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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 128 ||| Review Questions: 80 ||| Final Exam Questions: 80 |
| CPE Credits : | 16.0 |
| IRS Credits : | 16 |
| Price : | $125.95 |
| Passing Score : | 70% |
| Course Type: | NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents |
| Technical Designation: | Technical |
| Primary Subject-Field Of Study: | Taxes - Taxes for Course Id 233 |
| Description : | Taxes aren't taxes – they are dollars in terms of the net return on investment. All tax professionals need to know the tax economics of investing for themselves and their clients. This need is accentuated by the rapid rise of the Internet as a broad-based and effective investment tool. The tax professional is in a special position to detect a client's need for financial planning. Preparing returns discloses assets, savings, business entities, and family members. Knowledge of the client's assets, activities, and the tax characteristics of available entities permits investment matching for maximum after-tax return. The basic tax characteristics of the primary tax entities are explored and analyzed. Their ability to defer, reduce, and eliminate tax is examined. Client goals, purposes, and risk tolerances are determined and quantitated using the Sharp ratio. Investments and assets are then evaluated using a variety of tools found on the Internet. Finally, investments and entities are matched to produce the best after-tax return for the client. |
| Usage Rank : | 13333 |
| Release : | 2023 |
| Version : | 1.0 |
| Prerequisites : | General understanding of federal income taxation. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
Minimize taxes and maximize your bottom line
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 06-Dec-2023 |
| NASBA Course Declaration : | Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam. |
| Approved Audience : | NASBA QAS - Text - NASBA Registry - IRS Enrolled Agents - 233 |
| Keywords : | Taxes, Matching, Investments, Tax, Savings, Techniques, 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 Introduction At the start of Chapter 1, participants should identify the following topics for study:
* Mapping for financial independence * Investment purposes * Cash management * Savings * Physical assets * Financial assets * Life insurance * Social Security * Investment selection & evaluation strategies After reading Chapter 1, participants will be able to:
2. Recognize investment planning goals and purposes, select retirement planning direction, and identify resource allocation including necessary generational changes. 3. Determine the development and implementation of a financial plan for retirement by:
b. Specifying physical and financial assets including stocks and bond types; c. Selecting mutual funds based upon an investor’s personal objectives and risk tolerance; and d. Recognizing major types of life insurance including their use as financial planning tools. Chapter 2 Entities & Title At the start of Chapter 2, participants should identify the following topics for study:
* Corporations * Trusts holding title & business trusts * Co-tenancy taxation, percentage interests, & partition * Partnership taxation & recapitalization * Family partnerships * Limited liability companies * Retirement plans * Custodianship * Estate After reading Chapter 2, participants will be able to:
b. Specifying the C corporations groups including the estate-planning problems associated with each; and c. Recognizing advantages that partnerships may have over corporations. 3. Specify the title holding benefits of trusts, co-tenancy, partnerships, and limited liability companies and the tax characteristics of each. 4. Identify the types of retirement plans used to provide lifetime benefits to a business owner and to employees, determine how title can be held on behalf of minors and the tax treatment of custodianships, and specify the tax treatment of a probate estate. Chapter 3 Deferral At the start of Chapter 3, participants should identify the following topics for study:
* Related party exchanges * Multiple property exchanges * Delayed (deferred) exchange regulations * Actual & constructive receipt rule * Qualified contribution plans * Tax-deferred annuities * Installment sales * At-risk rule * Deferred compensation and options After reading Chapter 3, participants will be able to:
2. Cite the related party §1031 restrictions and prohibited parties or entities and permissible disposition exceptions, identify protections for exchange participants, and recognize multiple property exchanges. 3. Recall the evolution of §1031 delayed exchanges and allowable transfers, determine how to select replacement property within statutory deadlines, specify constructive receipt safe harbors, recognize methods to secure exchange party performance, and identify the §1031 partnership underlying asset rule. Recognize how to design retirement plans following basic steps, identify the most popular methods for providing for retirement, and specify near retirement investments. 4. Determine the requirements for an installment sale and how to elect out of the installment method, specify variables affecting §453 availability, and recognize the use of a property option to receive income and postpone tax. Chapter 4 Reduction At the start of Chapter 4, participants should identify the following topics for study:
* Low Income Housing Credit & Child & Dependent Care Credit * Estimated taxes * Interest * Automobile deductions * Remaining business entertainment deductions * Depreciation & cost recovery * Net operating losses * Tax breaks for nonitemizers * Amended returns After reading Chapter 4, participants will be able to:
2. Recognize the estimated tax rules, procedures including payment deadlines, underpayment penalties, and the economics of overpaying estimated taxes, and specify the types of interest that are nondeductible including personal interest under §163(h)(1). 3. Determine the deductibility of investment interest, prepaid interest, points, prepayment penalties, and the offset of passive income with rental property mortgage interest. 4. Identify business vehicle operating costs using (or switching between) the actual cost method or the standard mileage rate and allocating expenses based on §162 usage, cite the importance of retaining substantiatable expense and mileage records, and specify depreciation traps when purchasing a vehicle. 5. Determine the requirements for business expenses and identify the business expense statutory exceptions and the application of R.R. 90-23 and R.R. 99-7 to the deduction of transportation costs to a temporary work location. 6. Recognize business asset depreciation using both ACRS and MACRS recovery classes, identify sources of §172 net operating losses (NOLs) and carryback and carryover rules, cite several tax breaks for nonitemizing taxpayers, determine the advisability of filing an amended return, specify how to avoid audits by claiming refunds for provable items, and identify which return amendments are safest. Chapter 5 Income Splitting At the start of Chapter 5, participants should identify the following topics for study:
* Deductible business expenses * Home-office deduction * C or regular corporations * S corporations * Family partnerships * Childcare & education * Gifts * Interest-free loans After reading Chapter 5, participants will be able to:
2. Determine the tax opportunities available to an unincorporated business by specifically recognizing retirement plans, the hiring of family members, travel expenses, casualty losses, bad debts, and self-employment tax. 3. Identify the uses and tax characteristics of regular and S corporations by:
b. Determining the taxation of these entities including their ability to split income; and c. Specifying initial §351 formation and capitalization issues and identifying appropriate tax form filings for each entity. 5. Identify the use of a custodianship to split income and initial planning considerations and examples of good investments for children, determine deductions and credits for childcare, education, children, and §7872 loans, and specify the income and later estate tax benefits of gifts. Chapter 6 Elimination At the start of Chapter 6, participants should identify the following topics for study:
* Municipal bonds * Divorce & separation settlements * Gifts & inheritances * Life insurance * Fringe benefits * Taxation & valuation of benefits * Employee expense reimbursement & reporting * Fixed & variable rate allowances * Social security After reading Chapter 6, participants will be able to:
b. Determining qualifications for tax-free state or local obligations specifically including private activity bonds; and c. Specifying the tax elimination aspects of family transactions such as gifts, bequests, inheritances, life insurance, and even divorce.
