home improvements and lifetime care payments including the impact of Medicare;
      e. Naming at least twelve deductions that are subject to the 2% of AGI limitation, up to six deductions not subject to the 2% limit, and eleven nondeductible expenses.
    6. Compare several types of tax credits identifying the eligibility requirements and applying the cited changes created by recent tax legislation to individual tax returns.
ASSIGNMENT SUBJECT
Chapter 2 Expenses, Deductions & Accounting

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

    * Landlord’s rental expenses
    * Health insurance costs
    * Home office deduction
    * Travel and entertainment expenses
    * Employee expense reimbursement and reporting
    * Automobile deductions
    * Fringe benefits
    * Methods of accounting
    * Expensing and depreciation
    * Amortization
LEARNING OBJECTIVES:

After reading Chapter 2, participants will be able to:
    1. Explain the tax treatment of rental property expenses contrasting their impact on landlords and tenants taking into consideration the tax differences given to rent, advance payments, and security deposits.
    2. Analyze the application of the hobby loss rules to a business, determine deductible health insurance costs, discuss the requirements of the home-office deduction, figure self-employment taxes for clients, and name four available business and investment credits.
    3. Position clients to properly deduct travel and entertainment expenses by:
      a. Identifying at least nine types of business travel expenses, determining a taxpayer’s tax home, if any, and work locations based on the IRS’s definition, and clarifying the “away from home” requirement and “sleep and/or rest” rule;
      b. Listing the key elements of deductible domestic and foreign business travel costs and explaining the Reg. §1.162 deduction of convention and meeting expenses;
      c. Discussing the three §274 entertainment deductibility tests, clarifying the limits on home entertaining, ticket purchases, and meals and entertainment, and listing eight exceptions to the percentage reduction rule; and
      d. Listing substantiation requirements associated with business gifts, employee achievement awards, and sales incentive awards.
    4. Differentiate accountable and nonaccountable plans identifying three requirements for an accountable plan particularly adequately accounting for travel and other employee business expenses.
    5. Differentiate local transportation and commuting explaining how nondeductible personal commuting and relates to local business transportation expenses.
    6. Apportion automobile expenses between personal and business use, explain the actual cost and standard mileage methods, and define the gas guzzler tax.
    7. Name twelve types of excluded fringe benefits that can increase employers’ deductions and incentive-based compensation of employees providing examples of each.
    8. Apply the cash, accrual, or other methods of accounting, determine available accounting periods including their impact on income and expenses, and compare expensing, depreciation, and amortization giving examples of each.
ASSIGNMENT SUBJECT
Chapter 3 Property Transfers & Retirement Plans

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

    * Sales and exchanges of property
    * Home sale exclusion
    * Installment sales
    * Repossession
    * Involuntary conversions
    * At-risk rules
    * Like-kind exchanges
    * Retirement plans
    * IRAs
    * SIMPLEs
LEARNING OBJECTIVES:

After reading Chapter 3, participants will be able to:
    1. Distinguish sales of property and easements from exchanges and differentiate capital gain form ordinary income tax treatment on property dispositions.
    2. Outline the key elements of the §121 home sale exclusion explaining its application particularly the three proration safe harbors.
    3. Demonstrate the importance of the installment method, locate at least three §453 requirements, and define basic §453 terminology.
    4. Identify the variables that determine which §1038 rules apply, outline distinctions between personal and real property repossessions, and determine when a bad debt deduction may be taken on a repossession.
    5. Explain the tax treatment of a §1033 involuntary conversion by:
      a. Defining related terminology and the tax consequences of receiving a condemnation award or severance damages;
      b. Figuring gain or loss from condemnations and directing clients about the reporting of involuntary conversion payments; and
      c. Determining whether clients can postpone gain on condemned, damaged, destroyed, or stolen property and discussing the related party rule.
    6. Determine the scope of the §465 at-risk rules and their effect on property depreciation, and outline the requirements, mechanics, and types of §1031 like-kind exchange.
    7. Compare and contrast qualified deferred compensation plans and nonqualified plans by:
      a. Identifying the major benefit of the qualified deferred plans and explaining the basis of the benefits and contributions enabling the client to choose plan type and benefit; and
      b. Explaining the current and deferred advantages and disadvantages of corporate plans while warning of fiduciary responsibilities and prohibited transactions.
    8. Describe the requirements of the three basic forms of qualified pension plans permitting clients to compare and contrast such plans.
    9. Compare defined contribution and defined benefit plans, differentiate among five types of defined contribution plans, and describe their effect on retirement benefits.
    10. Contrast self-employed plans with qualified plans used by other business types identifying key choice of entity factors, and describe the requirements of IRAs and Roth IRAs.
    11. Define SEPs and SIMPLEs identifying the mechanics and eligibility requirements of each.
ASSIGNMENT SUBJECT
Chapter 4 Losses, AMT & Compliance

