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| 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 - NASBA Registry - IRS Enrolled Agents |
| Technical Designation: | Technical |
| 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 : | 13333 |
| Release : | 2024 |
| Version : | 1.0 |
| Prerequisites : | General understanding of federal income taxation. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
Debt
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 21-Mar-2024 |
| 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 - 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. ASSIGNMENT
* 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
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 Introduction Bona Fide Debt Related Party Debt Inter-Family Loans Loans to Controlled Corporations Losses Section 1244 Debt v. Stock Factors Debt vs. Lease Deductible Interest Business Interest Mortgage Interest Prepayment Penalty Points 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 Interest on Installment Purchases Investment Interest Nondeductible Interest Personal Interest Interest on Income Tax Owed Penalties 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) Timing Term Gift Loans - §7872(d)(2) Treatment of Borrower Additional Lump-Sum Cash Payment Timing Treatment of Lender Timing Nongift Term Loans - §7872(b) Treatment of Borrower Additional Lump-Sum Payment Timing Treatment of Lender Timing 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 Introduction 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 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 Insurance 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 Method Requirements Formula Dealers Special Rule Sale at a Loss Installment Income Interest Income Gain Pledging Installment Notes in Excess of $5 Million Related Party Sales Sale of Depreciable Property Resale Rule Related Persons Exceptions 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 Foreclosure Nonrecourse Indebtedness Recourse Indebtedness Discounted Acquisition of Debt Transactions Involving Related Parties Related Persons Non-Business Bad Debts Totally Worthless Required Basis or Income Inclusion Political Debts Secondary Liability on Home Mortgage Recovery Business Bad Debts Methods of Treating Bad Debts Glossary |
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