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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 150 ||| Review Questions: 120 ||| Final Exam Questions: 120 |
| CPE Credits : | 24.0 |
| IRS Credits : | 24 |
| Price : | $145.95 |
| Passing Score : | 70% |
| Course Type: | NASBA QAS - Text - Technical - NASBA Registry - IRS Enrolled Agents |
| Primary Subject-Field Of Study: | Taxes - Taxes for Course Id 206 |
| Description : | This tax preparation course examines the various ideas, methods, and techniques capable of optimizing the overall compensation package for key employees and principals in small to medium-sized businesses. Qualified and non-qualified deferred compensation, benefit targeting, insurance programs, statutory fringe benefits, interest-free loans, and investment planning are investigated. Effective pay plans essential to attract, motivate, and retain key people are defined and evaluated. Consideration is given to indirect compensation in the form of business entertainment, expense accounts, auto use, travel, and transportation. Equity participation is explored through stock sales, repurchase agreements, incentive stock options, ESOTs, stock options, and bonuses. The new field of professional services is probed to provide tax, financial, and estate planning to the key executive. |
| 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 : |
Cash Flow Definition
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 21-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 - 206 |
| Keywords : | Taxes, Getting, Cash, Out, Your, Business, 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. ASSIGNMENT SUBJECTChapter 1 Tax Economics At the start of Chapter 1, participants should identify the following topics for study:
* Tax planning elements * Taxable income * Tax-free income * Tax-deferred income * Tax-sheltered income * Budgeting * Cash * Acquisition * Assets * Management After reading Chapter 1, participants will be able to:
2. Recognize basic cash management techniques and how to generate tax-free income, identify ways to defer income, and specify techniques to shelter income. 3. Determine the importance of budgeting and rules to budget effectively, specify several cash usages, recognize financial acquisition guidelines for tax-advantaged investments, and specify multiple asset management rules. Chapter 2 Business Planning At the start of Chapter 2, participants should identify the following topics for study:
* Periodic review & goal setting * Team concept * Individual and corporate income tax rates * Capital gains & personal exemptions * Passive loss rules * Deferral of income * Acceleration of deductions * Avoiding taxable income * Unreasonable compensation After reading Chapter 2, participants will be able to:
2. Identify economic and tax trends particularly recent capital gain complexity and rate “baskets” and their varying taxation, and recognize the §469 “buckets” of income and loss that influence what a taxpayer can deduct against other income. 3. Specify several ways to defer income and accelerate deductions, and thereby expand business cash flow and planning opportunities. 4. Recognize the dangers of unreasonable compensation and its impact on deductions and distributions, and identify ways to avoid unreasonable compensation. Chapter 3 Deferred Compensation Plans At the start of Chapter 3, participants should identify the following topics for study:
* Advantages of nonqualified deferred compensation * Economic benefit of nonqualified deferred compensation * Tax consequences * Qualified deferred compensation – retirement plans * Basic requirements of a qualified pension plan * Basic types of corporate plans * Self-employed plans - Keogh * Individual plans - IRAs * SEPs and SIMPLE plans After reading Chapter 3, participants will be able to:
2. Identify client compensation decisions by specifying qualified deferred compensation restrictions, recalling the purposes, benefit formulas, and necessary contractual provisions for nonqualified plans., recognize the IRS’s position on nonqualified compensation, determine “constructive receipt” and “economic benefit”, and identify the differences among unfunded bare contractual promise plans, funded company account plans, and segregated asset plans. 3. Recognize qualified deferred compensation plans and nonqualified plans, the major benefit of the qualified deferred plans, and the basis of the benefits and contributions and, identify the current and deferred advantages and the disadvantages of corporate plans and fiduciary responsibilities and prohibited transactions. 4. Cite the requirements of the basic forms of qualified pension plans permitting clients to elect among such plans. 5. Identify defined contribution and defined benefit plans, specify the differences among the types of defined contribution plans, and recognize their effect on retirement benefits. 6. Determine the differences between self-employed and qualified plans identifying key choice of entity factors. 7. Cite the requirements of IRAs, SEPs, and SIMPLEs, and recognize tax-free Roth IRA distributions and where changes may be necessary to maximize plan benefits. Chapter 4 Basic Fringe Benefits At the start of Chapter 4, participants should identify the following topics for study:
* Employee achievement awards * Group term life insurance * Self-insured medical reimbursement plans * Medical insurance * Meals & lodging * Cafeteria plans * Employer-provided automobile * Adoption assistance program * Interest-free & below-market loans After reading Chapter 4, participants will be able to:
2. Specify the mechanics of typical fringe benefits, determine the fair market value of a fringe benefit under the general valuation rule or the special valuation rules, and identify the general accounting rule and the special two-month pour-over accounting rule. 3. Identify an “employee achievement award” under §274, and recognize the rules for group term life insurance under §79 and how to implement proper coverage. 4. Determine the mechanics of self-insured medical reimbursement plans under §105, and specify the requirements of medical insurance under §106 specifying differences. 5. Identify the rules for excluding the value of meals and lodging under §119, and “cafeteria plans” and how they operate. 6. Recognize the requirements and limits of employee educational assistance programs and dependent care assistance and how to obtain each type of assistance. 7. Identify “no-additional-cost services” and determine what property or services are excludable from income as qualified employee discounts under §132(c), and specify exceptions to working condition fringes and de minimis fringes. 8. Determine the requirements for qualified transportation fringe benefits under §132(f), specify valuation methods for employer-provided automobiles, and identify the qualifications for the popular physical fitness exclusion, and the requirements and benefits of adoption assistance programs. 9. Recognize planning services available under §§132, 212, and 67, determine interest-free and below-market loans, identify child care benefits and corporate-funded educational savings accounts, specify S corporation fringe benefits, and identify ERISA compliance requirements. Chapter 5 Business Entertainment At the start of Chapter 5, participants should identify the following topics for study:
* Statutory exceptions * Former ticket purchase rules * Percentage reduction for meals & entertainment * Entertainment facilities * Substantiation & record keeping * Employee expense reimbursement & reporting * Self-employed persons * Employers After reading Chapter 5, participants will be able to:
2. Determine what constitutes an “entertainment facility,” identify substantiation, recordkeeping, reimbursement, reporting requirements, and variations in methods, specify how to itemize non-reimbursed employee expenses, and identify the special reporting rules for self-employed persons and employers. Chapter 6 Business Travel & Transportation At the start of Chapter 6, participants should identify the following topics for study:
* Definition of “tax home” * Temporary & indefinite assignments * Away from home requirement * Business purpose requirement for business travel * Convention & meetings * Cruises & luxury water travel * Automobiles * Actual cost method * Standard mileage method After reading Chapter 6, participants will be able to:
2. Recognize how time acts as a critical factor in distinguishing a temporary from an indefinite job assignment, cite the “away from home” requirement, and determine the factors associated with the business purpose requirement. 3. Identify deductible meals, lodging, conventions, and meetings and related necessary compliance issues, specify the special requirements for cruises, determine the treatment of luxury water travel, recognize auto usage as a component of travel, cite the requirements for family member travel expenses and recognize the interplay of the "no additional cost" rule to ensure taxpayer compliance with §274. Chapter 7 Insurance At the start of Chapter 7, participants should identify the following topics for study:
* Group term life insurance * Retired lives reserve * Split-dollar life insurance * Medical & dental insurance * Disability income insurance * Interest limitation on policy loans * Self-employed health insurance deduction * Capitalized insurance * Health savings account After reading Chapter 7, participants will be able to:
2. Determine the requirements and restrictions pertaining to the interest limitation on policy loans under §264, the interest limitation for tax-exempt interest income under §265, the conditions under which business owners may fully deduct amounts paid for medical and dental insurance and qualified long-term care insurance, recognize the application of the uniform capitalization rules, and identify the basic mechanics of health savings accounts. Chapter 8 Equity Participation At the start of Chapter 8, participants should identify the following topics for study:
* Section 83 * Stock appreciation rights plan * Qualified incentive stock options * Golden parachute agreements * Buy-sell agreements * Entity & cross-purchase agreements * Estate tax valuation * Funding the buy-sell agreement * Purchase price & terms After reading Chapter 8, participants will be able to:
2. Identify the taxation and use of nonqualified stock options under §83 and the mechanism for stock appreciation rights (SARs) plans. 3. Recognize the requirements of §422A which ensure that a qualified incentive stock option is available, and recall changes the TRA ’86 made to the golden parachute rules and their effect on what constitutes a parachute payment. 4. Determine tax-advantaged entity purchase and cross-purchase agreements, recognize the importance of funding a buy-sell agreement, and determine the value of closely held stock. Chapter 9 Estate Planning At the start of Chapter 9, participants should identify the following topics for study:
* Applicable exclusion amount * Stepped-up basis * Basic estate planning goals * Simple will * Types of trusts * Charitable trusts * Insurance trusts * Family documents * Private annuities After reading Chapter 9, participants will be able to:
2. Determine a “stepped-up basis” comparing the former “modified carryover basis” rules for estate tax purposes and identify the basis increase for certain business property. 3. Specify several basic estate planning goals and identify the benefits and drawbacks of the primary dispositive plans. 4. Recognize the various types of trusts and items necessary in business estate planning, specify multiple family estate documents that every taxpayer should consider, and identify the advantages and disadvantages of private annuities for the transferor and the transferee. |
| Course Contents : | Chapter 1 - Tax Economics Financial Fundamentals Tax Planning Elements Assets, Income, & Cash Income Taxable Income Splitting/Matching Tax-free Fringe Benefits Tax-deferred Section 1034 Sale or Exchange of Residence - Repealed Section 1031 “Like-Kind” Exchanges Options Deferred Compensation Qualified Corporate Retirement Plans Self-employed Plans Individual Retirement Accounts Installment Sales Tax-sheltered Age 55 Exclusion - Repealed Home Sale Exclusion - §121 Municipal Bonds Gifts & Inheritances Life Insurance Budgeting Rule #1: Expenses - 60% Rule #2: Taxes - 20% Rule #3: Savings - 10% Rule #4: Education - 10% Cash Acquisition Assets Management Chapter 2 - Business Planning Perspective Financial Planning Overall Compensation Planning Periodic Review & Goal Setting Employer Objectives Targeting Employee Objectives Common Objectives Small Companies Larger Companies Team Concept Leader of the Pack General Tax Strategies Income Tax Rates Individual Rates Corporate Tax Rates Current Rate - 21% Capital Gains & Dividends - §1(h) Rates - §1 Exemptions & Phaseout (Suspended) Phase-Out of Exemptions Standard Deduction W-4 Forms Passive Loss Rules Categories of Income & Loss Exclusion of Personal Service Income Deferral of Income Equivalent To an “Interest-free” Loan Tax Bracket Straddle Tax Savings v. Loss of Buying Power Protecting Deferred Amounts Tax Deferral Is Not Elimination Bottom Line