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Course Details

Essential Legal Concepts with Tax Analysis (Course Id 199)

Updated / QAS / Registry / EA
  Add to Cart 
Author : Danny C Santucci, JD
Course Length : Pages: 224 ||| Review Questions: 200 ||| Final Exam Questions: 195
CPE Credits : 39.0
IRS Credits : 39
Price : $176.95
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 199

Description :

While accounting and the practice of law are separate professions, the accountant must be conversant with essential legal concepts. Modern accounting practice requires familiarity with corporate legal structure, business entities, partnership operations, contracts, property rights, employment law, divorce, consumer protection, will & trusts, and even bankruptcy law. This course explores these specific areas with an emphasis on business and accounting issues. This informal and clear guide to the basic concepts of business law provides accountants with an excellent review of legal concepts that arise in any tax professional’s practice. The attendees will gain the ability to recognize and discuss general legal concepts with both client and their counsel.

Knowledge is power and nowhere is that truer than in the field of law. To gain such a working knowledge of law, readily understandable explanations are given to essential and related business law subjects. The accountant is guided through the complex maze of literally hundreds of legal principles from acceptance to zoning.

Usage Rank : 20769
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 : 17-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 - 199

Keywords : Taxes, Essential, Legal, Concepts, Tax, Analysis, 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                Asset Protection

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

    * Need for asset protection
    * Types of creditors
    * Fraudulent transfers
    * Preparation for asset protection
    * Types of insurance
    * Buy-sell agreements
    * Individual ownership and corporate ownership
    * Asset protection aspects of trusts
    * Co-tenancy and partnerships
    * Divorce
Learning Objectives:

       After reading Chapter 1, participants will be able to:
    1. Identify the goals and purposes of asset protection recognizing the objections some people have about shielding assets from creditors by:
      a. Citing reasons for asset protection and situations that can unexpectedly put assets and financial security at stake;
      b. Specifying sources of lawsuits and the author's concept of exploding and imploding liability; and
      c. Determining asset protection using the primary concepts of insurance, asset placement, and statutory protections.
    2. Recognize the importance of creditor types associated with asset protection and fraudulent transfers.
    3. Specify the fraudulent transfer laws and badges of fraud, define statutes of limitation, criminal penalties, and permissible asset transfers.
    4. Identify the degree and necessity of asset protection using net worth and asset values under a balance sheet and the various ways that insurance and buy-sell agreements can offer asset protection.
    5. Recognize the asset protection advantages and disadvantages of ownership formats and entities by:
      a. Determining the use of individual ownership and corporate ownership in an asset protection plan including the importance of S corporations and their estate tax planning advantages;
      b. Identifying testamentary trusts, living trusts, and subcategories of trusts recognizing their asset protection elements;
      c. Specifying the various types of co-tenancy, identifying their asset protection dangers, and several types of partnerships citing their variation from limited liability companies; and
      d. Recognizing the unique asset protection qualities of retirement plans, custodianship, and estates as asset protection tools.
Chapter 2                Alimony & Child Support

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

    * Divorce or separation instrument
    * Pre- and post-1984 alimony requirements
    * Deducting pre-2019 alimony paid & reporting alimony received
    * Recapture of alimony for types A & B agreements
    * Alimony substitution trusts & annuities
    * Alimony paid by an estate
    * Child support
    * COBRA coverage
    * Qualified medical child support orders
Learning Objectives:

       After reading Chapter 2, participants will be able to:
    1. Determine “alimony” and “separate maintenance payments” under §§71 and 215.
    2. Specify the 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 the alimony and child support tax provisions that currently apply from those that applied to instruments executed prior to 1985 by:
      a. Specifying variables that impact whether a payment is alimony since 1984 and determining whether a cash payment is deemed made to or on behalf of a former spouse in order to characterize it as alimony;
      b. Recalling the tax treatment of housing costs for the family residence showing the impact of ownership when the nonoccupying spouse owns the home and when the occupying spouse owns the home;
      c. Identifying 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;
      d. Recognizing the tax treatment of life insurance premium payments, voluntary payments, and payments to a remarried spouse along with the advantages and disadvantages to each spouse;
      e. Determining how to recharacterize otherwise deductible pre-2019 alimony payments as nondeductible identifying whether spouses are members of different households, and identifying the alimony pitfall of being required to make payments after a former spouse’s death;
      f. Specifying the differences between child support and alimony and thereby avoid reporting errors;
      g. Citing the pre-1985 alimony requirements and periodic payments; and
      h. Determining marital relationship and the similarities and differences in the treatment of child support under current and previous law.
    4. Identify the deduction of pre-2019 alimony paid and the reporting of alimony received on the proper forms with required information.
    5. Specify the pre-2019 alimony recapture rule for various marital agreements and its impact on the tax treatment of past payments.
    6. 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.
    7. Recall the tax treatment of child support, identify two circumstances where a payment will be fixed as child support, and specify six events that determine whether a contingency is clearly child-related and how to rebut this presumption of child support.
    8. Recall the COBRA and qualified medical child support order rules so as to maximize the use of health care coverage plans by:
      a. Identifying whether COBRA rules apply to different plans including notice & deadline requirements and specifying four situations that may result in 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 3                Bankruptcy

       At the start of Chapter 3, 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 3, 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 and their influence on how an individual or business “goes bankrupt.”
    2. Specify the rules for automatic stay and levy along with their impact on “freezing” creditor activity, tax assessment, and collection.
    3. Identify the differences between preferential and nonpreferential payments together with the priority of creditor claims.
    4. Recognize when debt is discharged under various bankruptcy types and identify how to establish an individual bankruptcy estate determining its taxable income and filing requirements.
    5. Identify partnership and corporate bankruptcies, specify debts covered under homesteading, and determine permissible garnishment amounts and special garnishment rules.
Chapter 4                Divorce Settlements & Divisions

       At the start of Chapter 4, 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 4, 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. Cite the position of U.S. v. Davis on interspousal transfers and the changes made by §1041 and, specify the requirements of §1041 and the scope of its application.
    3. Identify factors that determine when a property transfer is incident to divorce and how to meet these factors or avoid §1041 altogether when desired and recognize the application of §1041 to transfers in trust under §1041(e) and to third-party transfers on behalf of a spouse or former spouse.
    4. Determine deferred tax liability and property basis for the transferor spouse and transferee spouse under §1041 after a property settlement.
    5. Recognize the application of §1041 to property transfers where the transferee assumes liabilities encumbering the property, and identify with appropriate records the holding period for an asset transferred between spouses or former spouses incident to divorce.
    6. Identify the dangers of purchasing a former spouse's interest in property particularly a marital residence including its tendency to create deferred tax liability, specify the 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.
    7. Recognize sale, redemption, recapitalization, liquidation, and third-party transfers as methods of dividing a business in a marital settlement citing unique provisions under §302, §368, §736, and §754.
    8. Identify an overall tax and economic strategy for the division of pension benefits in a marital settlement by:
      a. Specifying popular methods of dividing retirement benefits in a divorce or separation action;
      b. Determining what constitutes a “qualified domestic relations order” along with specific information to be included in such an order and the tax consequences of QDRO distributions;
      c. Recognizing the pros and cons of deferred, present, and alternate property division arguments;
      d. Specifying the treatment of IRAs at divorce considering the IRA deduction limit and rollovers; and
      e. Locating military pensions and civil service pensions that may be available to a former spouse.
Chapter 5                Employment

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

    * Employee v. independent contractor
    * Unemployment compensation
    * Workers’ compensation
    * Overall limitation of unreasonable compensation
    * Unreasonable compensation factors
    * Social security retirement benefits
    * Social security tax
    * Medicare
    * Disability
    * Americans with Disabilities Act of 1990
Learning Objectives:

       After reading Chapter 5, participants will be able to:
    1. Specify common-law rules used to determine employee status for FICA and federal income tax withholding, determine FICA and FUTA taxes including their reporting, and identify unreasonable compensation issues.
    2. Recognize the mechanics of the Social Security system allowing better retirement planning by:
      a. Determining how the system works, who qualifies, and when such participants are eligible for benefits; and
      c. Locating clients’ retirement benefits following a multi-step process.
    3. Identify Social Security taxes, their rates, and covered earnings to determine actual amounts taken from gross pay.
    4. Determine Medicare Part A and Medicare Part B differences and what is needed to qualify, and identify the eligibility requirements of Social Security disability and survivors’ benefits.
Chapter 6                Entities & Title

