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Course Details

Defensive Divorce (Course Id 1915)

Updated / QAS / Registry / EA
  Add to Cart 
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 - NASBA Registry - IRS Enrolled Agents
Technical Designation: Technical
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 residences.

Usage Rank : 18421
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 : 03-Nov-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 - 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.

Chapter 1                Basic Marital Tax Matters

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

    * Marital status
    * Joint return
    * Separate returns
    * Head of household
    * Exemptions
    * Divorce costs
    * Withholding & estimated tax
    * Community property states
    * Ending the community
    * Living together
Learning Objectives:

       After reading Chapter 1, participants will be able to:
    1. Specify multiple tax implications to consider when going through a divorce, and recognize the requirements and effects of filing as married or unmarried.
    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:
      a. Specifying reporting guidelines, recognizing the allocation of income earned and received into community property and separate property and what income and property belongs to which spouse when they have different residency statuses;
      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.
    11. Identify the effect of living together on filing statuses and dependency, determine differences between the married tax rate and other tax rates, recognize the tax consequences of having a living together contract to avoid tax traps, and specify the results of Marvin v. Marvin.

Chapter 2                Transfers Incident to Divorce

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

    * Property rights
    * 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
Learning Objectives:

       After reading Chapter 2, participants will be able to:
    1. Identify types of marital property and their likely division in marital property settlements and specify the legal principles used in dividing assets and providing support on divorce or separation.
    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:
      a. Specifying the pros and cons of deferred, present, and alternate property division arguments;
      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.

Chapter 3                Spousal & Child Support

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

    * Divorce or separation instrument
    * 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
Learning Objectives:

       After reading Chapter 3, participants will be able to:
    1. Determine “alimony” and “separate maintenance payments” under §71 and their pre- & post-2019 deduction or income treatment under §215.
    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:
      a. Specifying the pre-1985 alimony requirements, and determining periodic payments and whether certain payments would have qualified under these rules; and
      b. Recognizing the marital or familial relationship and the similarities and differences in the treatment of child support under current law and previous law.
    10. Identify the pre-2019 deduction of alimony paid and the reporting of alimony received on the proper forms specifying required information.
    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:
      a. Identifying whether COBRA rules apply to different plans including notice & deadline requirements and specifying situations that may result in a termination of continuing coverage; and
      b. Determining what constitutes “qualified medical child support orders” recognizing differences with other similar orders and identifying the procedures, requirements, and jurisdiction of QMCSOs.

Chapter 4                Selected Marital Tax Issues Outside of Divorce

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

    * Marriage penalty
    * 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
Learning Objectives:

       After reading Chapter 4, participants will be able to:
    1. Identify the marriage penalty and marriage bonus associated with filing a joint return by:
      a. Recognizing how standard deductions and tax brackets have differed; and
      b. Specifying the effects the TCJA has had on standard deductions and tax brackets for married filing jointly.
    2. Determine the tax treatment of spousal travel including additional cost limitations and identify the benefits of husband and wife partnerships, particularly with regards to Social Security qualification.
    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


Abandoned Spouse Rule - §7703


Same-Sex Marriage

Joint Return



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


Considered Unmarried

Keeping Up a Home

Qualifying Person

Nonresident Alien Spouse

Exemptions & Phaseout (Suspended)

Phaseout of Exemptions

Personal Exemptions


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


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



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



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


Retirement Equity Act of 1984

Enforceability Requirements


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



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 & Recordkeeping

Purchases Between Spouses


Home Mortgage Interest

Deferral & Exclusion of Gain

Business & Investment Property


Section 1031 Exchange

Asset Separation

Related Parties

Two-Year Restriction

Foreign Property

Form 8824

Spousal Transfers

Installment Sale of Assets

Selected Asset Divisions


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



Section 736(a) Payments

Effect on Recipient

Section 736(b) Payments


Exclusions From §736(b) Treatment


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


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


Chapter 3 - Alimony & Child Support

Spousal Support - aka Alimony

Divorce or Separation Instrument

Invalid Decree

Amended Instrument

Premarital Agreements

Alimony Rules


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


Termination at Death

Substitute Payments

Child Support

Past Due Child & Spousal Support Payments

Joint Return Prohibited

Minimum Term Rule for 1985 & 1986 Instruments


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



Alimony Substitution Trusts & Annuities

Advantages of Alimony Trust

Disadvantages of Alimony Trust


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



Choice of Coverage



Qualified Medical Child Support Orders


Procedures & Duties


Chapter 4 - Selected Marital Tax Issues Outside of 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


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


CPE Taxes Course: https://www.cpethink.com/tax-cpa-courses
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