Acceleration of Deductions Time Value of Deductions Special Treatment of Fringe Benefits Avoiding Taxable Income Excluded Statutory Fringe Benefits Foreign Earned Income Housing Exclusion Ministers Worker’s Compensation Personal Injury Employee Death Benefits - Repealed Unreasonable Compensation Overall Limitation Scope of Examination Factors Employee’s Qualifications Size of the Business Employee’s Compensation History Services Performed by the Employee Miscellaneous Factors Chapter 3 - Deferred Compensation Plans Can You Afford The Deferral? Mandatory v. Voluntary Plans Types of Deferred Compensation Funded Unfunded Qualified Nonqualified Forfeitable Nonforfeitable Nonqualified Deferred Compensation Postponement of Income Advantages IRS Scrutiny & Approval Nondiscrimination ERISA Funding No Immediate Cash Outlay Annual Report Notice Requirement Purposes Benefit Formula Incentive Deferred Bonuses Contractual Arrangement Necessary Provisions Tax Status Service’s Position Rationale Congressional Moratorium No Ruling or Regulation Policy Constructive Receipt Beyond Actual Receipt Simple Set Asides Are Not Possible Revenue Ruling 60-31 Regulations Time & Control Concept Control Timing After the Fact Contract Amendment to Existing Contract Economic Benefit Has Something of Value Been Transferred? Insurance Coverage Has a Calculable Value Segregated Funds Have Immediate Economic Value Value v. Control Revenue Ruling 60-31 Situation 1 Situation 2 Situation 3 Situation 4 Situation 5 General Principles Unfunded Bare Contractual Promise Plan - Type I Risk Funded Company Account Plan - Type II Ownership & Segregation Bookkeeping Reserve or Separate Account Employee Bears Economic Risk Limited Protection Investment of Deferred Amounts Life Insurance Premiums Third Party Guarantees Segregated Asset Plan - Type III Section 83 Approach Tight Rope Format Transferable or Not Subject To A Risk of Substantial Forfeiture Substantial Restrictions Redemption or Forfeiture Condition Related to a Purpose of the Transfer Noncompetition Consultation Time Alone is Not Enough Realization & Taxation 30-Day Election Period Deduction Allowed Timing Withholding Tax Consequences Reciprocal Taxation/Deduction Rule No Difference between Cash or Accrual Separate Accounts for Two or More Participants Employer Deduction Traps Income Tax on Employer Held Assets Inclusion in Income under §409A State Tax Issues Accounting Two Sets of Rules Financial Accounting Rules IRS Rules Estate Planning Considerations Death during Deferral Income Tax Consequences Estate Tax Consequences Gift Tax Consequences Withholding, Social Security & IRA’s Other Payroll Taxes Social Security Benefits IRA’s Qualified Deferred Compensation - Retirement Plans Qualified Deferred Compensation Qualified v. Nonqualified Plans Major Benefit Current Deduction Timing of Deductions Part of Total Compensation Compensation Base Salary Reduction Amounts Benefit Planning Corporate Plans Advantages Current Deferred Disadvantages Employee Costs Comparison with IRAs & Keoghs Basic ERISA Provisions ERISA Reporting Requirements Fiduciary Responsibilities Bonding Requirement Prohibited Transactions Additional Restrictions Fiduciary Exceptions Loans Employer Securities Excise Penalty Tax PBGC Insurance Sixty-Month Requirement Recovery Against Employer Termination Proceedings Plans Exempt from PBGC Coverage Basic Requirements of a Qualified Pension Plan Written Plan Communication Trust Requirements Permanency Exclusive Benefit of Employees Highly Compensated Employees Reversion of Trust Assets to Employer Participation & Coverage Age & Service Coverage Percentage Test Ratio Test Average Benefits Test Numerical Coverage Related Employers Vesting Full & Immediate Vesting Minimum Vesting Nondiscrimination Compliance Contribution & Benefit Limits Defined Benefit Plans (Annual Benefits Limitation) - §415 Defined Contribution Plans (Annual Addition Limitation) - §415 Limits on Deductible Contributions - §404 Assignment & Alienation Miscellaneous Requirements Basic Types of Corporate Plans Defined Benefit Mechanics Defined Benefit Pension Defined Contribution Mechanics Discretion Favorable Circumstances Types of Defined Contribution Plans Profit-Sharing Requirements for a Qualified Profit-Sharing Plan Written Plan Eligibility Deductible Contribution Limit Substantial & Recurrent Rule Money Purchase Pension Cafeteria Compensation Plan Thrift Plan Section 