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

    * Individual ownership & sole proprietorships
    * Corporations
    * Trusts holding title & business trusts
    * Co-tenancy taxation, percentage interests & partition
    * Partnership taxation & recapitalization
    * Family partnerships
    * Limited liability companies
    * Retirement plans
    * Custodianship
    * Estate
Learning Objectives:

       After reading Chapter 6, participants will be able to:
    1. Identify tax and legal title formats recognizing the distinctions among these entity formats by:
      a. Determining the advantages and disadvantages of holding property individually and through a sole proprietorship or a corporation along with associated title pitfalls;
      b. Specifying the C corporations groups including the estate-planning problems associated with each; and
      c. Recognizing the advantages that partnerships may have over corporations.
    2. Cite the S corporation requirements and tax advantages and disadvantages particularly those associated with incorporating a farm.
    3. Specify the title holding benefits of trusts, co-tenancy, partnerships, and limited liability companies and the tax characteristics of each, identify the types of retirement plans used to provide lifetime benefits to a business owner and to employees, determine how title can be held on behalf of minors and the tax treatment of custodianships, and specify the tax treatment of a probate estate.
Chapter 7                Insurance

       At the start of Chapter 7, 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 7, 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 along with their tax advantages and disadvantages.
    4. Identify entity purchase and cross-purchase agreements specifying tax and legal advantages and pitfalls.
Chapter 8                Property Dispositions

       At the start of Chapter 8, participants should identify the following topics for study:

    * Capital gains
    * Home sales
    * Installment method
    * Contingent payments or price
    * Section 1031 like-kind exchanges
    * Delayed exchange regulations
    * Actual & constructive receipt rule
    * Foreclosure
    * Repossession
    * Condemnations
Learning Objectives:

       After reading Chapter 8, participants will be able to:
    1. Identify capital gains rates with applicable assets using the "basket" approach.
    2. Cite the elements of the §121 home sale exclusion and the application and safe harbor regulations associated with the exclusion.
    3. Recognize the installment method rules and regulations related to using this method by:
      a. Identifying how §453, its requirements, and basic terminology have changed since the Installment Sales Revision Act of 1980; and
      b. Determining related party and contingent payment rules, §483 imputed interest, and §§1271 through 1274 original issue discount.
    4. Identify the mechanics of a §1031 like-kind exchange by:
      a. Recognizing the advantage of §1031 as a tax deferral device naming at least three elements of an exchange;
      b. Specifying related parties and conditions where they may sell or dispose of properties;
      c. Determining the multiple property regulations and the general rule for netting liabilities; and
      d. Recognizing a delayed exchange using the identification requirements, specify safe harbors to avoid actual or constructive receipt and identifying the “look thru” treatment of partnership interests according to the latest amendments to §1031.
    5. Determine gain or loss on foreclosure or repossession identifying reporting and filing requirements and the hidden income tax danger of directly or indirectly acquiring one's own debt at a discount.
    6. Recognize the differences between personal property and real property repossessions, and identify when a bad debt deduction may be taken if the seller repossesses real property.
    7. Identify the tax treatment of an involuntary conversion by:
      a. Recognizing related terminology and the tax consequences of receiving a condemnation award or severance damages;
      b. Locating gain or loss from condemnations and recognizing the proper reporting of payments associated with involuntary conversions;
      c. Determining when clients can postpone gain on condemned, damaged, destroyed, or stolen property; and
      d. Citing the related party rule under §1033.
Chapter 9                Retirement & Employee Benefits

       At the start of Chapter 9, participants should identify the following topics for study:

    * Sources of retirement income
    * Individual retirement accounts
    * Tax-deferred annuities
    * Fringe benefit provisions
    * Employee achievement awards
    * Cafeteria plans
    * Self-insured medical reimbursement plans
    * Employer-provided automobile
    * Interest-free & below-market loans
    * Insurance
Learning Objectives:

       After reading Chapter 9, participants will be able to:
    1. Recognize the importance of effectively designing a retirement plan following a multi-step program.
    2. Identify qualified corporate plans, SIMPLE plans, self-employed plans, IRAs, tax-deferred annuities, and SEP plans, how to build up investment funds, variables in a current investment plan, and participant loan regulations under §4975.
    3. Determine the differences between nonstatutory and statutory fringe benefits, identify no-additional-cost services, qualified employee discounts, working condition fringes and de minimis fringes specifying which property or services qualify under each benefit, and §79 group term life insurance.
    4. Cite the §129 requirements and limits, identify a §125 “cafeteria plan,” recognize the §119 meals and lodging exclusion, determine the mechanics of §105 medical reimbursement plans, and cite the requirements and limits §127 programs.
    5. Determine valuation methods for employer-provided automobiles, recognize interest-free and below-market loans, cite the requirements and limitations on a number of other fringe benefits under §§217, 132, 67 212, 132(h)(5) and 280A, identify the limited S corporation fringe benefits, and specify ERISA compliance requirements.
Chapter 10                Torts & Personal Injuries

       At the start of Chapter 10, participants should identify the following topics for study:

    * Intentional torts
    * Unintentional torts
    * Business torts
    * Damages
    * Personal injury back pay
    * Personal injury installment payments
    * Nonphysical personal injury
    * Punitive damages
    * Wrongful death
    * Interest & legal fees
Learning Objectives:

       After reading Chapter 10, participants will be able to:
    1. Identify types of tort and the remedies tort law provides.
    2. Recognize the personal injury exclusion to ensure proper reporting of damages received because of injury, and determine how to report punitive damages, interest on injury awards, and legal fees as determined according to case law.
Chapter 11                Wills & Probate

       At the start of Chapter 11, participants should identify the following topics for study:

    * Provisions of wills
    * Requirements of wills
    * Executors and guardians
    * Types of wills
    * Title implications
    * Changes to a will
    * Advantages of a will
    * Simple will
    * Probate pros and cons
    * Probate avoidance
Learning Objectives:

       After reading Chapter 11, participants will be able to:
    1. Specify types of wills and the functions a will can perform, identify types of bequests, determine the duties of executors and guardians, and recall ways to hold title and their tax ramifications.
    2. Identify advantages of a properly drafted will, determine the distribution flow of simple wills, and specify the pros and cons of probate proceedings.
Chapter 12                Trusts

       At the start of Chapter 12, participants should identify the following topics for study:

    * Purpose of trusts
    * Common elements of trusts
    * Types of trusts
    * Living trusts
    * Income tax & trusts
    * Gift tax & trusts
    * Estate tax & trusts
    * Identification, recital & property transfer clauses
    * Income and principal & revocation and amendment clauses
    * Trustee and trust termination clauses
Learning Objectives:

       After reading Chapter 12, participants will be able to:
    1. Identify the relationship of parties in a trust, reasons to establish a trust, and types of trusts along with their estate planning function.
    2. Specify recommended living trust provisions, identify the application of gift and income tax including the use of a grantor trust and an unlimited marital deduction, and determine what constitutes an “A-B” and “A-B-C” trust format.
Course Contents :

Chapter 1 - 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



Homeowners Insurance

Automobile Insurance

Disability Insurance

Life Insurance

Life Insurance Trust

Buy-Sell Agreements


Asset Protection Aspects of Common Entities

Individual Ownership

Sole Proprietorship


C Corporation

No Pass-Through

The S Corporation - §1361


Types of Trusts

Revocable Trust

Land Trusts

Irrevocable Trusts

Testamentary Trust

Business Trusts

Foreign Trusts - §679

Asset Protection Trusts - APTs

Foreign Jurisdictions


Income Taxation

Estate & Gift Tax

Creditor Protection

Family Trusts

Medicaid Trust

Grantor Retained Income Trust


Tenancy in Common

Varying Percentages

No Survivorship

Joint Tenancy with Right of Survivorship

Equal Percentages

Tenants by the Entirety

Right of Partition


Family Partnerships

Charging Orders

Phantom Income to Creditor

Tax Issues

Estate Savings

Income Tax Savings

Limited Liability Company

Retirement Plan

Retirement Fund Protection in Bankruptcy




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

Chapter 2 - 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 3 - 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 4 - 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 5 - Employment

