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Guide to Federal Corporate and Individual Taxation (Course Id 201)

QAS / Registry / EA   Add to Cart 
Author : Danny C Santucci, JD
Status : Production
CPE Credits : 35.0
IRS Credits : 35
Price : $164.95
Passing Score : 70%
Course Type: NASBA QAS - Text - Technical - NASBA Registry - IRS Enrolled Agents
Primary Subject-Field Of Study:

Taxes - Taxes for Course Id 201

Description :

Designed to make the practitioner comfortable with “high traffic” issues, this program enables participants to discuss and handle business/personal tax essentials. The course examines and explains the practical aspects of individual & corporate planning, bridging the gap between theory and application. Significant new developments are summarized with emphasis on tax savings ideas. This course examines and explains the practical aspects of using the closely held corporation to maximize after-tax return on business operations. Recent developments giving corporations a competitive edge over other entities are explored and detailed. Practitioners are alerted to often missed fringe benefits, retirement planning opportunities, corporate business deductions, income splitting possibilities and little-known estate planning techniques.

Usage Rank : 0
Release : 2020
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 : 10-Jul-2020
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 - 201

Keywords : Taxes, Guide, Federal, Corporate, Individual, Taxation, cpe, cpa, online course
Learning Objectives :
    To view Learning Objectives, please Click here.
Course Contents :

Chapter 1 - Individual Tax Elements

Federal Income Taxes: A Description

Application of U.S. Individual Income Tax

Gross Income

Adjusted Gross Income (AGI)

Taxable Income

Standard Deduction

Itemized Deduction

Personal Exemptions

Filing Status

Rates & Tax Liability

Tax Credits

Rates, Tables, & Statutory Amounts

Income Tax Rates - 1

Marriage Penalty - Mostly Gone

Standard Deduction - 63

Dependent Limit - 63(c)(5)

Personal Exemptions & Phaseout (Suspended) - 151

Limitation on Itemized Deductions - 68

Earned Income Tax Credit - 32

Disqualified Income - 32(i)

Means-Tested Programs

Social Security & Self-Employment Earnings Base

Standard Mileage Rate

Qualified Transportation Fringes

Passenger Automobile Depreciation Limits (CAPS)

Expensing Deduction - 179

Self-Employed Health Insurance Deduction

Corporate Income Tax Rates

1993 Through 2017:

2018 & Later: 21%

Withholding & Estimated Tax

Estimated Tax - 6654

Social Security, Medicare & FUTA (or Payroll) Taxes

FICA - 3111 & 3121

Temporary Employee OASDI Cut

SECA - 1401

Temporary Sole Employer OASDI Cut

Wage Base

Additional Hospital Insurance Tax On Certain High-Income Individuals

Final Regulations TD 9645

FUTA - 3301 & 3306

Filing Status

Marital Status

Single Taxpayers

Divorced Persons

Sham Divorce

Annulled Marriages

Married Taxpayers

Same-Sex Marriage

Marriage Penalty - Mostly Gone

Spouses Death

Married Persons Living Apart

Filing Jointly

Joint Liability

Innocent Spouse Exception

Nonresident Alien

Filing Separately

Special Rules

Joint Return after Separate Returns

Separate Returns after Joint Return


Head of Household


Requirements of 2(b)

Considered Unmarried

Keeping Up a Home

Qualifying Person


Qualifying Widow(er) With Dependent Child

Gross Income


Fringe Benefits

Rental Income

Advance Rent

Security Deposits

Payment for Canceling a Lease

Social Security Benefits

Taxability of Benefits

Alimony & Spousal Support to Change in 2019

Restrictions & Requirements Prior to 2019

Pre-2019 Recapture

Child Support

Prizes & Awards - 74 & 274

Dividends & Distributions

Ordinary Dividends

Money Market Funds

Dividends on Capital Stock

Dividends Used to Buy More Stock

Qualified Dividends

Capital Gain Distributions

Undistributed Capital Gains

Form 2439

Basis Adjustment

Real Estate Investment Trusts (REITs)