401(k) Plans Death Benefits Defined Benefit Plans Money Purchase Pension & Target Benefit Plans Employee Contributions Non-Deductible Life Insurance in the Qualified Plan Return Universal Life Compare Plan Terminations & Corporate Liquidations 10-Year Rule Lump-Sum Distributions Asset Dispositions IRA Limitations Self-Employed Plans - Keogh Contribution Timing Controlled Business General Limitations Effect of Incorporation Mechanics Parity with Corporate Plans Figuring Retirement Plan Deductions For Self-Employed Self-Employed Rate Determining the Deduction Individual Plans - IRAs Deemed IRA Mechanics Phase-out Special Spousal Participation Rule - §219(g)(1) Spousal IRA Eligibility Contributions & Deductions Employer Contributions Retirement Vehicles Distribution & Settlement Options Life Annuity Exemption Minimum Distributions Required Minimum Distribution Definitions Required Minimum Distributions during Owner’s Lifetime Sole Beneficiary Spouse Who Is More Than 10 Years Younger Required Minimum Distributions in Year of the Owner's Death Beneficiaries - Distributions after Owner’s Death Estate Tax Deduction Charitable Distributions from an IRA Post-Retirement Tax Treatment of IRA Distributions Income In Respect of a Decedent Estate Tax Consequences Losses on IRA Investments Prohibited Transactions Effect of Disqualification Penalties Borrowing on an Annuity Contract Tax-Free Rollovers Rollover from One IRA to Another Waiting Period between Rollovers Partial Rollovers Rollovers from Traditional IRAs into Qualified Plans Rollovers of Distributions from Employer Plans Withholding Requirement Waiting Period between Rollovers Conduit IRAs Keogh Rollovers Direct Rollovers From Retirement Plans to Roth IRAs Rollovers of §457 Plans into Traditional IRAs Rollovers of Traditional IRAs into §457 Plans Rollovers of Traditional IRAs into §403(B) Plans Rollovers from SIMPLE IRAs Roth IRA - §408A Eligibility Contribution Limitation Roth IRAs Only Roth IRAs & Traditional IRAs Conversions Recharacterizations Reconversions Taxation of Distributions No Required Minimum Distributions Simplified Employee Pension Plans (SEPs) Contribution Limits & Taxation SIMPLE Plans 3 SIMPLE IRA Plan Employee Limit Other Qualified Plan Set up Contribution Limits Salary Reduction Contributions Employer Matching Contributions Deduction of Contributions Distributions SIMPLE §401(k) Plan Chapter 4 - Basic Fringe Benefits Concept Definition of Income - §61 Deductions without Taxable Income Benefit Mechanics Old Dichotomy - Statutory v. Nonstatutory Fringe Benefit Provisions TRA ‘84 - §132 Discrimination Only Statutory Benefits Remain General Valuation Rule Fair Market Value Special Valuation Rules Restrictions on Special Valuation Rules Withholding & Accounting General Accounting Rule Special 2-Month Pour-Over Accounting Rule Same-Sex Marriage Types of Benefits Employee Achievement Awards - §74(c) & §274(j) Exclusion Definition of Employee Achievement Awards Tangible Personal Property Qualified Plan Award Employer Deduction Limits Aggregation Limit Special Partnership Rule Employee Impact Group Term Life Insurance - §79 Monthly Cost Table Family Member Cost Employment Taxes Group Requirements Employee Permanent Benefits Discriminatory Plan Eligibility Type & Amount of Benefits Key Employee Self-Insured Medical Reimbursement Plans - §105 Allowable Expenses Requirements Benefits Reporting Exposure Medical Insurance - §106 Group Health Plan Restrictions - COBRA Coverage Requirement Continuation Requirement American Recovery & Reinvestment Act Exemptions Continuation Period Notice Meals & Lodging - §119 Convenience of Employer Substantial Nonpay Reasons Meals with a Charge Lodging Required by Employer Highly Compensated Employees 50% Limit on Meals Cafeteria Plans - §125 Definition Qualified Benefits Non-Qualified Benefits Controlled Group Rules Salary Reduction Plans Nondiscrimination Highly Compensated Participants Key Employees Timing Reporting Requirements Employee Educational Assistance Programs - §127 Requirements Educational Assistance Dependent Care Assistance - §129 Amount of Assistance Requirements 55% Test Reporting Conflict with Dependent Care No-Additional-Cost Services - §132(b) Covered Employees Line of Business Requirement Definition Reciprocal Agreements Nondiscrimination Highly Compensated Employee Qualified Employee Discounts - §132(c) Manner of Discount Real Estate & Investment