The Employment Relationship

Employee v. Independent Contractor

Common Law Rules Used by IRS


Statutory Employees

Real Estate Agents

Reporting Requirements


Section 530 Relief

Unemployment Benefits

Federal Unemployment (FUTA) Tax - §3302

Depositing FUTA Tax

Unemployment Compensation


Temporary Extensions & Exclusions

Workers’ Compensation

Tax Exemption

Unreasonable Compensation

Overall Limitation

Allowance of Deduction

Limitation on Accrual Deduction

Employment Contracts

Scope of Examination


Employee’s Qualifications

Size of the Business

Employee’s Compensation History

Unreasonably Low Salaries

Services Performed by the Employee

Past Service

Reasonable Dividends

Bonuses as Constituting Dividends

Payback Agreements

Miscellaneous Factors

Social Security

How Social Security Works

Social Security Participants

Social Security Benefits

Retirement Benefits



Average Indexed Monthly Earnings (AIME)

Primary Insurance Amount (PIA)

Cost of Living Adjustment Using Dollar Bend Points

Adjustment for Retirement Date

Early Retirement

Effect of Late Retirement

Earnings Reduction Formula

Annual Report of Earnings

Special Monthly Rule

Personalized Benefit Estimate

Impact of Private Pension

Direct Deposit

Social Security’s Payroll Tax or FICA - §3111 & §3121


Covered Earnings

Multiple Employers

Covered Employment


Tax after Retirement

Survivors Benefits



Who Is Eligible For Hospital Insurance (Part A)?

Who Can Get Medical Insurance (Part B)?

Prescription Drug Coverage (Part D)

How Do You Get Medicare?

What Does Medicare Pay For?

What Medicare Does Not Pay For?

Medigap Insurance


Social Security Disability Benefits

Family Members




General Disability Benefits

Americans with Disabilities Act of 1990

Disabled Access Credit - §44

Eligible Small Business

Eligible Access Expenditures

Credit Amount

Architectural & Transportation Barrier Removal - §190

Chapter 6 - Entities & Title

Basic Entity Formats

Individual & Sole Proprietorship

Marital Property

Timing & Domicile


Categories of C Corporations

Personal Holding Company - §541

Attribution Rules

Penalty Tax

Regular C Corporation

Corporate Tax Rate

No Pass-Through

Getting Money Out of the C Corporation

Passive Loss Restrictions

Partnership vs. Corporation

Personal Service Corporation - §269A

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



Title Holding

Business Trusts



Percentage Interests



Partnership Taxation

Allocation of Income & Deduction

Partnership Recapitalization

Two Class Format


Guaranteed Payment

Control & Management

Estate Issues

Family Partnerships

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

Employer Costs

Profit-Sharing Plan

Money Purchase Pension Plan

Defined Benefit Pension Plan



Chapter 7 - 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 8 - Property Dispositions

Capital Gains

Rates - §1

28% Rate Group

25% Rate Group - Unrecaptured §1250 Gain

15% (or sometimes 20%) Rate Group - Adjusted Net Capital Gain

Tax on Net Investment Income - §1411

Former 18% & 8% Rate Group (Repealed)

Deemed Sale Election (Repealed)