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

    * Passive loss rules
    * Suspension of disallowed losses under §469
    * Computing the alternative minimum tax
    * Minimum AMT tax credit
    * Reporting compliance rules and provisions
    * Accuracy related penalties
    * Information reporting penalty final regulations
    * Penalty for unrealistic position
    * Statute of limitations for assessments
    * Examination of returns
LEARNING OBJECTIVES:

After reading Chapter 4, participants will be able to:
    1. Identify the two basic income types and three “buckets” under §469, explain the suspension of disallowed losses including their relationship to total passive losses, and name six special transfers not deemed to be fully taxable dispositions.
    2. Differentiate the regular and alternative minimum tax computing the AMT by applying tax preferences and adjustments, define ADS asset lives, and compute, for AMT purposes, taxable income, passive loss, and ACE.
    3. Outline the reporting requirements for real estate transactions, independent contractors, and cash reporting to comply with government regulations.
    4. List four types of accuracy related and unrealistic position penalties, and explain IRS examination return policy and assessment process including applicable statute of limitations.
   

Course Contents - Go to Details

CHAPTER 1 - Individual Tax Elements

Federal Income Taxes: A Description

Rates, Tables, & Statutory Amounts

Income Tax Rates - §1

Standard Deduction - §63

Dependent Limit - §63(c)(5)

Marriage Penalty

Kiddie Tax - §1(g)

Election to Report on Parent’s Return

AMT Exemption

Personal Exemptions & Phaseout (2% Haircut) - §151

Limitation on Itemized Deductions (3% Haircut) - §68

Earned Income Credit - §32

Social Security & Self-Employment Earnings Base

Cents-Per-Mile Rates - Standard Mileage Rate

Qualified Transportation Fringes 

Passenger Automobile Depreciation Limits 

Expensing Deduction - §179 

Self-Employed Health Insurance Deduction 

Corporate Income Tax Rates 

Withholding & Estimated Tax 

Estimated Tax - §6654 

Payroll (FICA) & Self-Employment (SECA) Tax Reduction 

Filing Status 

Marital Status 

Single Taxpayers 

Divorced Persons 

Sham Divorce 

Annulled Marriages 

Married Taxpayers 

Marriage Penalty 

Spouse’s Death 

Married Persons Living Apart

Filing Jointly 

Joint Liability 

Innocent Spouse Exception 

Nonresident Alien 

Filing Separately 

Special Rules 

Joint Return after Separate Returns 

Separate Returns after Joint Return 

Exception 

Head of Household 

Advantages 

Requirements of §2(b)

Considered Unmarried 

Keeping Up a Home 

Qualifying Person 

Summary 

Qualifying Widow(er) With Dependent Child 

Gross Income 

Compensation 

Fringe Benefits 

Rental Income 

Advance Rent

Security Deposits 

Payment for Canceling a Lease 

Social Security Benefits 

Taxability of Benefits 

Alimony & Spousal Support

Requirements 

Recapture 

Child Support

Prizes & Awards - §74 & §274 

Dividends & Distributions 

Ordinary Dividends 

Money Market Funds 

Dividends on Capital Stock 

Dividends Used to Buy More Stock 

Qualified Dividends 

Capital Gain Distributions 

Undistributed Capital Gains 

Form 2439 

Basis Adjustment

Real Estate Investment Trusts (REITs)

Nontaxable Distributions 

Return of Capital

Basis Adjustment

Liquidating Distributions 

Distributions of Stock and Stock Rights 

Taxable Stock Dividends and Stock Rights 

Discharge of Debt Income 

Exceptions from Income Inclusion 

Reduction of Tax Attributes 

Order of Reductions 

Foreclosure 

Nonrecourse Indebtedness 

Recourse Indebtedness 

Mortgage Relief Act of 2007 

American Recovery & Reinvestment Act of 2009 Deferral - Expired 

Bartering 

Barter Exchange 

Backup Withholding 

Recoveries 

Itemized Deduction Recoveries 

Recovery Limited to Deduction 

Recoveries Included in Income 

Non-Itemized Deduction Recoveries 

Amounts Recovered for Credits 

Tax Benefit Rule 

Income Earned by Children 

Expenses 

AMT for Children 

Unearned Income of Children under 19 - §1(g) & (i) [Form 8615]