b. Identifying popular employee fringe benefits including employer-paid accident & health coverage, meals or lodging, cafeteria plan benefits, §127 education assistance, achievement awards, group life insurance, and dependent care assistance. |
| Course Contents : | Chapter 1 - Introduction The Internet Investment Clubs A Map for Financial Independence Mapping Steps Identifying Your Goals Investment Purposes Purpose #1 - Comfortable Retirement Myths of Retirement Plan For 10 to 15 Retirement Years Stay With One Company to Retire With the Best Benefits Preserve Capital Retirees Are Taxed Less Housing Costs Are Less Just the Spouse and Me Medicare Will Cover Medical Bills Retirees End Up In a Nursing Home Purpose #2 - Education Purpose #3 - Family & Personal Stability Purpose #4 - Enjoyment of Life Investment Goals Find Your Place in Time “Know Thy Investment Self” Investment Vehicles & Entities Developing a Financial Plan Implementing the Plan Cash Management Inflation Savings Compounding Strategies for Savings Asset Types Physical Assets Liquidity Real Estate Residential Housing Land Commercial Real Estate Financial Assets Stocks Stock Groupings Cyclical Stocks Defensive Stocks High Growth Stocks Interest-Sensitive Stocks Small Companies Preferred Stock Bonds Bond Ratings Standard & Poor Return & Maturity Inflation Callable Bonds Convertible Bonds Zero-Coupon Bonds U.S. Government Bonds Interest & Inflation Risk Municipal Bonds Mutual Funds Open-End Versus Closed-End Funds Load vs. No-Load Index Funds Life Insurance Purpose Types of Life Insurance Term Insurance Whole Life (Permanent) Insurance Straight Life vs. Limited Payment Modified vs. Preferred Endowment Insurance Universal Life Charges Premium Payment Variable Life Investment Accounts Taxation Survivor Life Single Premium Whole Life Tax Overview Income Tax Transfer for Value Rule Social Security Earnings Record Payments Exempt from Social Security Social Security Checkup Form SSA-7004 Form SSA-7050 Commitment Investment Selection & Evaluation Strategies Active Strategies Fundamental Analysis Technical Analysis Key Ratios Analysis Price/Earnings (P/E) Multiple Earnings Per Share ROA & ROE Debt to Equity Current Ratio Price-to-Book Value Day Trading Asset Value Investing Contrarian Investing Short-Term Market Timing Long-Term Trends Dollar Cost Averaging Passive Strategies Dow Investing Asset Allocation Rebalancing Chapter 2 - Entities & Title Basic Entity Formats Individual & Sole Proprietorship Marital Property Timing & Domicile Corporate Categories of C Corporations Personal Holding Company - §541 Attribution Rules Penalty Tax Regular C Corporation Corporate Tax Rate No Pass Through Getting Money Out of the C Corporation Passive Loss Restrictions Partnership vs. Corporation Personal Service Corporation - §269A S Corporation - §1361 Minors as Shareholders Bequests & Estate Ownership Trusts as Shareholders S Corporation Assets Built-In Gains Tax - §1374 Incorporation of a Farm Land Partnership Advantage Leasebacks Trusts Title Holding Business Trusts Co-Tenancy Taxation Percentage Interests Partition Partnership Partnership Taxation Allocation of Income & Deduction Partnership Recapitalization Two Class Format Valuation Guaranteed Payment Control & Management Estate Issues Family Partnerships Estate Savings Income Tax Savings Family Partnership Requirements Recognizing a Partner Control Transferability Donee as a Partner Trusts as Partners Minor as a Partner Purchased Interests Capital Interest in the Partnership Capital as a Material Income-Producing Item Source of Capital Family Partnerships Not Within §704(e) Real Estate Family Partnerships Business Family Partnerships Structuring the Family Partnership Limited Liability Company Outside Basis & Debt Share Advantage Substantial Economic Effect Rules Discharge of Indebtedness Income Suggested Uses Professional Firms Joint Ventures Substitute for Family Limited Partnership Retirement Plan Employer Costs Profit-Sharing Plan Money Purchase Pension Plan Defined Benefit Pension Plan Custodianship Estate Chapter 3 - Deferral Former §1034 - Repealed Section 1031 “Like-Kind” Exchanges Exchange Advantage Importance of Deferral Three Elements Exchange Requirement Two-Party Exchanges Multi-Party Exchanges Alderson Baird Delayed Exchanges Qualified Property Requirement Like-Kind Requirement Rules of Boot Related Party Exchanges Definition of Related Party Exceptions to the Two-Year Rule Contractual Protection Transactions Between A Partner & Partnership Foreign Real Property Exchanges Qualified §1031 Exchange of Personal Property Repealed Requirements for Personal Property - Prior to 2018 Like-Kind or Like-Class Like-Kind Personal Property - Identical Like Class Personal Property - General Asset or Product Class Five, Four, Then Six Digit Product Classes Other Personal Property Multiple Asset Exchanges Exchange Groups Aggregation & Allocation Delayed (Deferred) Exchange Regulations Deferred (Delayed) Exchange Definition Identification Requirements Identification & Exchange Periods Application of §7503 Method of Identification Property Description Incidental Property - 15% Rule Revocation Substantial Receipt Multiple Replacement Properties Actual & Constructive Receipt Rule Four Safe Harbors Safe Harbor #1 - Security Safe Harbor #2 - Escrow Accounts & Trusts Disqualified Person Who Is An Agent? Safe Harbor #3 - Qualified Intermediary Who Is A Qualified Intermediary? Direct Deeding Assignment Simultaneous Exchanges Safe Harbor #4 - Interest Interest Reporting - §468B(g) Restrictions On Rights to Money & Other Property - “g(6)” Limitations Outside Transfers of Money or Other Property Exchanges of Partnership Interests Effective Date of Partnership Provisions Retirement Plans Designing Your Retirement Sources of Retirement Income Qualified Corporate Programs Defined Contribution Plans Profit-Sharing Plan Money Purchase Pension Plan Stock Bonus Plan Employee Stock Ownership Plan 401(k) Plan Defined Benefit Defined Benefit Pension Annuity Plan SIMPLE Plans Self-Employed Plans Individual Retirement Accounts Penalty-Free Withdrawals Roth IRA - §408A Tax-Deferred Annuities Mechanics Types of Deferred Annuity Fixed Annuity Variable Annuity Minimum Investment & Charges Simplified Employee Pension (SEP) Plan Investment Assets Matching Income to Expenditures Participant Loan Regulations Additional Loan Requirements DOL Regulations Installment Sales Requirements Late Election Out of Installment Method Formula Mortgage in Excess of Basis Recapture Dealers At-Risk Rule Application Nonrecourse Financing Qualified Nonrecourse Financing Qualified Persons Deferred Compensation Options Chapter 4 - Reduction Tax Credits Work Opportunity Tax Credit (WOTC) – §51 Computation Welfare-to-Work & Work Opportunity Credits Merged Certification Trap Research Tax Credit - §41 Alternative Simplified Credit Relation to §174 - Repealed Rehabilitation Tax Credit - §47 Credit Rates Residential vs. Nonresidential External Wall Requirement Basis Reduction Low Income Housing Credit - §42 Amount of Expenditure Set Aside Requirement Qualifying Units Gross Rent Limitation - 30% Section 8 Assistance Exclusion Recapture of Credit 30-Year Rule State Credit Ceiling AGI Limitation Child & Dependent Care Credit - §21 Eligibility Employment Related Expenses Qualifying Out-of-the-home Expenses Payments to Relatives Allowable Amount Identification of Provider Estimated Taxes General Rule Annualized Method Cash-Saving Strategies Underpayment Cautions Tax Refund Trap Basic Deductions Interest Personal Interest – Repealed (Gone Long Ago) Investment Interest Prepaid Interest Points Huntsman Case Prepayment Penalty Interest on Real Estate Rental Property Home Owners Automobile Deductions Employee Automobile Deductions Business/Personal Proration Actual Cost Method Standard Mileage Rate Limitations on Standard Mileage Method Must Be an Individual Switching Methods Claiming Deductions Records Mileage Records Depreciation Traps Percentage Test Depreciation “Recapture” Depreciation Limits for Autos Leasing Restrictions Mileage Allowance for Leased Autos First-year Expensing - §179 Commuting - Local Business Transportation Revenue Ruling 90-23 - Superseded Temporary Work Site Definition Reserve Units Reimbursements Revenue Ruling 99-7 Business Entertainment Prior to 2018 Former Directly Related Test Former Associated Test 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 the Public Entertainment Sold to Customers Expenses Includible in Income of Non-employees Depreciation & Cost Recovery - §167 & §168 Personal Property ACRS - §168 Applicable Percentage Straight-line Election MACRS Recovery Classes MACRS Elections Straight-line 150% Declining Balance Bonus (or Additional First-year) Depreciation - §168(k) Phase Down Qualified Property - §168(k)(2) Nonqualified Property - §168(k)(2) MACRS Conventions Mid-quarter Convention Exception Election to Expense Assets - §179 Income Limitation Carryover Deduction