Small Business Stock

Netting of Capital Gains & Losses


Home Sales - §121

Two-Year Ownership & Use Requirements

Tacking of Prior Holding Period

Prorata Exception

Limitations on Exclusion

Installment Method




Mortgage in Excess of Basis

Wrap-around Indebtedness

Professional Equities Decision


Related Party Resale Rule

Related Persons


Depreciable Property

Contingent Payments or Price

Installment Sales Revision Act of 1980

Contingent Payment Sale

Maximum Selling Price Transactions


Fixed Payment Term Transactions


Transactions with Neither Maximum Selling nor Fixed Payment Term


Income Forecast Method



Special Rules


Repeal of Installment Treatment for Dealer Dispositions


Residential Lot & Timeshare Exception

Interest Computation


Installment Obligations in Excess of $5 Million

Computation of Interest



Disposition of Installment Obligations

Gain or Loss



Tax-Free Transfers

Imputed Interest & OID


Sale at a Loss

Section 483 - Imputed Interest


Imputed Interest Rates

Small Transaction Exception

Intra-family Land Exception


Sections 1271-1274 & OID

OID Rates


Cash Method Debt Instrument Exception

Computation of OID

Personal Use Property - Buyer’s Deduction of Imputed Interest

Section 1031 “Like Kind” Exchanges

Exchange Advantage

Importance of Deferral

Three Elements

Exchange Requirement

Two-Party Exchanges

Multi-party Exchanges



Delayed Exchanges

Qualified Property Requirement

Like-Kind Requirement

Rules of Boot

Related Party Exchanges

Definition of Related Party

Exceptions to the Two Year Rule

Contractual Protection

Transactions Between a Partner & Partnership

Foreign Real Property Exchanges

Qualified §1031 Exchange of Personal Property Repealed

Requirements for Personal Property - Prior to 2018

Like-Kind or Like-Class

Like-Kind Personal Property - Identical

Like Class Personal Property - General Asset or Product Class

Five, Four, Then Six Digit Product Classes

Other Personal Property

Multiple Asset Exchanges

Exchange Groups

Aggregation & Allocation

Delayed (Deferred) Exchange Regulations

Deferred (Delayed) Exchange Definition

Identification Requirements

Identification & Exchange Periods

Application of §7503

Method of Identification

Property Description

Incidental Property - 15% Rule


Substantial Receipt

Multiple Replacement Properties

Actual & Constructive Receipt Rule

Four Safe Harbors

Safe Harbor #1 - Security

Safe Harbor #2 - Escrow Accounts & Trusts

Disqualified Person

Who Is An Agent?

Safe Harbor #3 - Qualified Intermediary

Who Is A Qualified Intermediary?

Direct Deeding


Simultaneous Exchanges

Safe Harbor #4 - Interest

Interest Reporting - Section 468B(g)

Restrictions On Rights to Money & Other Property - “g(6)” Limitations

Outside Transfers of Money or Other Property

Exchanges of Partnership Interests

Effective Date of Partnership Provisions


Discharged Debt

Nonrecourse Indebtedness

Recourse Indebtedness


Form 1099A

Timing & Character of Gain or Loss



Lender’s Tax Impact

Foreclosure Sale

Mortgage Debt Relief Act of 2007

Qualified Principal Residence Indebtedness - §108(h)(2)

Mixed Indebtedness


Personal Property

Non-Installment Method Sales

Basis of Installment Obligation

Gain or Loss on Repossession

Installment Method Sales

Basis of Installment Obligation

Gain or Loss on Repossession

Basis of Repossessed Personal Property

Bad Debt

Real Property


Figuring Gain on Repossession

Limit on Taxable Gain

Repossession Costs

Indefinite Selling Price

Character of Gain

Basis of Repossessed Real Property

Holding Period for Resales

Buyer Improvements

Bad Debt

Seller’s Former Home Exception

Involuntary Conversions


Threat of Condemnation

Reports of Condemnation

Property Voluntarily Sold


Condemnation Award

Amounts Withheld From Award

Net Condemnation Award

Interest on Award

Payments to Relocate

Severance Damages

Treatment of Severance Damages

Expenses of Obtaining an Award

Special Assessment Withheld from Award

Severance Damages Included in Award

Gain or Loss from Condemnations

How to Figure Gain or Loss

Part Business or Part Rental

Postponement of Gain

Choosing to Postpone Gain

Cost Test

Replacement Period


Replacement Property Acquired Before The Condemnation


Time For Assessing a Deficiency

Related Party Rule

Chapter 9 - Retirement & Employee Benefits

Retirement Plans

Designing Your Retirement

Sources of Retirement Income

Qualified Corporate Programs

Defined Contribution Plans

Profit-Sharing Plan

Money Purchase Pension Plan

Stock Bonus Plan

Employee Stock Ownership Plan

401(k) Plan

Defined Benefit

Defined Benefit Pension

Annuity Plan


Self-Employed Plans

Individual Retirement Accounts

Roth IRA - §408A

Contributions to Roth IRAs


Excess Contributions

Taxation of Distributions

Qualified Distribution

5-Year Exception

Nonqualified Distributions


Rollovers & Conversions

Rollover from Traditional IRA

Allowable Rollovers

Income Taxation

Rollover Considerations


Transfer of Contributions

Waiting Period

Penalty-Free Withdrawals

Tax-Deferred Annuities


Types of Deferred Annuity

Fixed Annuity

Variable Annuity

Minimum Investment & Charges

Simplified Employee Pension (SEP) Plan

Investment Assets

Ultimate Question

Participant Loan Regulations

Additional Loan Requirements

DOL Regulations

Fringe Benefits

Old Dichotomy - Statutory v. Nonstatutory

Fringe Benefit Provisions

TRA ‘84 - §132


Only Statutory Benefits

No-Additional-Cost Services - §132(b)