Application 

Definitions 

Tax Computation Steps 

Other Items & Situations 

Exclusions from Income 

Educational Savings Bonds - §135 

Income Exclusion 

Limitation 

MAGI

Notice 90-7 

Education Expenses 

Excludable Interest

Forms 8818 & 8815 

Scholarships & Fellowships - §117 

Definitions 

Scholarship Prizes 

Education Expenses 

Education Assistance Programs - §127 

Employer Educational Trusts - §83 

Qualified Tuition Programs (QTP) - §529 

Gift & Inheritance Exclusion 

Subsequent Income 

Divorce 

Business Gifts 

Employees 

Insurance 

Exceptions 

Purchase for Value 

Installment Payments 

Specified Number of Installments 

Specified Amount Payable 

Installments for Life 

Personal Injury Awards - §104 

Personal Injury 

Emotional Distress 

Punitive Damages 

Tax Benefit Rule - §111 

Interest State & Local Obligations - §103 

Foreign Earned Income Exclusion - §911 

Nonbusiness & Personal Deductions 

Itemized Deductions 

Limitation on Itemized Deductions - §68 

Personal & Dependency Exemptions 

Personal Exemptions 

Dependency Exemptions 

Before 2005 

After 2004 

Residency Test

Citizenship 

Relationship Test

Age Test

Joint Return Prohibition 

Exception 

Phaseout of Exemptions 

Interest Expense - §163 

Personal Interest - §163(h)(1)

Definition 

Deductibility 

Investment Interest Expense - §163(d)

Definitions 

Net Investment Income Limitation 

Qualified Residence Interest - §163(h)(3) [Form 8598]

Definitions 

Limitations 

Acquisition Indebtedness 

Home Equity Indebtedness 

Refinancing 

Home Improvements 

Timing 

Alternative Minimum Tax 

Points 

Home Purchase & Improvement Exception 

Refinancing 

Huntsman Case 

Mortgage Interest Statement - R.P. 92-11 

Allocation of Interest Expense 

Education Expenses 

Educational Transportation 

Educational Travel

Meal Expenses 

Investment Seminars 

Higher Education Expense Deduction (Expired) - §222 

Classroom Expenses for Teachers (Expired) - §62 

Medical Expense Deductions - §213 [Schedule A]

Items Deductible 

Items Not Deductible 

Medical Insurance Premiums 

Medicare A  

Medicare B  

Prepaid Insurance Premiums 

Meals & Lodging 

Expenses of Transportation 

Permanent Improvements 

Spouses, Dependents & Others 

Reimbursement of Expenses 

Long-Term Care Provisions 

Long-Term Care Payments - §7702B(d)(4)

Long-Term Care Premiums - §213(d)(10)

IRA Withdrawals for Certain Medical Expenses 

Charitable Contributions - §170 [Schedule A]

Requirements for Deductibility 

Qualified Organizations 

Limitations on Contributions 

Five-year Carryover

Contributions of Cash 

Benefits Received 

Benefit Performances 

Athletic Events 

Raffle Tickets, Bingo, Etc.

Dues, Fees, or Assessments 

Contribution of Property 

Clothing & Household Goods 

Ordinary Income or Short-Term Capital Gain Type Property 

Exception 

Capital Gain Type Property 

Exceptions 

Conservation Easements 

Loss Type Property 

Vehicle Donations 

Fractional Interests 

Other Types of Contributions 

Charitable Distributions from IRAs (Expired) - §408 

Substantiation 

Cash Contributions 

Contributions Less Than $250 

Contributions of $250 or More 

Payroll Deduction Records 

Noncash Contributions 

Deductions of Less Than $250 

Additional Records 

Deductions of At Least $250 But Not More Than $500 

Deductions Over $500 But Not Over $5,000 

Deductions over $5,000 

Contributions over $75 Made Partly for Goods or Services 

Deduction for Taxes - §164 [Schedule A]

Income Taxes 

Real Property Tax 

Accrual Method Taxpayers 

Standard Deduction for Real Property Taxes (Expired) - §63(c)(1)

State & Local Sales Tax Deduction (Expired) - §164 

Actual Expenses 

Sales Tax Deduction for Qualified Vehicles (Expired)

Personal Property Tax 

Other Deductible Taxes 

Examples of Non-Deductible Taxes 

Casualty & Theft Losses - §165 [Schedule A]

Definitions 

Proof of Loss 

Amount of Loss

Insurance & Other Reimbursements 

Limitations 

Allocation for Mixed Use Property 

Standard Deduction for Disaster Losses (Expired) – §63(c)

Miscellaneous Deductions - §67 [Schedule A]

