Use Landscape to see Search/Filter
Item Types:
Field of Study:
CPE Hours:
Course Details

Debt (Selected Debt Related Issues) - Mini Course (Course Id 243)

Updated / QAS / Registry / EA
  Add to Cart 
Author : Danny C Santucci, JD
Course Length : Pages: 33 ||| Review Questions: 15 ||| Final Exam Questions: 13
CPE Credits : 2.5
IRS Credits : 2
Price : $22.45
Passing Score : 70%
Course Type: NASBA QAS - Text - Technical - NASBA Registry - IRS Enrolled Agents
Primary Subject-Field Of Study:

Taxes - Taxes for Course Id 243

Description :

This mini-course brings the practitioner information on tax issues affecting interest and debt. The various types of interest and their required allocation are explored and reviewed. For the economically troubled client, special attention is devoted to debt cancellation, repossession, discounts, and foreclosure. The program also discusses installment sales, taxable interest, and bad debts. 

Usage Rank : 0
Release : 2022
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 : 06-Sep-2022
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 - Technical - NASBA Registry - IRS Enrolled Agents - 243

Keywords : Taxes, Debt, Selected, Debt, Related, Issues,Mini, Course, cpe, cpa, online course
Learning Objectives :

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

    At the start of the materials, participants should identify the following topics for study:
      * Deductible interest & debt
      * Nondeductible interest
      * Below-market interest rate loans
      * Unstated or imputed interest on sales
      * Original issue discount (OID)
      * Allocation of deductible interest
      * Taxable interest
      * Installment sales
      * Debt cancellation & foreclosure
      * Bad debts
Learning Objectives:
    After reading the materials, participants will be able to:
      1. Determine what constitutes “interest” specifying its key components, and identify whether the various types of interest are tax deductible or nondeductible.
      2. Recognize how to deduct interest that is paid or accrued during the tax year applying different methods of accounting, specify the applicable federal rate, recognize the effects of unstated interest on transactions, and cite the imputed interest rules in the context of debt instruments.
      3. Identify the interest allocation rules and the allocation period for a loan, recognize the difference between an allocation of loan proceeds that are deposited in an account and the allocation of loan proceeds received in cash, and cite loan repayments in the order they are deemed repaid.
      4. Determine when certain distributions commonly referred to as "dividends" are actually interest and the tax treatment of interest that is earned on such items as income on frozen deposits and U.S. Savings Bonds.
      5. Recognize an installment sale transaction, determine what constitutes the installment method, specify the parts of each payment on an installment sale, and cite the related party sales rules of §453.
      6. Identify exceptions to the general income inclusion rule and their effect on a taxpayer, and determine the different effects of nonrecourse indebtedness from the effects of recourse indebtedness on foreclosure.
      7. Specify bad debt categories specifying the impact of nonbusiness bad debt recovery, identify when a business deducts its bad debts from gross income, and recognize which accounting method to apply to business bad debts.
Course Contents :

Chapter 1 - Debt

Deductible Interest & Debt


Bona Fide Debt

Related Party Debt

Inter-Family Loans

Loans to Controlled Corporation


Section 1244

Debt v. Stock Factors

Debt vs. Lease

Deductible Interest

Business Interest

Mortgage Interest

Prepayment Penalty


Exception for Points on Home

Seller Paid Points

Expenses to Obtain a Mortgage

Qualified Residence Interest

Acquisition Debt

Home Acquisition Debt Limit

Refinanced Home Acquisition Debt

Mortgage Deemed Used To Buy, Build, or Improve Home

Date of the Mortgage

Cost of Home or Improvements

Home Equity Debt Suspended

Home Equity Debt Limit

Fair Market Value

Acquisition Indebtedness

Home Equity Indebtedness

Interest on Installment Purchases

Investment Interest

Nondeductible Interest

Personal Interest

Interest on Income Tax Owed


Capitalized Interest - §263A

Interest Related To Tax-exempt Income - §265

Commitment Fees & Service Charges

Corporate Acquisition Interest - §279

At-Risk Rules - §465

Passive Activity Limitations - §469

When Interest is Paid

Cash Method

Prepaid Interest - §461

Accrual Method

Prepaid Interest

Related Taxpayer - §267

Election to Capitalize Carrying Charges - §266

Below-Market Interest Rate Loans - §7872

Demand Loans (Gift or Nongift) - §7872(a)

