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Course Details

Asset Protection - Tax and Financial Aspects (Course Id 99)

Updated / QAS / Registry / EA
  Add to Cart 
Author : Danny C Santucci, JD
Course Length : Pages: 142 ||| Review Questions: 120 ||| Final Exam Questions: 115
CPE Credits : 23.0
IRS Credits : 23
Price : $141.95
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 99

Description :

This informative course covers traditional planning tools and their utilization to protect assets. The Uniform Fraudulent Conveyance Act, the Bankruptcy Code, and various aspects of the tax law are highlighted in describing asset protection aspects of corporations, partnerships, limited liability companies, family partnerships, trusts, retirement plans, insurance products, and other conventional tools. Special topics include protection against lawsuits, costs of long-term illness, divorce settlements, foreign asset protection trusts, statutory protections, homestead provisions, exempt assets, cancellation of indebtedness taxation, and marital agreements.

Usage Rank : 17895
Release : 2023
Version : 1.0
Prerequisites : General understanding of federal income taxation.
Experience Level : Overview
Additional Contents : Complete, no additional material needed.
Additional Links :
Advance Preparation : None.
Delivery Method : QAS Self Study
Intended Participants : Anyone needing Continuing Professional Education (CPE).
Revision Date : 14-Oct-2023
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 - 99

Keywords : Taxes, Asset, Protection, Tax, Financial, Aspects, 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.

Chapter 1                Introduction to Asset Protection

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

    * Situations that create danger
    * Sources of lawsuits
    * Types of liability
    * Basic protection concepts
    * Types of creditors
    * Badges of fraud
    * Statute of limitations & criminal penalties
    * Permissible asset transfers
    * Asset protection goals
    * Preparation for asset protection
Learning Objectives:

       After reading Chapter 1, participants will be able to:
    1. Specify the goals and purposes of asset protection, the objections some people have about shielding assets from creditors, and reasons for asset protection.
    2. Identify situations that can unexpectedly put assets and financial security at stake and the common sources of lawsuits.
    3. Recognize the author's concept of exploding and imploding liability how dealing with them is necessary for a complete asset protection plan, and the concepts of insurance, asset placement, and statutory protections when ap-plied to asset protection.
    4. Specify the types of creditors associated with asset protection and fraudulent transfers recognizing their salient characteristics.
    5. Identify the fraudulent transfer provisions which protect current and fu-ture creditors, the badges of fraud in the Uniform Fraudulent Transfer Act, applicable statutes of limitation, potential criminal penalties associated with fraudulent transfers, and the differences between fraudulent asset transfers and permissible asset transfers.
    6. Determine net worth using a balance sheet, identify asset values, and show the preparation of a balance sheet in the context of determining the depth and scope of suitable asset protection planning.
Chapter 2                Insurance

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

    * Homeowner’s, automobile, and disability insurance
    * Life insurance
    * Annuities
    * Buy-sell agreements
    * Entity & cross-purchase agreements
    * Purchase price & terms
    * Community property
    * Professional corporations
    * S corporations
    * Sole shareholder planning
Learning Objectives:

       After reading Chapter 2, participants will be able to:
    1. Identify characteristics of homeowner's, automobile, and disability insurance and what asset protection they may offer.
    2. Specify persons in which rights are placed by life insurance and reasons to purchase life insurance and the benefits, uses, and types of life insurance, identify variables that influence when life insurance is taxable for federal estate tax purposes, and cite reasons for establishing an irrevocable life insurance trust in order to achieve several estate tax planning advantages.
    3. Determine what constitutes an annuity and the types and characteristics of annuities specifying their tax advantages and disadvantages.
    4. Identify entity purchase and cross-purchase agreements recognizing tax and legal advantages and pitfalls.
Chapter 3                Asset Placement

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

    * Individual titles & sole proprietorship
    * Categories of C corporations
    * S corporations
    * Types of trusts
    * Trust taxation
    * Co-tenancy
    * Partnership taxation & recapitalization
    * Family partnerships
    * Limited liability companies
    * Retirement plans
Learning Objectives:

       After reading Chapter 3, participants will be able to:
    1. Recognize ways to hold property, what taxpayers must do before beginning an asset protection program, and the advantages and disadvantages of holding property individually and through a sole proprietorship specifying how these pitfalls can be avoided.
    2. Identify guidelines that corporate business owners should follow to protect their corporations, issues regarding potential personal liability for shareholders, officers, and directors, protection ideas for corporate business owners, and §469 passive loss restriction considerations.
    3. Specify the advantages and disadvantages of using a corporation in asset protection planning, the differences among categories of C Corporations, recognize the importance of S corporations and their estate tax planning advantages, and determine the advantages and disadvantages of transferring farmland to a corporation.
    4. Identify testamentary trusts, living trusts recognizing subcategories of trusts, and changes necessary when used for asset protection.
    5. Determine how different trusts are taxed with regard to income tax, estate tax, and gift tax, identify the grantor trust rules and the effect of the treatment on owners for income tax purposes, and specify the tax consequences of several trust types.
    6. Recognize the various types of co-tenancy and their impact on asset protection and tax liability.
    7. Identify partnerships and their types, ways that partnerships may be better than corporations from an estate-planning viewpoint, how partnerships are taxed, how estate freezing works to minimize death taxes, and the structuring of family partnerships.
    8. Specify the advantages and disadvantages of a limited liability company (LLC), problems associated with its newness, and how professional firms, joint ventures, and families can benefit from establishing LLCs.
    9. Recognize how retirement plans can be used to provide substantial lifetime benefits to a business owner and to employees while simultaneously providing asset protection.
    10. Identify important characteristics of custodianship and estates as asset protection tools.
Chapter 4                Bankruptcy

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

    * Tax law changes
    * Bankruptcy types
    * Automatic stay
    * Preferences
    * Priorities
    * Debt discharge
    * Individual bankruptcy estate
    * Individual debtor
    * Corporate bankruptcy
    * Homesteading & garnishment
Learning Objectives:

       After reading Chapter 4, participants will be able to:
    1. Determine how the 2005 Bankruptcy Act changed procedures, qualifications, and tax law, and identify the most common bankruptcy types recognizing their influence on how an individual or business “goes bankrupt.”
    2. Specify the rules for automatic stay and levy and their impact on “freezing” creditor activity, tax assessment, and collection.
    3. Identify the differences between preferential and nonpreferential payments specifying the priority of creditor claims.
    4. Recognize when debt is discharged under various bankruptcy types and how to establish an individual bankruptcy estate determining its taxable income and filing requirements, and identify the special rules that apply to individual debtors, partnership bankruptcies, and corporate bankruptcies.
    5. Specify debts covered under homesteading, and determine permissible garnishment amounts recognizing special garnishment rules.
Chapter 5                Avoiding Tax on Debt Cancellation & Foreclosure

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

    * Qualified farm debt exclusion
    * 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
Learning Objectives:

       After reading Chapter 5, participants will be able to:
    1. Recognize the effect that debt cancellation has on net worth and potential income inclusion from cancellation of indebtedness income, and specify exceptions to the general income inclusion rule and their tax impact.
    2. Identify tax attribute reductions and 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 identifying 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 6                Divorce Settlements & Divisions

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

    * Premarital agreements
    * Application of §1041
    * Incident to divorce
    * Property basis
    * Purchase of residence between spouses
    * Purchase of business & investment property between spouses
    * Division of corporate business interests
    * Division of partnership business interests
    * Deferred v. present division of benefits
    * Individual retirement arrangements
Learning Objectives:

       After reading Chapter 6, participants will be able to:
    1. Identify the formats that courts typically follow if a couple does not have a premarital agreement and post-nuptial and premarital agreements including how they relate to divorce settlements and divisions.
    2. Determine the application of §1041 to interspousal transfers, the tax trap of deferred tax liability, and the transferor’s and transferee’s property basis under §1041(b).
    3. Specify the deferred gain or loss associated with selling an interest in the marital residence, recognize the application of §1041 to selected business, retirement, and investment assets, and identify conditions that must be met for a like-kind exchange to be nontaxable.
    4. Recognize tax consequences resulting from the division of certain types of property between spouses or former spouses incident to divorce, and identify the elements of a Qualified Domestic Relations Order (QDRO).
Chapter 7                Protecting Assets from Old Age & Catastrophic Illness

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

    * Managing the estate
    * Medicare
    * Medicaid & countable assets
    * Medicaid & non-countable assets
    * Medicaid & inaccessible assets
    * Private insurance
    * Healthcare decisions
    * Supplemental Security Income
    * Income & assets
    * Disability benefits
Learning Objectives:

       After reading Chapter 7, participants will be able to:
    1. Specify ways to manage an incompetent person’s estate, determine joint tenancy and its benefits, and identify the levels of conservatorship that can influence assistance in management and protection of an estate and/or personal care.
    2. Recognize the concept of durable power specifying how to maximize its use, and identify funded revocable living trust variations and their advantages.
    3. Determine eldercare benefits of Medicare and Medicaid, countable income, and asset groups under Medicaid.
    4. Identify possible health care decisions such as having a living will, determine the distinctions between Supplemental Security Income and Social Security disability benefits, identify asset groups for SSI, and specify requirements for SSI and Social Security disability benefits.
Course Contents :

