|Author :||Danny C Santucci, JD|
|CPE Credits :||16.0|
|IRS Credits :||16|
|Passing Score :||70%|
|Primary Subject-Field Of Study:||
Taxes - Taxation for Course Id 102
This course will teach participants how to apply, implement, and evaluate the strategic tax aspects of marital dissolutions and living together arrangements. Current perspectives on property transfers, asset divisions, alimony, filing status, exemptions, and child support are examined with an emphasis on planning considerations. The cancellation of indebtedness income inclusion rules are examined in the context of debt forgiveness and property foreclosure. Emphasis is given to the exceptions from income inclusion contained in §108. The tax treatment of property repossession under §1038 is explored with detail given to the calculation of gain and received property basis. Finally, bad debt treatment under §166 is reviewed and critical distinctions made between business and nonbusiness debts.
|Usage Rank :||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 :||Self-Study.|
|Intended Participants :||Anyone needing Continuing Professional Education (CPE).|
|Revision Date :||27-Jun-2016|
|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 - NASBA Registry - IRS Enrolled Agents - 102
|Keywords :||Taxes, Making, Best, Bad, Situations, 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 SUBJECT
Chapter 1 Basic Marital Tax Matters
At the start of Chapter 1, participants should identify the following topics for study:
* Joint return
* Separate returns
* Head of household
* Divorce costs
* Withholding & estimated tax
* Community property states
* Ending the community
* Living together
After reading Chapter 1, participants will be able to:
2. Identify the requirements of filing a joint return noting how to avoid being penalized.
3. Determine the key elements of filing separate returns including what items to report and identify whether or not married taxpayers should file separate returns.
4. Recall the requirements for filing as head of household and the tax advantages and disadvantages of this filing status.
5. Recognize the phaseout of exemptions noting its affects on taxpayers, identify when exemptions can be taken for spouses, and determine reporting requirements for dependent exemptions, and specify the requirements for pre-2005 dependency particularly relationship, married person, citizen or resident and income.
6. Identify the former regular and special method for determining support noting complications from back child support, determine the current “qualified child” standard using residency, relationship, age, and joint return prohibition, and recall the requirements that must be met for parents to treat a child as a qualifying child of a non-custodial parent.
7. Identify deductible and nondeductible divorce expenditures noting which spouse is subject to tax imposed upon withheld wages, and recognize the effects of making separate estimated tax payments or joint declarations of estimated tax.
8. Determine community property and community property states, and identify the effects of conversion and commingling of property and how to avoid such marital property issues.
9. Identify community income earned by married couples for reporting purposes by:
b. Recalling the requirements for the special community income allocation rules of §66(a), determining what constitutes community property termination and specifying the treatment of alimony payments; and
c. Recognizing the use of statements and records to provide estimates of a former spouse’s income and identifying conditions for greater tax relief.
Chapter 2 Transfers Incident to Divorce
At the start of Chapter 2, participants should identify the following topics for study:
* Premarital agreements
* Application of §1031
* Incident to divorce
* Property basis
* Purchases of residence between spouses
* Purchases of business interests between spouses
* Selected asset divisions of residence & business interests
* Real & personal property
* Pension benefits
After reading Chapter 2, participants will be able to:
2. Determine the benefits of premarital agreements and the requirements and permissible provisions for a valid and comprehensive agreement under the Uniform Premarital Act.
3. Specify the position of U.S. v. Davis on interspousal transfers noting the changes made by §1041, and identify the requirements of §1041 and the scope of its application.
4. Select the factors that determine whether a property transfer is incident to divorce and identify how to meet these factors or avoid §1041 altogether when desired.
5. Determine the application of §1041 to transfers in trust under §1041(e) and to third party transfers on behalf of a spouse or former spouse.
6. Recognize deferred tax liability by identifying property basis for the transferor spouse and transferee spouse under §1041 after a property settlement.
7. Specify the application of §1041 to property transfers where the transferee assumes liabilities encumbering the property, and choose the holding period for an asset transferred between spouses or former spouses incident to divorce.
8. Recall the dangers of purchasing a former spouse's interest in property particularly a marital residence and its tendency to create deferred tax liability.
9. Determine the tax effects of purchasing an interest in personal or real property used in a business or held for investment, recognize potential recapture and identify the use of an exchange to dispose of low-basis property received in a §1041 transfer.
10. Specify the common disposition alternatives available on divorce, recall the home sale exclusion requirements, and identify the tax treatment and use of installment obligations under §453 in divorce.
11. Recognize sale, redemption, recapitalization, liquidation and third-party transfers as methods of dividing a business in a marital settlement citing unique provisions under §302, §736 and §754.
12. Identify whether gain or loss on a sale of real or personal property is capital or ordinary, recognize the tax treatment of such gain or loss and recall the role and tax treatment of life insurance in property settlements.
13. Specify popular methods of dividing retirement benefits in a divorce or separation action identifying the requirements and tax consequences of a “qualified domestic relations order (QDRO).