Property Exclusion Amount of Discount Nondiscrimination Working Condition Fringes - §132(d) Covered Employees Additions to Exclusion Substantiation Exceptions De Minimis (Minimal) Fringes - §132(e) Subsidized Eating Facilities Qualified Transportation Disallowed- §132(f) Commuter Highway Vehicle Transit Pass Qualified Parking Exclusion Limits Employer Provided Automobile - §132 & §61 General Valuation Method Special Method #1 - Lease Value Annual Lease Value Fair Market Value Safe Harbor Value Items Included in Annual Lease Value Table Prorated Annual Lease Value Daily Lease Value Special Method #2 - Cents Per Mile Regular Use Mileage Rule Items Included In Cents-Per-Mile Rate Special Method #3 - Commuting Value Control Employee Employer-Provided Transportation in Unsafe Areas Qualified Employee On-premises Athletic Facility - §132(j)(4)(B) Adoption Assistance Program - §137 Employment Taxes Conflict with Adoption Credit Eligible Child Child with Special Needs Limits on the Exclusion Dollar Limit Income Limit Timing Employer-Provided Retirement Advice & Planning - §132 Financial Planning - §212 & §67 Popularity Taxation Tax Planning - §212 & §67 Taxation Estate Planning - §212 & §67 Moving Expense Reimbursement Suspended- §217 Statement to Employees 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 Summary 25% Credit Allowed For Employer Child Care Facilities Corporate Funded Educational Savings Accounts Family & Medical Leave - §45S Employer-Provided Cell Phones - §132(a) Noncompensatory Business Purposes Fringe Benefit Plans for S Corporations ERISA Compliance Welfare Plans Additional Requirements Chapter 5 - Business Entertainment Pre-2018 Entertainment Former Directly Related Test Clear Business Setting Presumption Former Associated Test Substantial Business Discussion Timing Conventions Statutory Exceptions Miscellaneous Former Entertainment Provisions Home Entertainment Expenses Expense for Spouses Of Out Of Town Business Guests Ticket Purchase Face Value Restriction Charitable Sports Events Exception Skyboxes One Event Rule Related Parties Food & Beverages Employee Business Expenses Post-2018 Entertainment Statutory Exceptions - §274(e) Food and Beverages for Employees Expenses Treated as Compensation Reimbursed Expenses Recreational Expenses for Employees Employee, Stockholder, and Business Meetings Trade Association Meetings Items Available to Public Entertainment Sold to Customers Expenses Includible in Income of Non-employees Lavish or Extravagant Restriction Ordinary & Necessary Requirement Percentage Reduction for Meals - §274(n)(1) Application of Reduction Rule Exceptions - §274(n)(2) Employee Business Expenses Subject to 2% Floor Suspended Form 2106 Restricted Entertainment Facilities Exceptions Covered Expenses Club Dues OBRA '93 & TCJA Sales Incentive Awards Substantiation & Record Keeping - §274(d) Documentation Payback Agreements Employee Expense Reimbursement & Reporting TRA '86 - Unreimbursed Expenses Become Itemized Deductions Family Support Act - Reimbursement Without Accounting Is Income Accountable Plans Reasonable Period of Time Fixed Date Safe Harbor - #1 Period Statement Safe Harbor - #2 Adequate Accounting Per Diem Allowance Arrangements Federal Per Diem Rate Related Employer Restriction Usage & Consistency Unproven or Unspent Per Diem Allowances Reporting Per Diem Allowances Reimbursement Not More Than Federal Rate Reimbursement More Than Federal Rate Nonaccountable Plans Self-Employed Persons Expenses Related to Taxpayer's Business Reimbursed Expenses Incurred on Behalf of a Client With Adequate Accounting Without Adequate Accounting Employers When Can an Expense Be Deducted? Economic Performance Rule Nondeductible Meals Employer-Provided Auto Chapter 6 - Business Travel & Transportation Concept Transportation and Travel Distinguished Travel Expenses Transportation Expenses Definition of “Tax Home” Circuit Court Test IRS Test Employment Area No Tax Home Itinerant Worker Two Work Locations Temporary & Indefinite Assignments Temporary Assignment Indefinite Assignment Time Prior Law Presumptions One-Year IRS Presumption Less than Two-Year Exception Regular Home Temporary Job That Became Permanent Current Law - One-Year Rigid Time Rule Away From Home Requirement Sleep & Rest Rule Correll Case Business Purpose Requirement All or Nothing Primarily for Business Test Time Other Factors Existing Trade or Business 51/49 Percent Test Domestic