Chapter 1 - Introduction to 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


Chapter 2 - Insurance

Homeowners Insurance

Automobile Insurance

Disability Insurance

Life Insurance


Tax Overview

Income Tax

Transfer for Value Rule

Employee Death Benefit - §101(b) Repealed


Lifetime Benefits

Section 72

Estate Taxes - §2042 & §2035(a)


Gift Taxes

Community Property Gift Danger

Life Insurance Trust



Deferred Annuity

Private Annuity

Unsecured Promise

Regulations Restrict Private Annuities

Buy-Sell Agreements


Contractual Format


Life Insurance Funding

Term vs. Whole Life

Policy Ownership & Premium Payment

Entity & Cross-Purchase Agreements

Tax Consequences - Cross-Purchase Agreements

Non-Deductible Premiums

No Dividend Danger

Tax Consequences - Entity Purchase Agreements

Non-Deductible Premiums

Dividend Danger - §302

Exception to Dividend Treatment

Constructive Ownership (Attribution) Rules

“Estate/Beneficiary” Rule

“Family/Trust/Corporation” Rule

No Gain on Sale

Estate Tax Valuation

Using the Buy-Sell Agreement to Set Value

Buy-Sell Agreements - §2703

Exceptions to §2703

Arms-Length Bargain

Substantial Modifications


Purchase Price & Terms


Community Property

Professional Corporations

Marketability Problems

Controlled Disposition

S Corporations

Sole Shareholder Planning

Complete Liquidations

Alternative Dispositions

Use of Life Insurance

Estate Valuation

One-Way Buy-Outs

Chapter 3 - Asset Placement

Ownership Vehicles & Entities

Individual Titles & Sole Proprietorship


Marital Property

Timing & Domicile

Community Property

Tax Basis Advantage

Sole Proprietorship


Categories of C Corporations

Personal Holding Company - §541

Attribution Rules

Penalty Tax

C Corporation

No Pass-Through

Getting Money Out of the C Corporation

Passive Loss Restrictions

Partnership vs. Corporation

Personal Service Corporation - §269A

The S Corporation - §1361

Minors as Shareholders

Bequests & Estate Ownership

Trusts as Shareholders

S Corporation Assets

Built-In Gains Tax - §1374

Incorporation of a Farm

Land Partnership Advantage



Types of Trusts

Revocable Trust

Land Trusts

Irrevocable Trusts

Testamentary Trust

Business Trusts

Foreign Trusts - §679

Grantor Trust Rules - §§671 through 679

Asset Protection Trusts - APTs

Foreign Jurisdictions


Income Taxation

Estate & Gift Tax

Creditor Protection

Family Trusts

Medicaid Trusts

Living Trust


Advantages of a Living Trust



Pour-Over Will

Trust Taxation

Income Tax

Grantor Trusts - §671 to §678

Grantor Retained Income Trust

Irrevocable Trust Taxation

Throwback Rules

Capital Gains

Deduction of Estate Planning Expenses

Deductibility of Death Expenses

Domestic Trust Exemptions

Gift Tax

Estate Tax

Unlimited Marital Deduction

Outright to Spouse

Marital Deduction (QTIP) Trust

Qualified Terminable Interest Trust

“A-B” Format

“A-B-C” (QTIP) Format

Valuation & Tax Basis

Alternate Valuation

Choice of a Trustee

Corporate Trustee Factors

Individual Trustee Factors


Tenancy in Common

Percentage Interests

No Survivorship

Joint Tenancy with Right of Survivorship


Percentage Interests

Tenants by the Entirety



Partnership Taxation

Allocation of Income & Deduction

Partnership Recapitalization

Two Class Format


Guaranteed Payment

Control & Management

Estate Issues

Family Partnerships

Charging Orders

Phantom Income to Creditor

Tax Issues

Estate Savings

Income Tax Savings

Family Partnership Requirements

Recognizing a Partner



Donee as a Partner

Trusts as Partners

Minor As a Partner

Purchased Interests

Capital Interest in the Partnership

Capital as a Material Income Producing Item

Source of Capital

Family Partnerships Not Within §704(e)

