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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 0 ||| Review Questions: 0 ||| Final Exam Questions: 110 |
| CPE Credits : | 22.0 |
| IRS Credits : | 22 |
| Price : | $137.95 |
| Passing Score : | 70% |
| Course Type: | NASBA QAS - Text - Technical - NASBA Registry - IRS Enrolled Agents |
| Primary Subject-Field Of Study: | Taxes - Taxes for Course Id 1915 |
| Description : | This course will teach participants how to apply, implement, and evaluate the strategic tax aspects of marital dissolutions and living together arrangements. Current perspectives on property transfers, asset divisions, alimony, filing status, exemptions, and child support are examined with an emphasis on planning considerations. Property settlements, basis allocation, third party transfers, and purchases between spouses are explored and analyzed. Special attention is given to the division of business interests, retirement plans (including QDROs), insurance policies, and family residence. |
| 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 : |
Separation & Divorce
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 29-Oct-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 - 1915 |
| Keywords : | Taxes, Defensive, Divorce, 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. ASSIGNMENT SUBJECTChapter 1 Basic Marital Tax Matters At the start of Chapter 1, participants should identify the following topics for study:
* Joint return * Separate returns * Head of household * Exemptions * Divorce costs * Withholding & estimated tax * Community property states * Ending the community * Living together After reading Chapter 1, participants will be able to:
2. Identify the requirements for filing a joint return and how to avoid being penalized. 3. Determine the key elements of filing separate returns including what items to report and identify whether or not married taxpayers should file separate returns. 4. Cite the requirements for filing as head of household and the tax advantages and disadvantages of this filing status. 5. Recognize the repeal of personal exemptions, their pre-2018 phaseout, availability, and reporting requirements. 6. Identify the requirements for pre-2005 dependency particularly relationship, married person, citizen or resident, and income and, specify the former regular and special method for determining support recognizing complications from back child support. 7. Determine the current “qualified child” standard using residency, relationship, age, and joint return prohibition, and identify requirements that must be met for parents to treat a child as a qualifying child of a non-custodial parent. 8. Identify deductible and nondeductible divorce expenditures specifying which spouse is subject to tax imposed upon withheld wages, and recognize the effects of making separate estimated tax payments or joint declarations of estimated tax. 9. Determine community property and the community property states, identify the effects of conversion and commingling of property, and how to avoid such marital property issues. 10. Identify community income earned by married couples for reporting purposes by:
b. Recalling the requirements for the special community income allocation rules of §66(a), determining what constitutes community property termination and specifying the treatment of alimony payments; and c. Recognizing the use of statements and records to provide estimates of a former spouse’s income and identifying conditions for greater tax relief. ASSIGNMENT SUBJECT Chapter 2 Transfers Incident to Divorce At the start of Chapter 2, participants should identify the following topics for study:
* Premarital agreements * Application of §1031 * Incident to divorce * Property basis * Purchases of residence between spouses * Purchases of business interests between spouses * Selected asset divisions of residence & business interests * Real & personal property * Pension benefits After reading Chapter 2, participants will be able to:
2. Determine the benefits of premarital agreements and the requirements and permissible provisions for a valid and comprehensive agreement under the Uniform Premarital Act. 3. Specify the position of U.S. v. Davis on interspousal transfers and the changes made by §1041, and identify the requirements of §1041 and the scope of its application. 4. Select factors that determine whether a property transfer is incident to divorce and identify how to meet these factors or avoid §1041 altogether when desired. 5. Determine the application of §1041 to transfers in trust under §1041(e) and to third-party transfers on behalf of a spouse or former spouse. 6. Recognize deferred tax liability by identifying property basis for the transferor spouse and transferee spouse under §1041 after a property settlement. 7. Specify the application of §1041 to property transfers where the transferee assumes liabilities encumbering the property, and the holding period for an asset transferred between spouses or former spouses incident to divorce. 