Covered Employees

Line of Business Requirement


Qualified Employee Discounts - §132(c)

Manner of Discount

Real Estate & Investment Property Exclusion

Amount of Discount

Working Condition Fringes - §132(d)

Covered Employees



De Minimis Fringes - §132(e)

Subsidized Eating Facilities

Employee Achievement Awards - §74(c) & §274(j)


Definition of Employee Achievement Awards

Qualified Plan Award

Employer Deduction Limits

Aggregation Limit

Special Partnership Rule

Employee Impact

Group Term Life Insurance - §79

Dependent Care Assistance - §129

Amount of Assistance


Conflict with Dependent Care

Cafeteria Plans - §125


Qualified Benefits

Non-Qualified Benefits

Controlled Group Rules

Salary Reduction Plans


Meals & Lodging - §119

Income Exclusion

Convenience of Employer

Self-Insured Medical Reimbursement Plans - §105

Allowable Expenses




Employee Educational Assistance Programs - §127

Employer-Provided Automobile - §61 & §132

General Valuation Method

Annual Lease Value Method


Cents Per Mile Method

Commuting Value Method

Interest-Free & Below-Market Loans - §7872

Permissible Discrimination

Employee Needs

Imputed Interest

Types of Loans

Demand Loans

Term Loans

Application of §7872 and Rate Determinations


Moving Expenses & Reimbursement Suspended - §217

Financial Planning - §67 & §212



Tax Planning - §67 & §212


Estate Planning - §67 & §212

Death Benefit Payment - §101(b) Repealed

On-premises Athletic Facility - §132(j)(4)(B)

Employer-Provided Retirement Advice & Planning - §132

Home Office - §280A


Renting Space to Employer

Fringe Benefit Plans for S Corporations



Permanent Policies

Effect of Premium Payment

Key Employee Insurance

Medical Insurance

Retirement Plans


ERISA Compliance

Welfare Plans

Additional Requirements

Chapter 10 - Torts & Personal Injuries

Types of Torts

Intentional Torts

Unintentional Torts

Business Torts


Personal Injury Awards - §104

Personal Injury

Back Pay

Installment Payments

Nonphysical Personal Injury

Punitive Damages

Wrongful Death

Interest & Legal Fees

Chapter 11 - Wills & Probate

What Is A Will?

Provisions & Requirements

Specific & General Bequests

Residual Bequests

Conditional Bequests



Types of Wills

Title Implications


Joint Tenancy

Tenants in Common

Tenants by the Entirety

Community Property

Tax Basis Advantage

Untitled Assets

Changes to a Will

Advantages of a Will

Intestate Succession

Periodic Review

Continuing Business Operations

Simple Will




Probate Avoidance

Joint Tenancy

Community Property

Totten Trust Accounts

Life Insurance & Employee Benefits

Living Trusts

Chapter 12 - Trusts

What is a Trust?

Why a Trust?

Types of Trusts

Common Elements

Revocable Trust

Irrevocable Trusts

Testamentary Trust

Foreign Trusts - §679

Family Trusts

Medicaid Trust

Living Trust


Advantages of a Living Trust



Pour-Over Will

Trust Taxation

Income Tax

Grantor Trusts - §671 to §678

Grantor Retained Income Trust

Revocable Trusts Included in Estate - §646 & §2652(b)(1)

Election for Income Tax Purposes

Irrevocable Trust Taxation

Throwback Rules

Capital Gains

Deduction of Estate Planning Expenses

Deductibility of Death Expenses

Gift Tax

Estate Tax

Unlimited Marital Deduction

Outright to Spouse

Marital Deduction Trust

Qualified Terminable Interest Property (QTIP) Trust

“A-B” Format

“A-B-C” (QTIP) Format

Valuation & Tax Basis

Alternate Valuation

Fundamental Provisions - Revocable Living Trust

Identification Clause

Recital Clause

Property Transfer Clause

Income & Principal Clause

Revocation & Amendment Clause

Trustee Clause

Trustee’s Acceptance

Choice of a Trustee

Factors for Corporate Trustees

Factors for Individual Trustees

Trust Termination Clause



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