Treatment of Lender & Borrower

Forgone Interest - §7872(e)(2)


Term Gift Loans - §7872(d)(2)

Treatment of Borrower

Additional Lump-Sum Cash Payment


Treatment of Lender


Nongift Term Loans - §7872(b)

Treatment of Borrower

Additional Lump-Sum Payment


Treatment of Lender


Special Rule for Certain Gift Loans

Loans Subject To Below-Market Loan Rules

Tax Avoidance Loans

Loans Not Subject To Below-Market Loan Rules

Unstated or Imputed Interest on Sales - §483 & §1271-1275

Applicable Federal Rate (AFR)

Effects of Unstated Interest

Selling Price & Contract Price

Rules for Imputing Interest

Test Rate of Interest - The 3-Month Rate

Relationship of §1274 & §483

Section 483

Total Unstated Interest

Transactions to Which Section 483 Rules Apply

Exceptions to §483 Rules

Section 1274 Rules

Exceptions to §483 & §1274

Original Issue Discount (OID)

De Minimis OID

Form 1099-OID

Exceptions to OID Rules

Debt Instruments Issued From 7/2/82 to 1/1/85

Debt Instruments Issued After 12/31/84

 Allocation of Deductible Interest


Use of Proceeds

Allocation Period

Proceeds Not Disbursed To Borrower

Proceeds Deposited in Borrower’s Account

Order of Funds Spent

Expenditures Paid From Checking Accounts

Expenses Paid Within 30 Days

Optional Method for Determining Date of Reallocation

Accrued Interest

Accrued Interest Before Debt Proceeds Are Received

Loan Proceeds Received In Cash

Loan Repayments

Loan Refinancing

 Taxable Interest

Dividends v. Interest

CDs & Deferred Interest Accounts

Gift for Opening Account

Interest Income on Frozen Deposits

U.S. Obligations

Miscellaneous Interest Items

Interest on Tax Refunds

Interest on Condemnation Award

Installment Sale Payments

Interest on Annuity Contract

Usurious Interest

Accrued Interest on Bonds

Below-Market Loans

U.S. Savings Bonds

Series HH Bonds

Series EE Bonds

Form 1099-INT for U.S. Savings Bonds Interest

Education Savings Bond Program - §135

Qualified U.S. Savings Bonds

Eligible Expenses

Exclusion Phaseout


State or Local Government Obligations

Tax-Exempt Interest on State or Local Obligations

Taxable Interest on State or Local Obligations

Private Activity Bonds

Tax-Exempt Bonds Bought At a Discount

 Installment Sales

Installment Method




Special Rule

Sale at a Loss

Installment Income

Interest Income



Installment Notes in Excess of $5 Million

Related Party Sales

Sale of Depreciable Property

Resale Rule

Related Persons


 Debt Cancellation & Foreclosure

Exceptions from Income Inclusion

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

Student Loan Exception - §108(f)

Public Service Requirement - §108

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


Nonrecourse Indebtedness

Recourse Indebtedness

Discounted Acquisition of Debt

Transactions Involving Related Parties

Related Persons

 Bad Debts

Non-Business Bad Debts

Totally Worthless

Required Basis or Income Inclusion

Political Debts

Secondary Liability on Home Mortgage


Business Bad Debts

Methods of Treating Bad Debts



CPE Taxes Course: https://www.cpethink.com/tax-cpa-courses
Thank you for taking one of our free courses. We would like to be able to let you know when we add free courses or have special offers and will never spam you or share your address with anyone. If you are Ok with that please reply with "Ok" or if not please reply "No Thanks". Either way enjoy your free CPE course.
Exam completed on .

Do you want to add the course again?