Deductions - Subject to 2% Limit

Deductions Not Subject To 2% Limit

Nondeductible Expenses 

Moving Expenses - §217 

Distance Test

Time Test

Time Test for Employees 

Time Test for Self-employment

Deductible Expenses 

Travel Expenses 

Travel by Car

Location of Move 

Reporting 

Reimbursements 

Credits 

Dependent Care Tax Credit - §21 [Form 2441]

Eligibility 

Employment Related Expenses 

Qualifying Out-of-the-home Expenses 

Payments to Relatives 

Allowable Amount

Dependent Care Assistance - §129 

Reporting 

Earned Income Credit - §32 [Form 1040]

Persons with One or More Qualifying Children 

Persons without a Qualifying Child 

Computation 

Phaseout

Advance Payment of Earned Income Credit (Expired) - §3507(b)(2)

Adoption Credit & Exclusion - §36C & §137 

Exclusion from Income for Employer Reimbursements 

Child Tax Credit - §24 

Credit Amount

Qualifying Child 

Phase out

Refundable Child Care Credit Amount

AMT & Child Tax Credit

First-Time Homebuyer Credit (Expired) - §36 

Making Work Pay Credit (Expired) - §36A  

Hope & Lifetime Learning Credits - §25A  

Lifetime Learning Credit

Hope Credit

“American Opportunity” Education Tax Credit

Ministers & Military - §107 

Clergy 

Rental Value of a Home 

Members of Religious Orders 

Military & Veterans 

Wages - §61 

Nontaxable Income - §134 

Veterans’ Benefits - §134 

CHAPTER 2 - Expenses, Deductions & Accounting

Landlord's Rental Expense

Reporting Rental Property Expenses (Repealed) - §6041

Repairs & Improvements

Repairs

Improvements

Salaries & Wages

Rental Payments for Property & Equipment

Insurance Premiums

Local Benefit Taxes & Service Charges

Travel & Local Transportation Expenses

Tax Return Preparation

Other Expenses

Tenant's Rental Expense

Rent Paid in Advance

Lease or Purchase

Determining the Intent

Taxes on Leased Property

Cash Method

Accrual Method

Cost of Acquiring a Lease

Option to Renew - 75% Rule

Cost of a Modification Agreement

Commissions, Bonuses, & Fees

Loss on Merchandise & Fixtures

Improved Leased Property

Construction Allowances Provided To Lessees - §110

Assignment of a Lease

Capitalizing Rent Expenses 

Health Insurance Costs of Self-Employed Persons - §162(l) [Schedule C]

Requirements for Eligibility 

Amount Deductible 

Percentage 

Hobby Loss Rules - §183 [Schedule C]

Allowable Deductions 

Limited Deductions 

Profit Motive Presumptions 

Special Rule for Horse Breeding 

Other Factors 

Self-Employment Taxes - §3111 & §3121 

Home Office Deduction - §280A [Schedule C]

Requirements 

Deductible Expenses 

Employee's Home Leased To Employer

Residential Phone Service 

Allocations 

Room v. Square Footage 

Limitations 

Expanded Principal Place of Business Definition 

Business & Investment Credits 

Business Credit Carryback & Carryforward Rules - §39(a)

NOL Comparison - §172 

Travel & Entertainment

Travel Expenses 

Determining a Tax Home - Travel Expenses 

Tax Home 

Regular Place of Abode in a Real & Substantial Sense 

Two Work Locations 

Temporary Assignment

Rigid One-Year Rule 

Away From Home - Travel Expenses 

Sleep & Rest Rule 

Substantial Period 

Business Purpose - Travel Expense 

Categories of Expense 

Travel Costs 

Costs at Destination 

All or Nothing 

Time 

51/49 Rule 

Foreign Business Travel

Personal Pleasure 

Primarily Business 

Full Deduction Exception 

Limitations - Travel Expenses 

Meals & Lodging 

Domestic Conventions & Meetings 

Foreign Conventions & Meetings 

Cruise Ship Convention 

Eligible Expenses - Entertainment

Test #1 - "Directly Related"

Test #2 - "Associated With"

Test #3 - Statutory Exceptions 

Expense for Spouses Of Out Of Town Business Guests 

Entertainment Facilities 

Home Entertainment Expenses 

Limitations - Entertainment

Exceptions 

Ticket Purchases 

Charitable Sports Events Exception 

Skyboxes 

One Event Rule 

Related Parties 

Food & Beverages 

Substantiation 

Travel Expense Substantiation 

Entertainment & Meal Expense Substantiation 

Business Gifts Expense Substantiation 

Substantiation Methods 

Adequate Records 

Sufficiently Corroborated Statements 

Exceptional Circumstances 

Retention of Records 

Exceptions to Substantiation Requirements 

Employee Expense Reimbursement & Reporting 

When an Employee Needs to File Form 2106 

Employee Expense Reimbursement & Reporting 

Family Support Act of 1988 

Remaining Above-The-Line Deduction 

Accountable Plans 

Reasonable Period of Time 

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 

Local Transportation 

Assignments within Work Area 

Old Revenue Ruling 90-23 (Superseded)