14. Choose an overall tax and economic strategy for the division of pension benefits in a marital settlement by:
b. Determining the treatment of IRAs at divorce considering the IRA deduction limit and rollovers;
c. Identifying strategies for retirement planning after divorce;
d. Recognizing the Social Security benefits, military pensions, civil service pensions, or railroad pensions that may be available to a former spouse; and
e. Selecting which debts incurred during a divorce are dischargeable in bankruptcy.
Chapter 3 Alimony & Child Support
At the start of Chapter 3, participants should identify the following topics for study:
* Alimony requirements of instruments executed after 1984
* Alimony requirements of instruments executed before 1984
* Deducting alimony paid & reporting alimony received
* Recapture of alimony for type A & B agreements
* Alimony substitution trusts & annuities
* Alimony paid by estate
* Child support
* COBRA coverage
* Qualified medical child support orders
After reading Chapter 3, participants will be able to:
2. Identify variables that impact whether a payment is alimony since 1984 and determine whether a cash payment is deemed made to or on behalf of a former spouse in order to characterize it as alimony.
3. Recall the tax treatment of housing costs for the family residence noting the impact of ownership by contrasting when the nonoccupying spouse owns the home with when the occupying spouse owns the home.
4. Identify the tax treatment of life insurance premium payments, voluntary payments and payments to a remarried spouse, and specify the conditions that could recharacterize otherwise deductible alimony payments as nondeductible.
5. Determine the differences between child support and alimony noting their tax treatment to avoid reporting errors.
6. Identify the alimony and child support tax provisions that currently apply from those that applied to instruments executed prior to 1985 by:
b. Recognizing the marital or familial relationship and recalling the similarities and differences in the treatment of child support under current law and previous law.
8. Specify the alimony recapture rule for various marital agreements and its impact on the tax treatment of past payments.
9. 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.
10. Recall the tax treatment of child support, identify two circumstances where a payment will be fixed as child support, specify events that determine whether a contingency is clearly child-related noting how to rebut this presumption of child support, and recall the COBRA and qualified medical child support order rules by:
b. Determining what constitutes “qualified medical child support orders” noting differences with other similar orders and identifying the procedures, requirements and jurisdiction of QMCSOs.
Chapter 4 Avoiding Tax on Debt Cancellation & Foreclosure
At the start of Chapter 41, participants should identify the following topics for study:
* Real property business debt
* General ordering of tax attribute reduction
* Reduction of tax benefits
* Basis reduction
* Partnership bankruptcy
* Corporation stock-for-debt rule
* S corporation bankruptcy
* Discounted acquisition of debt
After reading Chapter 4, participants will be able to:
2. Identify tax attribute reductions noting their application when reducing canceled debt, cite the special basis reduction rules, recognize the depreciable property election in reducing the basis of depreciable property before reducing any other tax attributes, determine what constitutes individual, partnership and S corporation bankruptcy, and specify the variables used in determining whether shares of stock issued to a creditor are nominal or token.
3. Determine gain or loss resulting from foreclosure or repossession noting reporting and filing requirements, specify the timing and character of the gain or loss, and cite the hidden income tax danger of directly or indirectly acquiring one's own debt at a discount.
Chapter 5 Repossession
At the start of Chapter 5, participants should identify the following topics for study:
* Non-installment method sales
* Installment method sales
* Basis of repossessed personal property
* Bad debt
* Repossession of real property
* Figuring gain on repossession
* Seller’s former home exception
After reading Chapter 5, participants will be able to:
2. Determine the distinctions between the rules, calculations and effects of repossessions of personal and real property, and identify when a §166 bad debt deduction may be taken if the seller repossesses real property.
Chapter 6 Bad Debts
At the start of Chapter 6, participants should identify the following topics for study:
* True debt
* Mechanics’ liens
* Reporting & recovery
* Credit transactions
* Former business bad debts
* Insolvency of partner
* Business loan guarantees
* Specific charge-off method
* Nonaccrual-experience accounting method
After reading Chapter 6, participants will be able to:
b. Recalling the treatment of bad debts related to political debts, mechanics’ liens and secondary liabilities on home mortgages; and
c. Specifying the forms used to report bad debts and specifying the tax treatment of recovered amounts.
b. Recalling the tests that must be met by an accrual method business taxpayer to be able to take a bad debt deduction for a political debt and identifying the tax consequences of the insolvency of a partner when a business partnership terminates and debts are owed; and
c. Specifying methods that can be used by businesses to treat uncollectible amounts noting the rules that apply to each.
Appendix A Legal Aspects of California Foreclosure
At the start of Appendix A, participants should identify the following topics for study:
* Nonjudicial foreclosure
* Judicial foreclosure process
* Liability on mortgages and deeds of trust
|Course Contents :||
Chapter 1 -
Chapter 2 -
Chapter 3 -
Chapter 4 -
Chapter 5 -
Chapter 6 -