Nontaxable Distributions

Return of Capital

Basis Adjustment

Liquidating Distributions

Distributions of Stock and Stock Rights

Taxable Stock Dividends and Stock Rights

Discharge of Debt Income

Exceptions from Income Inclusion

Reduction of Tax Attributes

Order of Reductions


Nonrecourse Indebtedness

Recourse Indebtedness

Mortgage Relief Act of 2007

Principal Residence

Qualified Principal Residence Indebtedness

Acquisition Indebtedness


Barter Exchange

Backup Withholding


Itemized Deduction Recoveries

Recovery Limited to Deduction

Recoveries Included in Income

Non-Itemized Deduction Recoveries

Amounts Recovered for Credits

Tax Benefit Rule

Children's Income

Earned Income - 73

Unearned Income

"Kiddie" Tax - 1(g)

Application, Threshold & Impact

Election to Report on Parents Return - 1(g)(7)(A) [Form 8814]

Election Situations


AMT Exemption for Children - 59(j)

Exclusions from Income

Educational Savings Bonds - 135

Income Exclusion



Notice 90-7

Education Expenses

Excludable Interest

Forms 8818 & 8815

Scholarships & Fellowships - 117


Work Learning Service Programs

Scholarship Prizes

Education Expenses

Education Assistance Programs - 127

Employer Educational Trusts - 83

Qualified Tuition Programs (QTP) - 529

Gift & Inheritance Exclusion

Subsequent Income


Business Gifts




Purchase for Value

Installment Payments

Specified Number of Installments

Specified Amount Payable

Installments for Life

Personal Injury Awards - 104

Personal Injury

Emotional Distress

Punitive Damages

Tax Benefit Rule - 111

Interest State & Local Obligations - 103

Foreign Earned Income Exclusion - 911

Nonbusiness & Personal Deductions

Itemized Deductions

Limitation on Itemized Deductions Suspended - 68

Personal & Dependency Exemptions Suspended - 151

Deemed Personal Exemption for Related Incorporating Provisions

Personal Exemptions

Dependency Exemptions

Dependency Before 2005

Dependency After 2004 & Before 2018 Suspension

Residency Test


Relationship Test

Age Test

Joint Return Prohibition


Phaseout of Exemptions

Interest Expense - 163

Personal Interest - 163(h)(1)



Investment Interest - 163(d)


Net Investment Income Limitation

Qualified Residence Interest - 163(h)(3) [Form 8598]



Acquisition Indebtedness Modified

Home Equity Indebtedness Restricted


Home Improvements


Alternative Minimum Tax Co-ordination


Home Purchase & Improvement Exception


Huntsman Case

Mortgage Interest Statement

Business Interest - 163(j)

Allocation of Interest Expense

Education Expenses

Educational Transportation

Educational Travel

Meal Expenses

Investment Seminars

Higher Education Expense Deduction - 222

Dollar Limitation & Phase Out

Educator Expenses - 62

Medical Expense Deductions - 213 [Schedule A]

Items Deductible

Items Not Deductible

Medical Insurance Premiums

Medicare Part A

Medicare Part B

Medicare Part D

Prepaid Insurance Premiums

Meals & Lodging

Expenses of Transportation

Permanent Improvements

Spouses, Dependents & Others

Reimbursement of Expenses

Long-Term Care Provisions

Long-Term Care Payments - 7702B(d)(4)

Long-Term Care Premiums - 213(d)(10)

IRA Withdrawals for Certain Medical Expenses

ABLE Accounts - 529A


Charitable Contributions - 170 [Schedule A]

Requirements for Deductibility

Qualified Organizations

Limitations on Contributions

Five-year Carryover

Contributions of Cash

Benefits Received

Benefit Performances

Athletic Event Seating Rights Repealed

Raffle Tickets, Bingo, Etc.

Dues, Fees, or Assessments

Contribution of Property

Clothing & Household Goods

Ordinary Income or Short-Term Capital Gain Type Property


Capital Gain Type Property


Conservation Easements

Loss Type Property

Vehicle Donations

Fractional Interests

Other Types of Contributions

Charitable Distributions from IRAs - 408


Cash Contributions

Contributions Less Than $250

Contributions of $250 or More

Payroll Deduction Records

Noncash Contributions

Deductions of Less Than $250

Additional Records

Deductions of At Least $250 But Not More Than $500

Deductions Over $500 But Not Over $5,000

Deductions over $5,000

Contributions over $75 Made Partly for Goods or Services

Deduction for Taxes - 164 [Schedule A]