Temporary Work Site Definition 

Reserve Units 

Revenue Ruling 99-7 

Automobile Deductions 

Eligible Expenses 

Apportionment of Personal & Business Use 

Actual Cost Method 

Depreciation & Expensing 

Placed in Service 

Half-year Convention 

Quarterly Convention Exception 

MACRS 

Double Declining Balance Method 

Depreciation "Caps"

Temporary Increases (Bonus) in Depreciation Caps 

Expensing Limit

Predominate Business Use Rule 

Qualified Business Use 

More Than 50% Use Test

Limitations 

Recapture 

ITC Recapture 

Excess Depreciation Recapture 

Leasing Restrictions 

Standard Mileage Method 

Limitations 

Alternating Use 

Switching Methods 

Charitable Transportation 

Medical Transportation 

Gas Guzzler Tax - §4064 

Automobiles 

Limousines 

Vehicles Not Subject To Tax 

Fringe Benefits 

Excluded Fringe Benefits 

Prizes & Awards - §74 

Group Life Insurance Premiums - §79 

Personal Injury Payments - §104 

Employer Contributions to Accident and Health Plans - §106 & §105 

Partnerships & S Corporations - R.R. 91-26 

Health Insurance & FICA - Announcement 92-16 

Meals & Lodging - §119 

Cafeteria Plans - §125 

Educational Assistance Programs - §127 

Dependent Care Assistance - §129 

No-Additional Cost Services - §132(b)

Qualified Employee Discounts - §132(c)

Working Condition Fringe Benefits - §132(d)

Transportation in Unsafe Areas 

De Minimis Fringe Benefits - §132(e)

Employer Provided Automobile 

Annual Lease Value Method 

Cents Per Mile Method 

Commuting Value Method 

Methods of Accounting - §446 

Cash Method 

Constructive Receipt

Accrual Method 

Advance Payments 

Accrual Method Required 

Other Methods of Accounting 

Hybrid Methods 

Long Term Contracts - §460 

Percentage of Completion 

Percentage of Completion - Capitalized Cost Method 

Look-back Rule 

Uniform Capitalization - §263A  

Annual Sales Limit

Artist Exception 

Classification of Property 

Costs 

Self Constructed Assets 

Allocation Method 

Manufactured Products 

Interest

Change in Accounting Method 

Accounting Periods 

Definitions 

Taxable Years 

No Books Kept

New Taxpayer

Partnership 

S Corporations 

Personal Service Corporations 

C Corporations 

Business Purpose Exception 

Section 444 Election 

Partnerships & S Corporations 

Personal Service Corporations 

Tiered Structures 

Expensing - §179 

Placed In Service 

Qualifying Property 

Purchase Restrictions 

Section 1245 Property 

Property Used Primarily for Lodging 

Deduction Limit

Maximum Dollar Limit

Investment Limit

Taxable Income Limit

Carryover of Unallowable Deduction 

Married Taxpayers Filing Separate Returns 

Passenger Automobiles 

Partnerships 

S Corporations 

Cost

Election 

Records 

Revocation of Election 

Figuring the Deduction 

Recapture of §179 Deductions 

Dispositions 

Installment Sales 

Depreciation & Cost Recovery - §167 & §168 

Personal Property 

ACRS - §168 

Applicable Percentage 

Straight-line Election 

MACRS 

Elections 

MACRS Conventions 

Mid-quarter Convention Exception 

Recapture - §1245 

Bonus (or Additional First-year) Depreciation - §168 

50% Additional First-year Depreciation 

100% Additional First-year Depreciation 

Qualified Property 

Depreciation Limits on Business Vehicles 

Credits in Lieu of Depreciation 

Nonqualified Property 

Real Property 

ACRS 

MACRS 

Leasehold Improvements 

Qualified Leasehold Improvement Property (Expired) - §168(e)(3)(E)(iv)

Qualified Retail Improvement Property (Expired) - §168(e)(E)(ix)

15-Year Restaurant Improvements (Expired) - §168 

Recapture - §1250 & §1245 

Section 1245 

Full Recapture 

Section 1250 

Partial Recapture 

MACRS Recapture Exception for Real Property 

Alternative Depreciation System - §168(g)

