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Author: |
Danny C Santucci, JD |
Course Length: |
Pages: 26 ||| Word Count: 17,955 ||| Review Questions: 10 ||| Final Exam Questions: 10 |
CPE Credits: |
2.0 |
IRS Credits: |
2 |
Price: |
$17.95 |
Passing Score: |
70% |
Course Type: |
Text - IRS Enrolled Agents |
Technical Designation: |
Technical |
Field Of Study: |
Taxes |
Approved Audience: |
NASBA QAS - NASBA Registry |
Key Takeaways: |
This mini course teaches the federal tax consequences of personal bankruptcy, divorce, foreclosure, debt cancellation, repossessions, and bad debts.
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Frequently Asked Questions: |
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Description: |
This mini-course will teach participants how to apply, implement, and evaluate the strategic tax aspects of marital and financial setbacks. Property transfers, asset divisions, alimony, filing status, exemptions, and child support are examined. The cancellation of indebtedness income inclusion rules are discussed 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 and bad debt treatment under §166 is reviewed. |
Usage Rank: |
15909 |
Release: |
2008 |
Version: |
1.0 |
Prerequisites: |
General understanding of federal income taxation. |
Experience Level: |
Overview |
Additional Contents: |
Complete, no additional material needed. |
Additional Links: |
Internal: Handling Bankruptcy Divorce - Tax Tribulations (Mini‑Course)
Internal: Tax Bankruptcy & Financial Problems Course
External: IRS - Income from Discharge of Indebtedness (26 U.S. Code § 108)
External: What Is Bankruptcy?
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Advance Preparation: |
None. |
Delivery Method: |
QAS Self Study |
Intended Participants: |
Anyone needing Continuing Professional Education (CPE). |
Revision Date: |
05-Sep-2026 |
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. |
Keywords: |
Making the Best of Bad Situations - Personal Bankruptcy, Divorce, Foreclosure, Bad Debts, Repossessions and Other Tax Tribulations - Mini Course - CPE course for CPAs |
Learning Objectives: |
Learning Assignment & Objectives As a result of studying the assigned materials, you should be able to meet the objectives listed below. ASSIGNMENT At the start of the materials, participants should identify the following topics for study: * Marital tax liability * Transfers incident to divorce * Alimony & child support * Debt cancellation & income inclusion rule * Reduction of tax benefits * Foreclosure * Repossession of personal property * Repossession of real property * Non-business bad debts * Business bad debts Learning Objectives After reading the materials, participants will be able to: 1. Recognize tax considerations and tax guidance for marital tax liability and refund offsets. 2. Identify the elements of §1041 nonrecognition and specify variables that determine whether a payment is alimony. 3. Determine the exceptions to the general income inclusion rule and recognize the tax issues in calculating gain or loss resulting from foreclosure or repossession, including the differences between personal and real property repossession. 4. Identify nonbusiness and business bad debts under §166, determining their differences in Code requirements and amount allowed. |
Course Contents: |
Chapter 1 - Making the Best of Bad Situations Marital Tax Liability Filing Status Marital Status Abandoned Spouse Rule - §7703 Joint Return Innocent Spouse Exception - §6015 Refund Offset Program - §6402 Injured Spouse - Form 8379 Separate Returns Disadvantages of a Separate Return Advantages of a Separate Return Head of Household Children of Divorced Parents Unified Definition of a Child - §152 Children of Divorced or Separated Parents Divorce Costs Tax Advice - §212(3) Fees to Obtain Alimony or Protect Income - §212(1) & (2) Fees to Obtain Property - §1012 & 1016 Transfers Incident to Divorce Property Rights Marital Property Common Law Property Community Property Equitable Distribution Premarital Agreements Limitations Enforceability Requirements Property Settlements Section 1041 Incident to Divorce Related To Termination Divorce or Separation Instrument Property Basis Bankruptcy Alimony & Child Support Alimony & Spousal Support Alimony Restrictions & Requirements Pre 2019 Decrees 2019 & Later Decrees Pre-2019 Recapture Child Support Contingency Relating To a Child Clearly Associated With a Contingency Debt Cancellation & Foreclosure Income Inclusion Rule Exceptions from Income Inclusion Order of Exclusions Bankruptcy Case Exclusion - §108(a)(1)(A) Insolvency Exception - §108(a)(1)(B) Qualified Farm Debt Exclusion - §108(a)(1)(C) Qualified Farm Debt - §108(g)(2) Qualified Person - §108(g)(1) Real Property Business Debt - §108(a)(1)(D) Qualified Debt Exclusion Limit Ordinary Income Recapture Partnerships Deemed Distribution Rules S Corporations Student Loan Exception - §108(f) Purchase Money Debt Reduction Exception - §108(e)(5) Cancellation of Deductible Debt Exception - §108(e)(2) Reduction of Tax Benefits (Attributes) - §108(b) General Ordering of Tax Attribute Reduction Basis Reduction Depreciable Property Election Procedure Required Reduction Timing of Basis Reduction Limit on Basis Reduction Recapture of Basis Reductions Exempt Property Special Basis Reduction Rule for Qualified Farm Debt Qualified Property Basis Reduction Order Exclusion Limit Individual Bankruptcy Partnership Bankruptcy Depreciable Property Allocation of Debt-Discharge Income Corporate Stock-For-Debt Rule Token Share Inclusion Workout Inclusion Recapture of Gain on Later Sale Debt Contributed to Capital Debt-For-Debt Exchange Earnings & Profits S Corporation Bankruptcy Net Operating Losses Adjustments to Shareholder’s Basis in Debt Bankruptcy Estate as Shareholder Reporting Amount Realized On Sale or Other Distribution of Property Foreclosure Nonrecourse Indebtedness Recourse Indebtedness Mortgage Relief Act of 2007 - Expired Principal Residence Qualified Principal Residence Indebtedness Acquisition Indebtedness Reporting Form 1099A Timing & Character of Gain or Loss Gain Loss Lender’s Tax Impact Foreclosure Sale Discounted Acquisition of Debt Transactions Involving Related Parties Related Persons Repossession 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 Conditions 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 Bad Debts Non-Business Bad Debts Totally Worthless Determining Worthlessness Required Basis or Income Inclusion True Debt Loan or Gift Loan Guarantees Political Debts Mechanics’ Liens Insolvency of Contractor Secondary Liability on Home Mortgage Reporting Recovery Business Bad Debts Credit Transactions Income Inclusion Accrual Method Taxpayers Cash Method Taxpayers Former Business Debt Acquired from a Decedent Political Debts Insolvency of Partner Business Loan Guarantees Reporting Methods of Treating Bad Debts Specific Charge-Off Method Partly Worthless Debts Deduction Disallowed Totally Worthless Debts Recovery of Bad Debt Property Received for a Debt Bankruptcy Claim Sale of Mortgaged Property Net Operating Loss Nonaccrual-Experience Accounting Method Performing Services Interest & Late Charges Glossary |
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