Income Taxes

Real Property Tax

Accrual Method Taxpayers

State & Local Sales Tax Deduction - 164

Personal Property Tax

Other Deductible Taxes

Examples of Non-Deductible Taxes

Casualty & Theft Losses - 165 [Schedule A]


Proof of Loss

Amount of Loss

Insurance & Other Reimbursements


Allocation for Mixed Use Property

2% Itemized Deductions Suspended - 67 [Schedule A]

Deductions - Subject to 2% Limit

Deductions Not Subject To 2% Limit

Nondeductible Expenses

Moving Expenses Suspended - 217

Distance Test

Time Test

Time Test for Employees

Time Test for Self-employment

Deductible Expenses

Travel Expenses

Travel by Car

Location of Move




Dependent Care Tax Credit - 21 [Form 2441]


Employment Related Expenses

Qualifying Out-of-the-home Expenses

Payments to Relatives

Allowable Amount

Dependent Care Assistance - 129


Earned Income Tax Credit - 32 [Form 1040]

Persons with Qualifying Children

Persons without a Qualifying Child



Disqualified Income - 32(i)

Means-Tested Programs

Adoption Credit - 23 & 137

Qualified Adoption Expenses

Exclusion from Income for Employer Reimbursements - 137

Child Tax Credit - 24

Credit Amount

Qualifying Child

$500 Credit for Certain Dependents - 24(h)(4)(A)


Refundable Child Care Credit Amount

AMT & Child Tax Credit

Hope & Lifetime Learning Credits - 25A

Lifetime Learning Credit - 25A(a)(1)

Phase Out - 25A(d)(2)

Hope (with American Opportunity modifications) Credit

Phase Out - 25A(d)(2)


Ministers & Military - 107


Rental Value of a Home

Members of Religious Orders

Military & Veterans

Wages - 61

Nontaxable Income - 134

Veterans Benefits - 134

Chapter 2 - Property Transfers & Retirement Plans

Sales & Exchanges of Property

Sale or Lease


Capital Gains & Losses

Capital Assets - 1221

Capital Gains & Qualified Dividends Rate 1(h)

Holding Periods - (1222 & 1223)

Capital Losses - 1211

Business Property

Basis of Property

Basis Adjustments

Property Received as a Gift

Property Received by Inheritance

Changes in Property Usage

Stocks & Bonds

Sale of Personal Residence - 121

Two-Year Ownership & Use Requirements

Tacking of Prior Holding Period

Prorata Exception

Limitations on Exclusion

Reduced Home Sale Exclusion for Periods of Nonqualified Use


Nonqualified Use

Post-May 6, 1997 Depreciation

Surviving Spouse Home Sale Exclusion

Installment Sales - 453

General Rules

Dealer Sales

Unstated Interest

Related Parties - 453(e)