Mandatory Application 

Method 

Amortization 

Costs Eligible for Amortization 

Trademarks & Trade Names - §167(r)

Methods & Periods for Amortization 

Partnership & Corporate Organization Costs - §709 & §248 

Business Start-Up Costs - §195 

Depletion - §613 

Other Assets 

CHAPTER 3 - Property Transfers & Retirement Plans

Sales & Exchanges of Property

Sale or Lease

Easements

Capital Gains & Losses

Capital Assets - §1221

Capital Gain Rates

Holding Periods - (§1222 & §1223)

Capital Losses - §1211

Business Property

Basis of Property

Basis Adjustments

Property Received as a Gift

Property Received by Inheritance

Changes in Property Usage

Stocks & Bonds

Sale of Personal Residence - §121 

Two-Year Ownership & Use Requirements 

Tacking of Prior Holding Period 

Prorata Exception 

Limitations on Exclusion 

Reduced Home Sale Exclusion for Periods of Nonqualified Use 

Surviving Spouse Home Sale Exclusion 

Installment Sales - §453 

General Rules 

Dealer Sales 

Unstated Interest

Related Parties - §453(e)

Disposition of Installment Notes - §453B  

Determining Installment Income 

Pledge Rule 

Escrow Account

Depreciation Recapture 

Like Kind Exchange 

Repossessions - §1038 

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 

Bad Debt

Seller’s Former Home Exception 

Involuntary Conversions - §1033 

Condemnations 

Threat of Condemnation 

Reports of Condemnation 

Property Voluntarily Sold 

Easements 

Condemnation Award 

Amounts Withheld From Award 

Net Condemnation Award 

Interest on Award 

Payments to Relocate 

Severance Damages 

Treatment of Severance Damages 

Expenses of Obtaining an Award 

Special Assessment Withheld from Award 

Severance Damages Included in Award 

Gain or Loss from Condemnations 

How to Figure Gain or Loss 

Part Business or Part Rental

Postponement of Gain 

Choosing to Postpone Gain 

Cost Test

Replacement Period 

Condemnation 

Replacement Property Acquired Before the Condemnation 

Extension 

Time for assessing a deficiency 

At Risk Limits for Real Estate - §465 

Amount At Risk 

Qualified Nonrecourse Financing 

Section 1031 Like Kind Exchanges 

Statutory Requirements & Definitions 

Qualified Transaction - Exchanges v. Sales 

Held for Productive Use or investment

Investment Purpose 

Statutory Exclusions from §1031 

Like Kind Property 

Nature or Quality of Property 

Real v. Personal Property 

The Concept of “Boot” 

Realized Gain 

Recognized Gain 

Limitation on Recognition of Gain under §1031 

The Definition of “Boot” 

The Rules of “Boot” 