Business Travel Foreign Business Travel Personal Pleasure Primarily Business Full Deduction Definition of Business Day Meals & Lodging 50% Deduction Limitation Conventions and Meetings Agenda Test Foreign Conventions Factors North American Area Allowable Expenses Cruises Deduction Limitation Reporting Statements Luxury Water Travel Exceptions Family Member Travel Expenses Automobiles Apportionment of Personal & Business Use Actual Cost Method Deduction Limitations Definition of Car Depreciation and Expensing Placed in Service MACRS - 5 (Actually 6) Years 200% Double Declining Balance Method Depreciation (“Caps”) Limits - §280F(a) Deduction in Years after the Recovery Period Bonus (or Additional First Year) Depreciation - §168(k) Expensing Limits - §179 Investment Tax Credit – Gone, Gone, Gone Predominate Business (More Than 50%) Use Rule Qualified Business Use More Than 50% Use Test Limitations Recapture ITC Recapture - Highly Unlikely Excess Depreciation Recapture Leasing Restrictions Cars Leased After 1986 Standard Mileage Method Limitations on Standard Mileage Method Must be an Individual Alternating Use Husband & Wife Switching Methods Charitable Transportation Medical Transportation Chapter 7 - Insurance Company Paid Insurance Popularity Types of Life Insurance Group Term Life - §79 Requirements Cost Of Group-term Life Insurance “Key Employee” Defined Retired Lives Reserve Revenue Ruling 68-577 Taxation Split-Dollar Life Low-Cost Term Insurance Regulatory Requirements Taxation Death Benefit Only Plan - Repealed Business Travel Accident Insurance Medical & Dental Insurance Premiums Disability Income Insurance Interest Limitation on Policy Loans - §264 Deductibility of Premiums & Interest on Life Insurance Exclusion Of Inside Buildup & Amounts Received Premium Deduction Limitation Interest Deduction Disallowance With Respect To Life Insurance Prorata Disallowance of Interest on Debt to Fund Life Insurance Interest Limitation for Tax-Exempt Interest Income Other Selected Insurances Self-Employed Health Insurance Deduction Long-Term Care Premiums Capitalized Insurance Health Savings Accounts Small Business Health Insurance Expense Tax Credit - §45R Chapter 8 - Equity Participation Perspective Stock Sales or Unrestricted Stock Plan Stock Plans Stock Bonus ESOT Phantom Stock Advantages Comparison with Profit-Sharing Plans Repurchase or Restricted Stock Agreement Stock Options Section 83 Risk of Forfeiture Election Stock Appreciation Rights Plans Tandem Plans Qualified Incentive Stock Option Requirements Golden Parachute Agreements Small Business Buy Sell Agreements Definition Professional Corporations Marketability Problems Controlled Disposition Entity & Cross-Purchase Agreements Stepped-Up Basis Resulting Equity Ownership Attribution & Constructive Ownership Rules Estate Tax Valuation Using the Buy-Sell Agreement to Set Value Section 2703 Restrictions Exceptions to §2703 Arm’s Length Bargain Enforcement of Contract Price Basis Joint ownership Funding the Buy-Sell Agreement Life Insurance Funding Term vs. Whole Life Policy Ownership Premium Payment Purchase Price & Terms Valuation Chapter 9 - Estate Planning Unlimited Marital Deduction Outright To Spouse Marital Deduction Trust Qualified Terminable Interest Property (QTIP) Trust Applicable Exclusion Amount Spousal Portability of Unused Exemption Amount - §2010(c)(2) Stepped-up Basis - §1014 Former Modified Carryover Basis Rules - §1022 Property to Which the Former Modified Carryover Basis Rules Applied Limited Basis Increase for Certain Property 2010 Special Election Basic Estate Planning Goals Primary Dispositive Plans Simple Will Danger for Larger Estates Probate Assets Not Subject to a Will Assets Subject to a Will Trusts Types of Trusts Living Trusts Testamentary Trusts Revocable & Irrevocable Living “A-B” Revocable Trust Living “A-B-C” (QTIP) Trust Impact of Spousal Portability on Trust B under TUIRJCA Charitable Trusts Charitable Remainder Trusts Charitable Income Trusts Insurance Trusts Family Documents Living Will Property Agreement & Inventory Durable Power Of Attorney Power of Attorney for Health Care Conservatorship Funeral Arrangements Anatomical Gifts Private Annuity? Advantages to the Transferor Disadvantages to the Transferor Advantages to the Transferee Disadvantages to the Transferee Regulations Restrict Private Annuity Income Glossary |
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