Real Estate Family Partnerships

Business Family Partnerships

Structuring the Family Partnership

Limited Liability Company

Outside Basis & Debt Share Advantage

Substantial Economic Effect Rules

Discharge of Indebtedness Income

Suggested Uses

Professional Firms

Joint Ventures

Substitute for Family Limited Partnership

Retirement Plan

Plan Types

Retirement Fund Protection in Bankruptcy

Employer Costs

Profit-Sharing Plan

Money Purchase Pension Plan

Defined Benefit Pension Plan



Chapter 4 - Bankruptcy

Federal Bankruptcy

Means Testing

Median State Income Test

Means Test

Credit Counseling

Tax Law Changes

Chapter 13 "Superdischarge"

Subordination Of Ad Valorem Tax Liens

Interest on Tax Claims

Tax Returns

Bankruptcy Types

Chapter 7 - Liquidation

Exempt Assets


Trustee Appointment

Chapter 11- Reorganization


Creditors’ Committee

Reorganization Plan

Chapter 13 - Wage-Earner Plan


Repayment Plan

Trustee Appointment

Automatic Stay

Tax Assessment

Suspension of Statute of Limitation

Immediate Assessment


Tax Court

Tax Court Petition


Trust Fund Taxes

Allocation of Tax Payments


Super Priority Claims

Secured Claims

Federal Tax Liens

Priority Claims

Tax Claim Determination


Priority of Tax Claims

Second Priority Tax Claims

Third Priority Tax Claims

Four Generates Priority Eight Tax Claims

Eighth Priority Tax Claims

Debt Discharge

Chapter 7 Discharge

Chapter 11 Discharge

Chapter 13 Discharge

Discharge of Taxes

Tax Liens

Individual Bankruptcy Estate

Separate Entity

Tax Attribute Carryovers

Termination of the Estate

Filing Requirements

Disclosure of Return Information

Taxable Income

Taxable Year

Gross Income

Deductions & Credits

Administrative Expenses

Net Operating Loss Carryback

Transfers to Debtor

Partnership & S Corporation Interests

Request for Prompt Determination of Liability

Tax Liability

Individual Debtor

Tax Year Election

Annualizing Taxable Income

Making the Election

Later Bankruptcy of Spouse

Election Considerations

Transfers between Debtor & Estate

Net Operating Loss Carryback Limitation

Partnership Bankruptcy

No Separate Estate

Discharge of Debts

Corporate Bankruptcy

Exemption Return Filing

Personal Holding Company Tax

Tax-Free Reorganizations

§354, §355, & §356

Corporate Liquidations under Chapter 7

Carryover of Tax Items - §381 & 382

Bankruptcy Exception

Reduction of Carryforwards

Section 269 Presumption


Types of Homesteads

Property & Equity Covered

Who Can Homestead?

Excluded Debts


Chapter 5 - 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


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


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 Sale

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


Mortgage Debt Relief Act of 2007

Qualified Principal Residence Indebtedness

Mixed Indebtedness

Amount Realized On Sale or Other Distribution of Property


Nonrecourse Indebtedness

Recourse Indebtedness


Form 1099A

Timing & Character of Gain or Loss



Lender’s Tax Impact

Foreclosure Sale

Discounted Acquisition of Debt

Transactions Involving Related Parties

Related Persons

Chapter 6 - Divorce Settlements & Divisions

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

Divorce Settlements - The Tax Trap

Section 1041

Application of §1041

Mandatory Scope

Property vs. Income

Savings Bonds



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 U.S. Savings Bonds

Negotiated Property Divisions

Adjudicated Property Divisions


General Rule - Immediate & Specific


Holding Period

Notice & Record Keeping

Purchases Between Spouses


Home Mortgage Interest

Deferral & Exclusion of Gain

Business & Investment Property


Section 1031 Exchange

Installment Sale of Assets

Selected Asset Divisions

Installment Obligations

Business Interests


Section 302 Redemption



Section 736(a) Payments

Effect on Recipient

Section 736(b) Payments


Exclusions From §736(b) Treatment


Series of Payments

Section 754 Election

Insurance Policies

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


Divorce Distributions

Amounts Not Rolled Over

Military & Civil Service Pensions

Chapter 7 - Protecting Assets from Old Age &  Catastrophic Illness

Managing the Estate

Joint Tenancy


Durable Power

Revocable Living Trust

Catastrophic illness



Countable Assets

Non-Countable Assets

Personal Residence

Gifting the Residence - General Rule


Inaccessible Assets


Spousal Transfers

Spousal Allowance

Medicaid Trusts

Limited Trust Exceptions

Criminalization of Medicaid Asset Transfers

Private Insurance

Health Care Decisions

Supplemental Security Income


Unearned Income

Earned Income

Exempt Income


Countable Assets

Non-Countable Assets

Disability Benefits


Kidney Disease




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