Property Boot

Mortgage Boot

Netting “Boot” - The Rules of Offset

Property Boot Given Offsets Any Boot Received 

Mortgage Boot Given Offsets Mortgage Boot Received 

Mortgage Boot Given Does Not Offset Property Boot Received 

Revenue Ruling 72-456 & Commissions 

Gain or Loss on Boot

Basis on Tax-Deferred Exchange 

Allocation of Basis 

Installment Reporting of Boot

Exchanges Between Related Parties 

Reporting an Exchange 

Types of Exchanges 

Two-Party Exchanges 

Three-Party “Alderson” Exchange 

Three-Party “Baird Publishing” Exchange 

Delayed Exchanges 

45-Day Rule 

Method of Identification 

180-Day Rule 

Final Regulations for Delayed (Deferred) Exchanges 

Deferred (Delayed) Exchange Definition 

Identification Requirements 

Identification & Exchange Periods 

Method of Identification 

Property Description 

Revocation 

Substantial Receipt

Multiple Replacement Properties 

Actual & Constructive Receipt Rule 

Four Safe Harbors 

Safe Harbor #1 - Security 

Safe Harbor #2 - Escrow Accounts & Trusts 

Safe Harbor #3 - Qualified Intermediary 

Safe Harbor #4 - Interest

Exchanges of Partnership Interests 

Retirement Plans 

Qualified Deferred Compensation 

Qualified v. Nonqualified Plans 

Major Benefit

Current Deduction 

Timing of Deductions 

Part of Total Compensation 

Compensation Base 

Salary Reduction Amounts 

Benefit Planning 

Pension Protection Act of 2006 

Corporate Plans 

Advantages 

Current

Deferred 

Disadvantages 

Employee Costs 

Comparison with IRAs & Keoghs 

Basic ERISA Provisions 

ERISA Reporting Requirements 

Fiduciary Responsibilities 

Bonding Requirement

Prohibited Transactions 

Additional Restrictions 

Fiduciary Exceptions 

Loans 

Employer Securities 

Excise Penalty Tax 

PBGC Insurance 

Sixty-Month Requirement

Recovery Against Employer

Termination Proceedings 

Plans Exempt from PBGC Coverage 

Basic Requirements of a Qualified Pension Plan 

Written Plan 

Communication 

Trust

Requirements 

Permanency 

Exclusive Benefit of Employees 

Highly Compensated Employees 

Reversion of Trust Assets to Employer

Participation & Coverage 

Age & Service 

Coverage 

Percentage Test

Ratio Test

Average Benefits Test

Numerical Coverage 

Related Employers 

Vesting 

Full & Immediate Vesting 

Minimum Vesting 

Diversification Rights 

Nondiscrimination Compliance 

Contribution & Benefit Limits 

Defined Benefit Plans (Annual Benefits Limitation) - §415 

Defined Contribution Plans (Annual Addition Limitation) - §415 

Limits on Deductible Contributions - §404 

Assignment & Alienation 

Miscellaneous Requirements 

Basic Types of Corporate Plans 

Defined Benefit

Mechanics 

Defined Benefit Pension 

Defined Contribution 

Mechanics 

Discretion 

Favorable Circumstances 

Types of Defined Contribution Plans 

Profit Sharing 

Requirements for a Qualified Profit Sharing Plan 

Written Plan 

Eligibility 

Deductible Contribution Limit

Substantial & Recurrent Rule 

Money Purchase Pension 

Cafeteria Compensation Plan 

Thrift Plan 

Section 401(k) Plans 

Death Benefits 

Defined Benefit Plans 

Money Purchase Pension & Target Benefit Plans 

Employee Contributions 

Non-Deductible 

Life Insurance in the Qualified Plan 

Return 

Universal Life 

Compare 

Plan Terminations & Corporate Liquidations 

10-Year Rule 

Lump-Sum Distributions 

Asset Dispositions 

IRA Limitations 

Self-Employed Plans - Keogh 

Contribution Timing 

Controlled Business 

General Limitations 

Effect of Incorporation 

Mechanics 

Parity with Corporate Plans 

Figuring Retirement Plan Deductions For Self-Employed 

Self-Employed Rate 

Determining the Deduction 

Individual Plans - IRA’s 

Deemed IRA  

Mechanics 

Phase-out

Special Spousal Participation Rule - §219(g)(1)

Spousal IRA  

Eligibility 

Contributions & Deductions 

Employer Contributions 

Retirement Vehicles 

Distribution & Settlement Options 

Life Annuity Exemption 

Minimum Distributions 

Required Minimum Distribution 

Required Minimum Distribution Rules Waiver (Expired) - §401 

Definitions 

Distributions during Owner’s Lifetime & Year of Death after RBD  

Sole Beneficiary Spouse Who Is More Than 10 Years Younger

Distributions after Owner’s Death 

Inherited IRAs 

Estate Tax Deduction 

Charitable Distributions from IRAs (Expired) - §408 

Post-Retirement Tax Treatment of IRA Distributions 

Income In Respect of a Decedent

Estate Tax Consequences 

Losses on IRA Investments 

Prohibited Transactions 

Effect of Disqualification 

Penalties 

Borrowing on an Annuity Contract

Tax-Free Rollovers 

Rollover from One IRA to Another

Waiting Period between Rollovers 

Partial Rollovers 

Rollovers from Traditional IRAs into Qualified Plans 

Rollovers of Distributions from Employer Plans 

Withholding Requirement

Waiting Period between Rollovers 

Conduit IRAs 

Keogh Rollovers 

Direct Rollovers from Retirement Plans to Roth IRAs 

Rollovers of §457 Plans into Traditional IRAs 

Rollovers of Traditional IRAs into §457 Plans 

Rollovers of Traditional IRAs into §403(B) Plans 

Rollovers from SIMPLE IRAs 

Nonspouse Rollovers 

Roth IRA - §408A  

Eligibility 

Contribution Limitation 

Roth IRAs Only 

Roth IRAs & Traditional IRAs 

Conversions 

AGI Limit Exception Repealed 

Recharacterizations 

Reconversions 

Taxation of Distributions 

No Required Minimum Distributions 

Simplified Employee Pension Plans (SEPs)