Disposition of Installment Notes - 453B

Determining Installment Income

Pledge Rule

Escrow Account

Depreciation Recapture

Like-Kind Exchange

Repossessions - 1038

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

Bad Debt

Sellers Former Home Exception

Involuntary Conversions - 1033


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

At Risk Limits for Real Estate - 465

Amount At Risk

Qualified Nonrecourse Financing

Section 1031 Like-Kind Exchanges

Statutory Requirements & Definitions

Qualified Transaction - Exchanges v. Sales

Held for Productive Use or investment

Investment Purpose

Statutory Exclusions from 1031

Like-Kind Property

Nature or Quality of Property

Like-Kind Status for Personal Property Repealed

Real v. Personal Property

The Concept of Boot

Realized Gain

Recognized Gain

Limitation on Recognition of Gain under 1031

The Definition of Boot

The Rules of Boot

Property Boot

Mortgage Boot

Netting Boot - The Rules of Offset

Property Boot Given Offsets Any Boot Received

Mortgage Boot Given Offsets Mortgage Boot Received

Mortgage Boot Given Does Not Offset Property Boot Received

Revenue Ruling 72-456 & Commissions

Gain or Loss on Boot

Basis on Tax-Deferred Exchange

Allocation of Basis

Installment Reporting of Boot

Exchanges Between Related Parties

Reporting an Exchange

Types of Exchanges

Two-Party Exchanges

Three-Party Alderson Exchange

Three-Party Baird Publishing Exchange

Delayed Exchanges

45-Day Rule

Method of Identification

180-Day Rule

Final Regulations for Delayed (Deferred) Exchanges

Deferred (Delayed) Exchange Definition

Identification Requirements

Identification & Exchange Periods

Method of Identification

Property Description


Substantial Receipt

Multiple Replacement Properties

Actual & Constructive Receipt Rule

Four Safe Harbors

Safe Harbor #1 - Security

Safe Harbor #2 - Escrow Accounts & Trusts

Safe Harbor #3 - Qualified Intermediary

Safe Harbor #4 - Interest

Exchanges of Partnership Interests

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

Pension Protection Act of 2006

Corporate Plans





Employee Costs

Comparison with IRAs & Keoghs

Basic ERISA Provisions

ERISA Reporting Requirements

Fiduciary Responsibilities

Bonding Requirement

Prohibited Transactions

Additional Restrictions

Fiduciary Exceptions


Employer Securities

Excise Penalty Tax

PBGC Insurance

Sixty-Month Requirement

Recovery Against Employer

Termination Proceedings

Plans Exempt from PBGC Coverage

Basic Requirements for a Qualified Pension Plan

Written Plan





Exclusive Benefit of Employees

Highly Compensated Employees

Reversion of Trust Assets to Employer

Participation & Coverage

Age & Service


Percentage Test

Ratio Test

Average Benefits Test

Numerical Coverage

Related Employers


Full & Immediate Vesting

Minimum Vesting

Diversification Rights

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


Defined Benefit Pension

Defined Contribution



Favorable Circumstances

Types of Defined Contribution Plans


Requirements for a Qualified Profit-sharing Plan

Written Plan


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


Life Insurance in the Qualified Plan


Universal Life


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


Parity with Corporate Plans

Figuring Retirement Plan Deductions For Self-Employed

Self-Employed Rate

Determining the Deduction

Individual Plans - IRAs

Deemed IRA



Special Spousal Participation Rule - 219(g)(1)

Spousal IRA


Contributions & Deductions

Employer Contributions

Retirement Vehicles

Distribution & Settlement Options

Life Annuity Exemption

Minimum Distributions

Required Minimum Distribution


Distributions during Owners Lifetime & Year of Death after RBD

Sole Beneficiary Spouse Who Is More Than 10 Years Younger

Distributions after Owners Death

Inherited IRAs - Pre-SECURE Act

Estate Tax Deduction

Charitable Distributions from IRAs - 408

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


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

Nonspouse Rollovers

Roth IRA - 408A


Contribution Limitation

Roth IRAs Only

Roth IRAs & Traditional IRAs


AGI Limit Exception Repealed



Taxation of Distributions

No Required Minimum Distributions

Simplified Employee Pension Plans (SEPs)

Contribution Limits & Taxation



Employee Limit

Other Qualified Plan

Set up

Contribution Limits

Salary Reduction Contributions

Employer Matching Contributions

Deduction of Contributions


SIMPLE 401(k) Plan

Chapter 3 - Losses, AMT & Compliance

Passive Losses

Prior Law

Passive Loss Rules


Active Losses


Calculating Passive Loss

Categories of Income & Loss



Material Participation

Self-Charged Interest Regulations

Passive Deduction - Portfolio Income


Suspension of Disallowed Losses

Fully Taxable Disposition

Abandonment & Worthlessness

Related Party Transactions



Increase Basis Election

Entire Interest


Grantor Trust

Other Transfers

Transfer By Reason Of Death - 469(g)(2)

Transfer by Gift - 469(j)(6)

Installment Sale - 469(g)(3)

Activity No Longer Treated As Passive Activity - 469(f)(1)

Closely Held To Nonclosely Held Corporation- 469(f)(2)

Nontaxable Transfer

Ordering of Losses

Capital Loss Limitation


Allocation of Suspended Losses

Taxpayers Affected

Noncorporate Taxpayers

Regular Closely Held Corporations

Personal Service Corporations


Real Estate Professionals


Facts & Circumstances Test

Relevant Factors

Rental Activities

Limited Partnership Activities

Partnership & S Corporation Activities



Partial Dispositions

Alternative Minimum Tax - 55


Tentative Minimum Tax

AMT Exemption Amount - 55(d)