8. Recognize the dangers of purchasing a former spouse's interest in property particularly a marital residence and its tendency to create deferred tax liability. 9. Determine tax effects of purchasing an interest in personal or real property used in a business or held for investment, recognize potential recapture and identify the use of an exchange to dispose of low-basis property received in a §1041 transfer. 10. Specify common disposition alternatives available on divorce and identify the home sale exclusion requirements and the tax treatment and use of installment obligations under §453 in divorce. 11. Recognize sale, redemption, recapitalization, liquidation, and third-party transfers as methods of dividing a business in a marital settlement citing unique provisions under §302, §736, and §754. 12. Identify whether gain or loss on a sale of real or personal property is capital or ordinary and, recognize the tax treatment of such gain or loss and the role and tax treatment of life insurance in property settlements. 13. Specify popular methods of dividing retirement benefits in a divorce or separation action identifying the requirements and tax consequences of a “qualified domestic relations order (QDRO). 14. Identify an overall tax and economic strategy for the division of pension benefits in a marital settlement by:
b. Determining the treatment of IRAs at divorce considering the IRA deduction limit and rollovers; c. Specifying strategies for retirement planning after divorce; d. Recognizing the Social Security benefits, military pensions, civil service pensions, or railroad pensions that may be available to a former spouse; and e. Identifying debts incurred during a divorce that are dischargeable in bankruptcy. ASSIGNMENT SUBJECT Chapter 3 Spousal & Child Support At the start of Chapter 3, participants should identify the following topics for study:
* Alimony requirements of instruments executed after 1984 * Alimony requirements of instruments executed before 1984 * Deducting alimony paid & reporting alimony received * Recapture of alimony for type A & B agreements * Alimony substitution trusts & annuities * Alimony paid by estate * Child support * COBRA coverage * Qualified medical child support orders After reading Chapter 3, participants will be able to:
2. Specify types of §71 “divorce or separation instruments” and determine how having an invalid decree, an amended instrument, or a premarital agreement impacts such an instrument. 3. Identify variables that impact whether a payment is alimony since 1984 and whether a cash payment is deemed made to or on behalf of a former spouse. 4. Determine the tax treatment of housing costs for the family residence and the impact of ownership by contrasting when the nonoccupying spouse owns the home with when the occupying spouse owns the home. 5. Identify what rent or resident cost payments can be alimony when a family residence is jointly owned and occupied by a spouse or a taxpayer is required to make rent payments for a spouse. 6. Specify the tax treatment of life insurance premium payments, voluntary payments, and payments to a remarried spouse recognizing advantages and disadvantages to each spouse. 7. Determine how to recharacterize otherwise deductible alimony payments as nondeductible, identify whether spouses are members of different households, and identify the alimony pitfall of being required to make payments after a former spouse’s death. 8. Specify the differences between child support and alimony identifying their tax treatment to avoid reporting errors. 9. Identify the alimony and child support tax provisions that currently apply from those that applied to instruments executed prior to 1985 by:
b. Recognizing the marital or familial relationship and the similarities and differences in the treatment of child support under current law and previous law. 11. Specify the pre-2019 alimony recapture rule for various marital agreements and its impact on the tax treatment of past payments 12. Recognize the use of alimony trusts to realize tax advantage and security, determine the use of annuity contracts, and specify the proper tax treatment of alimony paid by an estate to a former spouse of a decedent. 13. Identify the tax treatment of child support and circumstances where a payment will be fixed as child support, and specify events that determine whether a contingency is clearly child-related and how to rebut this presumption of child support. 14. Recognize the COBRA and qualified medical child support order rules by:
b. Determining what constitutes “qualified medical child support orders” recognizing differences with other similar orders and identifying the procedures, requirements, and jurisdiction of QMCSOs. ASSIGNMENT SUBJECT Chapter 4 Selected Marital Tax Issues Outside of Divorce At the start of Chapter 4, participants should identify the following topics for study:
* Spousal travel * Dower & curtsey * Joint interests and powers of appointment * Life insurance * Marital deduction * Tax basis for estate assets * Business interests upon the death of a spouse * Gift taxes * Social Security survivors’ benefits After reading Chapter 4, participants will be able to:
b. Specifying the effects theTCJA has had on standard deductions and tax brackets for married filing jointly. 3. Recognize the application of federal estate tax on couples and where estate planning may be necessary as a result of marital status including the unique application of dower and curtsey. 4. Specify the treatment of co-tenancies with or without a right of survivorship identifying qualified joint interests, recognize the impact on the value of a general power of appointment, determine what insurance proceeds are included in the gross estate because of incidents of ownership, and cite the community property issue involved with ownership of life insurance. 5. Determine the impact of the marital deduction on the gross estate recognizing outright transfer methods and specify the use of a “marital deduction (QTIP) trust” and a “qualified terminable interest trust.” 6. Identify marital deduction variables including deduction limitations and specify the federal income tax treatment and gift tax treatment of non-citizen spouses. 7. Recognize the effect common transactions and community property have on §1014 property basis and the benefits of a bypass trust specifying its effect on the marital deduction. 8. Determine the purposes of the federal gift tax identifying its computational methods and applicable exclusions, specify the advantages of splitting gifts and the gift tax marital deduction recognizing dangers as to “excess” gifts and terminable trusts and identify Social Security eligibility for family members of a system participant. |
| Course Contents : | Chapter 1 - Basic Marital Tax Matters Filing Status Marital Status Unmarried Abandoned Spouse Rule - §7703 Married Same-Sex Marriage Joint Return Citizenship Liability Innocent Spouse Exception Refund Offset Program - §6402 Injured Spouse - Form 8379 Separate Returns Itemized Deductions Medical Expenses Property Tax & Interest State Income Taxes Casualty Loss Separate vs. Joint Dilemma Disadvantages of a Separate Return Advantages of a Separate Return Joint Return After Separate Returns Head of Household Requirements Considered Unmarried Keeping Up a Home Qualifying Person Nonresident Alien Spouse Exemptions & Phaseout (Suspended) Phaseout of Exemptions Personal Exemptions Spouses Former Spouse Dependency Exemptions Dependency Before 2005 Five Tests Test #1 - Relationship Household Member Test #2 - Income Dependent Child Income Exception Definition of a Child Definition of a Student Test #3 - Citizen or Resident Test #4 – Married Person Test #5 - Support Regular Method Special Support Method for Children of Divorced or Separated Parents Back Child Support Dependency After 2004 & Before 2018 Suspension Four Tests Test #1 - Residency (or Time) & Citizenship Children of Divorced or Separated Parents Test #2 - Relationship Test Test #3 - Age Test Test #4 - Joint Return Restriction Medical Expenses Child-Care Credit Conclusion Divorce Costs Tax Advice - §212(3) Fees to Obtain Alimony or Protect Income - §212(1) & (2) Fees to Obtain Property - §1012 & 1016 Nondeductible Expenses Withholding & Estimated Tax Joint Estimated Tax Payments Refunds & Deficiencies Nonresident Alien Spouse Withholding Marital Property Common Law Property Equitable Distribution Community Property Community Property States Transmutation Commingling Income Reporting Spouses with Different Residency Statuses Special Income Rules For Spouses Living Apart - §66(a) & §879 Mandatory Application Earned Income Social Security Benefits Other Income Denial of Community Property Reporting - §66(b) Community Reporting Relief Provisions - §66(c) Ending the Community Annulment Separation Alimony vs. Community Income Living Together Married v. Unmarried Tax Rate Comparison Sham Divorce Dependency Exemptions Attributable Income Alimony & Property Divisions Chapter 2 - Transfers Incident to Divorce Property Rights Marital Property Common Law Property Community Property Equitable Distribution Separate Property Asset Division Principles Premarital Agreements Uses & Benefits Control & Scope Limitations Retirement Equity Act of 1984 Enforceability Requirements Checklist Uniform Premarital Act - The California Example Permitted Items of Agreement Unenforceable Items Property Settlements Section 1041 Application of §1041 Mandatory Scope Property vs. Income Savings Bonds Receivables Interest 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 Caselaw General Rule - Immediate & Specific Liabilities Holding Period Notice & Recordkeeping Purchases Between Spouses Residence Home Mortgage Interest Deferral & Exclusion of Gain Business & Investment Property