Reduction Employee Restriction Recapture - §1245 Net Operating Losses - §172 Creation of an NOL Individual NOLs Carryovers Farming Corporate NOLs Further Limitations Tax Breaks for Nonitemizers Adjustments Credits Amended Returns Audit Avoidance Safest Amendments Not-So-Safe Amendments Chapter 5 - Income Splitting Using Progressive Tax Rates Splitting Income Among Group Members Wealth Allocation Major Formats Unincorporated Business Deductible Business Expenses Home-Office Deduction Requirements - §280A Non-Exclusive Use Exceptions Income Limitation Home Office Deduction Expansion Analysis Square Footage Safe Harbor - R.P. 2013-13 Retirement Plans Hiring Your Children Hiring Your Spouse Travel Expenses Casualty Losses Bad Debts Self-Employment Tax Incorporation “C” or Regular Corporation Planning Considerations When to Incorporate Formation Cash for Stock Property for Stock Stock for Services Stock for Debt Repeal of the “General Utilities” Doctrine Corporate Assets Leasing Lessor Gift & Leaseback Sale & Leaseback “S” Corporation Single Taxation S Corporation Return Planning Considerations Tax Advantages Formation Corporations That Qualify Income-Splitting Estimated Tax Payments Family Partnership Partner’s Distributive Share Partnership Return Schedule K-1 (Form 1065) Family Partnerships Family Members Capital Children as Partners Earned Income Gift of Capital Interest Custodianship & Children Taxation Kiddie Tax - §1(g) Income-Shifting Investments US Savings Bonds Municipal Bonds Growth Stock Real Estate Child Care & Education Nursery School & Day Care - §21 Special Schools Credit Plus Special School Expenses Employer Dependent Care Program - §129 Education Savings Bonds - §135 Notice 90-7 Interest on Education Loans - §221 Buying an Off-campus House Status as Second Home Status as Rental Property Gifting Gain for Education Expenses Gifts Gifts by Check Facts Holding Interest Free Loans De Minimis Exception Special Rule for Gift Loans Chapter 6 - Elimination Former Age 55 Exclusion - Repealed $500,000 Home Sale Exclusion - §121 Two-Year Ownership & Use Requirements Tacking of Prior Holding Period Vacant Land Mixed Business & Residence Use Prorata Exception Safe Harbor Regulations Change in Place of Employment Health Unforeseen Circumstances Use of Old §1034 & §121 - Gone Long Ago Limitations on Exclusion Renting to Parents Parent’s Benefits Children’s Benefits Municipal Bonds Tax-Exempt Interest on Qualified State or Local Obligations Reporting Private Activity Bonds Divorce & Separation Settlements Alimony Child Support Property Division Dependency Exemption Gifts & Inheritances Basis of Gift FMV Less Than Donor’s Adjusted Basis FMV More Than Donor’s Adjusted Basis Holding Period Income from Property Given to a Child Life Insurance Proceeds Not Received in Installments Proceeds Received in Installments Fringe Benefits Prizes & Awards - §74(b) Group Life Insurance Premiums - §79 Table I Accident and Health Plans - §106 & §105 Meals & Lodging - §119 Cafeteria Plans - §125 Educational Assistance Program - §127 Dependent Care Assistance - §129 Reporting Requirements for Dependent Care Programs Cash Reimbursement Plans In-kind Assistance Section 132 No Additional Cost Services - §132(a) & (b) Qualified Employee Discounts - §132(c) Services - §132(c)(1) Property - §132(c)(2) & (4) Working Condition Fringe Benefits - §132(d) De Minimis Fringe Benefits - §132(e) Spousal Insurance Transportation Fringe Benefits - §132(f) Moving Expense Reimbursements - §132(a)(6) Retirement Planning Services - §132(a)(7) On-premise Athletic Facilities - §132(j) Nondiscrimination Under §132 Taxation & Valuation of Benefits Valuation Provisions Leased Cars Purchased Cars Fleet-Average Rule Cents-Per-Mile Valuation Commuting Valuation Rule Chauffeur Services Eating Facilities Meal Subsidy Rule ERISA Compliance Welfare Plans Additional Requirements 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 Partial Days of Travel Unproven or Unspent Per Diem Allowances Reporting Per Diem Allowances Reimbursement Not More Than Federal Rate Reimbursement More Than Federal Rate Nonaccountable Plans Unreimbursed Employee Expenses Fixed & Variable Rate (FAVR) Allowances - R.P. 90-34 Elements Periodic Fixed Payment Periodic Variable Payment Limitations Record keeping Social Security Earnings Record Payments Exempt from Social Security Social Security Checkup Form SSA-7004 Form SSA-7050 Glossary |
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