AMT Exemption Phaseout

Regular Tax Deduction - 55(c)

Tax Preferences & Adjustments

Preferences & Adjustments for All Taxpayers

Preferences & Adjustments for Noncorporate Taxpayers Only

Preferences & Adjustments for Corporations Only Prior to 2018

Adjustments - 56

Itemized Deductions

Medical Expenses




Alternative Depreciation System (ADS)

ADS Recovery Periods

Asset Placed in Service After 1998

Mining Exploration and Development Costs



Long-Term Contracts

Home Construction Contracts

Pollution Control Facilities

Installment Sales

Circulation Expenditures

Incentive Stock Options

Credit for Prior Year Minimum Tax & ISOs

Research & Experimental Expenditures

Passive Farm Losses


Loss Disallowance


Same Activity Suspension

Passive Activity Losses

Corporate Business Untaxed Reported Profits (Pre-1990)

Corporate ACE Adjustment (1990 to 2018)

Adjusted Current Earnings Regulations

Tax Preferences - 57


Intangible Drilling Costs

Excess Drilling Costs

Accelerated Depreciation

Real Property

Personal Property

Private Activity Bond Interest

Alternative Tax NOL Deduction

Carrybacks & Carryovers

Alternative Minimum Foreign Tax Credit

Foreign Tax Credit Carryback or Carryover

Tentative Minimum Tax

Minimum Tax Credit

Regular Income Tax Reduced

Carryforward of Credit

Other Credits


Reporting Requirements

Real Estate Transactions [Form - 1099S]

Independent Contractors

Cash Reporting [Form 8300]


Recipients Knowledge

Cash Reporting Rules - Attorneys

Sale of Certain Partnership Interests (Form 8308)

Tax Shelter Registration Number [Form 8271]

Asset Acquisition Statement [Form 8594]

Accuracy-Related Penalties


Substantial Understatement of Income Tax

Penalty on Carryover Year Return

Substantial Valuation Overstatements

Substantial Estate & Gift Tax Valuation Understatements

Final Regulations

Negligence or Disregard of Rules

Substantial Understatement Penalty

Adequate Disclosure

Information Reporting & Penalties - 6721 et al

Corrections Resulting in Reduced Penalties

Small Businesses

Reasonable Cause

Penalty for Unrealistic Position

Realistic Possibility Standard

Adequate Disclosure

Form 8275-R

Statute of Limitations for Assessments

Three Year Assessment Periods

Six-Year Assessment Period

No Statute Of Limitations

Extension of Statute Of Limitations

Examination of Returns

How Returns Are Selected

Arranging the Examination




Repeat Examinations

Changes to Return

Appealing Examination Findings

Appeals Office

Appeals to the Courts

Court Decisions

Recovering Litigation Expenses

Other Remedies

Claims for Refund

Cancellation of Penalties

Reduction of Interest

Chapter 4 - Business Forms & Characteristics

Sole Proprietorships



Self-Employment Taxes


S Solution

Estimated Tax Payments

20% Deduction


Conduit Entity



Husband-Wife Partnerships

General Tax Aspects

Limited Partnerships

Passive Presumption

At-Risk Rules - 465


Passive Loss Limitations - 469

Active/Passive Determination

Triggering Suspended Losses

Limited Liability Companies

Estates & Trusts

Income Distribution

Business Trusts

Unincorporated Associations

Corporate Treatment

Corporation Defined

Effect of State Laws

Corporate Characteristics

Partnership Determinations

Trust Determinations

Professional Associations

Check-The-Box Regulations

Subchapter S Corporations

Ordinary C Corporations



Personal Service Corporations - 441, 448, 469

Testing Period

Personal Services

Principal Activity & Substantial Performance


Independent Contractor

Passive Loss Limitations - 469(a)(2)