Recapture Section 1031 Exchange Asset Separation Related Parties Two-Year Restriction Foreign Property Form 8824 Spousal Transfers Installment Sale of Assets Selected Asset Divisions Residence Section 121 Home Sales Two-Year Ownership & Use Requirements Special Divorce Rules Tacking of Prior Holding Period Prorata Exception Limitations on Exclusion Installment Obligations Business Interests Corporate Stock Cases & Rulings PLR 9046004 Arnes Cases Mrs. Arnes v. United States, 981 F .2d 456 (9th Cir. 1992) Mr. Arnes v. Commissioner, 102 TC 522 (1994) Blatt Case Gaughan Case Section 302 Stock Redemption Recapitalization Partnerships Section 736(a) Payments Effect on Recipient Section 736(b) Payments Effect Exclusions From §736(b) Treatment Liabilities Series of Payments Section 754 Election Insurance Policies Real & Personal Property Classification of Assets Character of Gain or Loss Capital Assets - §1221 Long-Term or Short-Term Installment Sale Net Gain or Loss Treatment of Net Capital Gains Section 1231 Assets Gains & Losses Recapture Of Net Ordinary Losses Ordinary Assets Depreciable Property Recapture on Personal Property Section 1245 Property Treatment of Gain Recapture on Real Property Section 1250 Property 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 Rollovers Divorce Distributions Amounts Not Rolled Over Retirement Planning After Divorce Social Security Benefits Divorced Spouse Benefits Divorced Widow(er) Benefits Military Pensions Divorced Spouse Benefits Jurisdiction Requirement Disposable Pay Direct Payment Divorced Widow(er) Benefits Social Security Offset Civil Service Pensions Divorced Spouse Benefit Divorced Widow(er) Benefit Railroad Pensions Divorced Spouse Benefit Divorced Widow(er) Benefit Bankruptcy Chapter 3 - Alimony & Child Support Spousal Support - aka Alimony Divorce or Separation Instrument Invalid Decree Amended Instrument Premarital Agreements Alimony Rules Requirements Payment Must Be In Cash Payments to a Third Party Written Requests, Consents, or Ratifications Payments for Family Residence Taxpayer-Owned Home Spouse-Owned Home Jointly-Owned Home Rent On Property Owned by a Third Party Payments for Life Insurance Contingent Interest Voluntary Payments Payments to Remarried Spouse Designating Payments as Not Alimony Members of Different Households Exception Termination at Death Substitute Payments Child Support Past Due Child & Spousal Support Payments Joint Return Prohibited Minimum Term Rule for 1985 & 1986 Instruments Exception Instruments Executed Before 1985 - A Historical Perspective Old Requirements - Long, Long Ago in a Galaxy Far Away Periodic Payments Exception for Installment Payments Mixed Payments Marital or Family Relationship Property Settlement Child Support Tax Treatment of Alimony Instruments Executed Before 2019 Alimony Paid - Deductible Reporting Alimony Received - Income Alimony as Compensation Recapture of Alimony for Type A & B Agreements Exceptions to Recapture Including the Recapture in Income Deducting the Recapture TRA ‘84 Recapture - 1985 & 1986 Instruments TRA ‘86 Recapture - After 1986 Instruments Exceptions Computation Alimony Substitution Trusts & Annuities Advantages of Alimony Trust Disadvantages of Alimony Trust Annuities Alimony Paid by an Estate Instruments Executed After 2018 Child Support Contingency Relating To the Child Clearly Associated With a Contingency Heller Case Rebuttable Presumptions COBRA Coverage Coverage Termination Notice Election Choice of Coverage Cost Deductibles Qualified Medical Child Support Orders Definition Procedures & Duties Jurisdiction Chapter 4 - Selected Marital Tax Issues Outside Divorce Federal Income Tax Marriage Penalty Standard Deduction Tax Brackets Spousal Travel Regulations - Spousal Travel Additional Cost Rule Husband-Wife Partnerships Qualified Joint Venture Election One Spouse Employed by the Other Federal Estate Tax Dower & Curtsey - §2034 Community Property Comparison Joint Interests - §2040 Qualified Joint Interest Powers of Appointment - §2041 Ascertainable Standard 5/5 Power Life Insurance - §2042 Incidents of Ownership Community Property Issue Marital Deduction - §2056 Outright to Spouse Marital Deduction (QTIP) Trust Qualified Terminable Interest Trust Requirements Net Value Rule Non-Citizen Spouse Gifts to Non-Citizen Spouses Tax Basis for Estate Assets - §1014 Community Property Cost Basis Business Interests - Death of a Spouse Bypass Trust Gift Taxes - §2501 to §2524 Gift Tax Computation Calculation Steps Applicable Exclusion - §2505 Application - §2501 Entity Rule Split Gifts - §2513 Community Property States Annual Exclusion Per Donee/Per Year Gifts in Excess of the Annual Exclusion Gift Tax Marital Deduction Nondeductible Terminable Interests Social Security Survivors Benefits Appendix A - Section 71 & Regs. Appendix B - Section 1041 & Regs. Appendix C - California Uniform Premarital Agreement Act Glossary |
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