Contribution Limits & Taxation 

SIMPLE Plans 

SIMPLE IRA Plan 

Employee Limit

Other Qualified Plan 

Set up 

Contribution Limits 

Salary Reduction Contributions 

Employer Matching Contributions 

Deduction of Contributions 

Distributions 

SIMPLE §401(k) Plan 

CHAPTER 4 - Losses, AMT & Compliance

Passive Losses

Prior Law

Passive Loss Rules

Application

Active Losses

Credits

Calculating Passive Loss

Categories of Income & Loss

Passive

Portfolio

Material Participation

Self-Charged Interest Regulations

Passive Deduction - Portfolio Income

Regulations

Suspension of Disallowed Losses 

Fully Taxable Disposition 

Abandonment & Worthlessness 

Related Party Transactions 

Credits 

Disallowance 

Increase Basis Election 

Entire Interest

Partnership 

Grantor Trust

Other Transfers 

Transfer By Reason Of Death - §469(g)(2)

Transfer by Gift - §469(j)(6)

Installment Sale - §469(g)(3)

Activity No Longer Treated As Passive Activity - §469(f)(1)

Closely Held To Nonclosely Held Corporation- §469(f)(2)

Nontaxable Transfer

Ordering of Losses 

Capital Loss Limitation 

Carryforwards 

Allocation of Suspended Losses 

Taxpayers Affected 

Noncorporate Taxpayers 

Regular Closely Held Corporations 

Personal Service Corporations 

Definition 

Real Estate Professionals 

Activities 

Facts & Circumstances Test

Relevant Factors 

Rental Activities 

Limited Partnership Activities 

Partnership & S Corporation Activities 

Consistency 

Regrouping 

Partial Dispositions 

Alternative Minimum Tax - §55 

Computation 

Exemption Amount - §55(d)

AMT Exemption Phaseout

Regular Tax Deduction - §55(c)

Tax Preferences & Adjustments 

Preferences & Adjustments for All Taxpayers 

Preferences & Adjustments for Noncorporate Taxpayers Only 

Preferences & Adjustments for Corporations Only 

Adjustments - §56 

Itemized Deductions 

Standard Deduction 

Medical Expenses 

Taxes 

Interest

Personal Exemptions 

Depreciation 

Alternative Depreciation System (ADS)

ADS Recovery Periods 

Asset Placed in Service After 1998 

Mining Exploration and Development Costs 

Basis 

Election 

Long-Term Contracts 

Home Construction Contracts 

Pollution Control Facilities 

Installment Sales 

Circulation Expenditures 

Incentive Stock Options 

Credit for Prior Year Minimum Tax & ISOs 

Research and Experimental Expenditures 

Passive Farm Losses 

Definition 

Loss Disallowance 

Allocation 

Same Activity Suspension 

Passive Activity Losses 

Business Untaxed Reported Profits (Pre-1990)

ACE Adjustment (Post-1989)

Adjusted Current Earnings Regulations 

Tax Preferences - §57 

Depletion 

Intangible Drilling Costs 

Excess Drilling Costs 

Accelerated Depreciation 

Real Property 

Personal Property 

Private Activity Bond Interest

Alternative Tax NOL Deduction 

Carrybacks & Carryovers 

Alternative Minimum Foreign Tax Credit

Foreign Tax Credit Carryback or Carryover

Tentative Minimum Tax 

Minimum Tax Credit

Regular Income Tax Reduced 

Carryforward of Credit

Other Credits 

Compliance 

Reporting Requirements 

Real Estate Transactions [Form - 1099S]

Independent Contractors 

Cash Reporting [Form 8300]

Exceptions 

Recipient’s Knowledge 

Cash Reporting Rules - Attorneys 

Sale of Certain Partnership Interests (Form 8308)

Tax Shelter Registration Number [Form 8271]

Asset Acquisition Statement [Form 8594]

Accuracy-Related Penalties 

Negligence 

Substantial Understatement of Income Tax 

Penalty on Carryover Year Return 

Substantial Valuation Overstatements 

Substantial Estate & Gift Tax Valuation Understatements 

Final Regulations 

Negligence or Disregard of Rules 

Substantial Understatement Penalty 

Adequate Disclosure 

Information Reporting Penalty Final Regulations 

Penalty for Unrealistic Position 

Realistic Possibility Standard 

Adequate Disclosure 

Form 8275-R  

Statute of Limitations for Assessments 

Three Year Assessment Periods 

Six Year Assessment Period 

No Statute Of Limitations 

Extension of Statute Of Limitations 

Examination of Returns 

How Returns Are Selected 

Arranging the Examination 

Transfers 

Representation 

Recordings 

Repeat Examinations 

Changes to Return 

Appealing Examination Findings 

Appeals Office 

Appeals to the Courts 

Court Decisions 

Recovering Litigation Expenses 

Other Remedies 

Claims for Refund 

Cancellation of Penalties 

Reduction of Interest

 

Glossary

 

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