Qualified Personal Service Corporation - 448

Federal Corporate Income Taxation Overview

Taxable Income

Allowable Deductions

Tax Credits

Corporate Tax Rates

Tax Tables

Current Rate - 21%

Capital Gains

Tax Return & Filing

Affiliated Group

Corporate Estimated Tax

Alternative Minimum Tax Repealed

Chapter 5 - Corporate Formation & Capitalization

Incorporation - 351

Basic Requirements

Corporate Nonrecognition


Stock Solely For Services

Impact on Recipient

Impact on Other Shareholders

Stock for Debt




Property Basis

Stock Basis


Miscellaneous Trade & Technical Corrections Act - 351

Recourse Liability

Nonrecourse Liability


Incorporation of a Partnership

Alternative #1

Alternative #2

Alternative #3

Tax Consequences - Alternative #1

Tax Consequences - Alternative #2

Tax Consequences - Alternative #3

Accounts Receivable

Continuing Partnership

Section 1244 Stock

Maximum Ordinary Loss

Original Issuance

Distributed Stock

General Requirements

Start-Up Expenses

Covered Expenses


Organizational Expenses


Stock Issuance & Syndication Expenses


Start of Business

Tax Recognition of the Corporate Entity

Tax Criteria

Nominee & Agency Corporations

Having Income Attributed to the Corporation

Section 482 Reallocation

Corporation & Shareholder


Interest-Free Loans

Section 269A

Capital Gains & Losses

Net Capital Loss Carryovers & Carrybacks - 1212

S Corporation Status

Asset Types

Five-Step Characterization Process

Netting Capital Gains

Netting Section 1231 Gains (Losses)

Character of Section 1231 Gains (Losses)

5 Year Averaging

NOL Carryback & Carryover - 172

Loss Computation

Deduction Computation

Dividends Received Deduction - 243

Dividends from Domestic Corporations

65% Exception



Denial of Deduction

Debt-Financed Portfolio Stock

Property Dividends

Change to Holding Period

Charitable Contributions

Timing of Deduction


Carryover of Excess Contribution

Charitable Contributions of Computer Equipment - Expired

Collapsible Corporations - 341 (Repealed)



Covered Transactions

Personal Holding Companies - 541

Penalty Tax

Professional Corporations

Named Professionals

Avoidance of PHC Status

Accumulated Earnings Tax Trap - 531

Imposition of Penalty Tax


Accumulated Earnings Credit

Application of Credit to Controlled Groups

Reasonable Accumulations

Working Capital

Service Corporations

Minority Stock Redemptions

Majority Stock Redemptions

Stockholder Harmony

Tax Exempt Income

Accounting Periods & Methods

Accounting Periods

Section 444 Election

Business Purpose Tax Year

25% Test

Length of Accounting Period

Short Tax Year

Not in Existence Entire Year

Change in Accounting Period

Election of Accounting Period

Changing Accounting Periods

Changes Without IRS Consent

Accounting Methods

Methods Available

Cash Method


Accrual Method

Economic Performance Rule

Special Methods

Combination (Hybrid) Method

Accounting for Long-term Contracts

Changing the Accounting Method


Identification Methods

Specific Identification Method

FIFO Method

LIFO Method

Valuation Methods

Cost Method

Uniform Capitalization Rules - 263A

Lower of Cost or Market Method

Multiple Corporations

Controlled Group Restrictions


Parent-Subsidiary Groups

Brother-Sister Groups

Consolidated Returns


Corporate Liquidations & Distributions

The Old General Utilities Doctrine

Loss Limitations

Chapter 6 - Corporate Principals & Employees

Employee Status of Active Shareholders

Payroll Tax Withholding & Reporting

Form 941

Deposit Rules

Lookback Period

Monthly Depositor

Semi-Weekly Depositor

One-Day Rule

Form W-4


Form W-2

Form W-3

Social Securitys Payroll Tax or FICA - 3111 & 3121



Federal Unemployment (FUTA) Tax - 3301 & 3306

Form 940

Employee Labor Laws

Minimum Wage Requirement


Fair Employment Laws

Child Labor Laws

Immigration Law

Workers Compensation Insurance

State Disability Insurance (SDI)


Employee vs. Contractor Status


Unreasonable Compensation

Overall Limitation

Allowance of Deduction

Publicly Traded Corporation Limitation

Limitation on Accrual Deduction

Employment Contracts

Scope of Examination

Officers Compensation


Employees Qualifications

Size of the Business

Employees Compensation History

Unreasonably Low Salaries

Services Performed by the Employee

Past Service

Reasonable Dividends

Bonuses as Constituting Dividends

Payback Agreements

Miscellaneous Factors

Income Splitting

Gift & Redemption

Hire the Kids & Spouse

Buy Sell Agreements


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

Arms-Length Bargain

Enforcement of Contract Price

Joint Ownership

Funding the Buy-Sell Agreement

Term vs. Whole Life

Policy Ownership

Premium Payment

Purchase Price

S Corporations

Sole Shareholder Planning

Complete Liquidations

Alternative Dispositions

Use of Life Insurance

Estate Valuation

One-Way Buy-Outs


In General

Valuation of Stock

Estate Freeze Provisions

Stock Dividends

Section 306 Tainted Stocks

306 Exceptions

Chapter 7 - Basic Fringe Benefits


Definition of Income - 61

Deductions without Taxable Income

Benefit Mechanics

Old Dichotomy - Statutory v. Nonstatutory

Fringe Benefit Provisions

TRA 84 - 132


Only Statutory Benefits Remain

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 - 217

Employer-Provided Retirement Advice & Planning - 132

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)

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 8 - Business Entertainment

Pre-2018 Entertainment

Former Directly Related Test

Clear Business Setting Presumption

Former Associated Test

Substantial Business Discussion



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


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

Entertainment Facilities


Covered Expenses

Club Dues


Sales Incentive Awards

Substantiation & Record Keeping - 274(d)


Payback Agreements

Employee Expense Reimbursement & Reporting

Family Support Act of 1988

Remaining Above-The-Line Deductions

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

Meal Break Out & 50% Limitation

Partial Days of Travel

Usage & Consistency

Unproven or Unspent Per Diem Allowances

Travel Advance

Reporting Per Diem Allowances

Reimbursement Not More Than Federal Rate

Reimbursement More Than Federal Rate

Nonaccountable Plans

Non-Reimbursed Employee Expenses

So Who Files Form 2106?

Self-Employed Persons

Expenses Related to Taxpayer's Business

Expenses Incurred on Behalf of a Client & Reimbursed

Meal (and Entertainment before 2018) Expenses

With Adequate Accounting

Without Adequate Accounting

Non-Entertainment Expense Deduction


When Can an Expense Be Deducted?

Economic Performance Rule


Nondeductible Meals

Employer-Provided Auto

Chapter 9 - Insurance

Company Paid Insurance


Types of Life Insurance

Group Term Life


Key Employee Defined

Popularity and Application

Coverage & Premiums

Medical Examination


Spouse & Dependent Insurance


Tax Liability



Eligibility & Benefits

Excluded Employees

Policy Requirements

Ten Employee Rule

Less Than Ten Employees

Permanent Benefits

Nondiscrimination Requirements

Retired Lives Reserve

Revenue Ruling 68-577



Comparison With Other Programs

Executive Bonus



Reserve Account

Revenue Rulings

Qualified Trusts

Nonqualified Trusts

Deductibility of Contributions

Separate Account for Key Employees

Disqualified Benefit

Effective Date

Revenue Procedure 93-3

Estate Planning Considerations

Policy Assignments

Split-Dollar Life

Low-Cost Term Insurance

Regulatory Requirements


Revenue Ruling 64-328

Johnson Case

Business Travel Accident Insurance

Medical & Dental Insurance


Disability Income Insurance

Interest Limitation on Policy Loans - 264A

Disallowance of Interest Deduction


Limit on Deductibility of Premiums & Interest

Key Person Life Insurance

Closely Held Corporations

Sole Shareholder Applications


Affected Employers

VEBAs - 501(c)(9) Trusts

Section 419

Self Insurance

Severance Pay

Post-Retirement Medical Benefits

VEBA Taxation on Earnings

Nondiscrimination Rules Applied

Uniform Application

Controlled Groups


Disqualified Benefits


Chapter 10 - Nonqualified Deferred Compensation

Postponement of Income


IRS Scrutiny & Approval




No Immediate Cash Outlay

Annual Report

Notice Requirement

Purposes & Benefits

Benefit Formula


Deferred Bonuses

Contractual Arrangement

Necessary Provisions

Tax Status

Services Position


Congressional Moratorium

No Ruling or Regulation Policy

Constructive Receipt

Beyond Actual Receipt

Simple Set-Asides Are Not Possible

Revenue Ruling 60-31


Time & Control Concept



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


Funded Company Account Plan - Type II

Ownership & Segregation

Bookkeeping Reserve or Separate Account

Employee Still Bears Economic Risk

Limited Protection

Investment of Deferred Amounts

Life Insurance


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



Time Alone is Not Enough

Realization & Taxation

30-Day Election Period

Deduction Allowed



Tax Consequences

Reciprocal Taxation/Deduction Rule

No Difference for 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


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 & IRAs

Other Payroll Taxes

Social Security Benefits


Chapter 11 - S Corporations





Passthrough Entities - 20% Deduction

Becoming an S Corporation

S Corporation Status

Number of Shareholders

Individuals Only


Grantor Trusts

Voting Trusts

Testamentary Trust

Qualifying Simple Trusts

Electing Small Business Trusts


C Corporations

Tax-Exempt Entities

Exception for S Corporation ESOP - 512

One Class of Stock

Affiliated Groups & Subsidiaries

Prior Law

Current Law

Domestic Corporation

Election Requirement

Making the Election

Form 2553

Invalid S Elections


S Corporation Termination

Revoking the Election


Effective Date

Ceasing to Qualify

Effective Date

Passive Income - 1362

Effective Date

S Termination Year

Pro-Rata Allocation

Allocation Based On Normal Accounting Rules

Annualization of 1120 Short Year

Taxation of S Corporations

S Corporation Income & Expense

Separately Stated Items

Nonseparately Stated Items

Interest Expense on Debt-Financed Distributions

Tax Exempt Income

Net Operation Losses

Carryover of C Corporation NOLs

Reduction of Pass-Thru Items

Built-In Gain - 1374

Net Recognized Built-In Gain

Recognized Built-In Gains

Recognized Built-In Loss

Deduction Items

Amount of Tax


Net Operating Loss Carryovers

Treatment of Certain Property

Transfer of Assets

Passive Income - 1375

Gross Receipts

Sales or Exchanges of Stock or Securities

Passive Investment Income




Figuring the Tax on Excess Net Passive Income

Net Passive Income

Excess Net Passive Income

Special Provisions

Waiver of Tax

Tax Preference Items

LIFO Recapture Tax

Capital Gains Tax

Reducing Corporate Capital Gains

Figuring Corporate Taxable Income

Recapture of Investment Credit

Estimated Corporate Tax Payments

Basis of Stock & Debts

Adjustments to Basis

Limitation on Loss Deductions

Basis Limit

Adjustments to Stock Basis



Adjustments to Debt Basis

Restoring Basis of Loans

Loan Repayments


At-Risk Rules - 465

Reasonable Compensation

Related Party Rules

Definition of Related Party

Stock Attribution Rules

Business Expenses & Interest


Earnings & Profits

Accumulated Adjustments Account (AAA)

Dividend Election

Post-Termination Distributions

Transition Period

Order of Distribution

No Earnings & Profits

Appreciated Property Distributions

Taxable Year

Business Purpose

Change of Tax Year

Form 1120S


Late Filing

Reasonable Cause

Schedule K-1

Shareholders Treatment Of S Corporation Items

Pro Rata Share

Optional 10-year Write-Off of Tax Preferences

Fringe Benefits

Health Insurance Premiums

Reporting Requirements

Medical Deduction

Entity Tax Comparison

Chapter 12 - Business Dispositions & Reorganizations

Starting a New Business

Organization Costs

Start-up Costs

Syndication Costs

Buying an Existing Business

Finding a Business for Sale

Tax Considerations

Stock Acquisitions

Section 338 Election

Asset Acquisitions

Allocation of Purchase Price to Assets

Allocation Regulations

Practical Considerations

Reorganizations - 368

Types of Reorganizations

Type 1 Reorganizations

Benefits and Considerations



Type 2 Reorganizations

80% Control Requirement

Voting Stock as Sole Consideration

Shareholder Action

Type 3 Reorganizations


Transfer of Assets

90/70 Test

Liquidation of Acquired Corporation

Type 4 Reorganizations

Asset Distributions

Continuity of Business


Type 5 Reorganizations

Type 6 Reorganizations

Type 7 Reorganizations

Bona Fide Business Purpose


Carryover of Corporate Tax Attributes

Mandatory Carry-Over

Effect of Carry-Over on Acquisition

Application of Rules to Subsidiary Liquidations

Loss or Tax Credit Carryovers



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