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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 104 ||| Review Questions: 80 ||| Final Exam Questions: 70 |
| CPE Credits : | 14.0 |
| IRS Credits : | 14 |
| Price : | $113.95 |
| 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 95 |
| Description : | This real estate taxation book is designed to survey selected “hot” topics having a direct impact on the property owner and investor. The emphasis is on problem areas where the unwary beginner and expert alike can be trapped. In this real estate taxation CPA course, you will learn to identify dangers involving installment sales, imputed interest, exchanging, equity participation, condemnation, passive loss rules, and transactions with foreign investors. |
| Usage Rank : | 16667 |
| Release : | 2023 |
| Version : | 1.0 |
| Prerequisites : | General understanding of federal income taxation. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
Real Estate Taxes vs. Property Taxes
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 15-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 - 95 |
| Keywords : | Taxes, Special, Problems, Real, Estate, Taxation, 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 the Chapter, participants should identify the following topics for study:
* 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. Identify types of income, from a financial and tax perspective, to be budgeted into cash so that income-producing assets can be acquired and managed for an effective investment plan. 3. Recognize the types of fringe benefits that employers can provide to employees tax-free. 4. Specify budget rules, ways that cash can be used, guidelines that should be applied when purchasing assets, and money management rules. Chapter 2 Installment Sales & Time Value of Money At the start of the Chapter, participants should identify the following topics for study:
* Imputed interest * OID * Real property sales & casual sales of personal property * Related party sales * Like-kind exchanges * Contingent payments or price * Dealer dispositions * Installment obligations in excess of $5 million * Dispositions of installment obligations After reading Chapter 2, participants will be able to:
2. Determine the impact of §483 (imputed interest rules) and §§1271 through 1274 (original issue discount rules) on installment sales. 3. Specify the rules associated with real property sales and casual sales of personal property, the superstructure of provisions associated with the related party rules of §453, and the exceptions that override basic installment planning. 4. Identify how the contingent payment sales have changed due to the Installment Sales Revision Act of 1980, specify other contingent payment rules, and determine circumstances when dispositions of installment obligations occur. Chapter 3 Mortgage Finance At the start of the Chapter, participants should identify the following topics for study:
* Interest deduction * Interest-free & below-market rate loans * Imputed interest & OID * Shared appreciation mortgages * Tax treatment overview * Types of equity participation debt * Tests to determine what constitutes interest * Option & conversion rights * Convertible indebtedness After reading Chapter 3, participants will be able to:
2. Determine interest using Deputy v. DuPont, 308 U.S. 488, and specify key aspects of personal interest, investment interest, prepaid interest, and points. 3. Recognize interest-free or below-market interest rate loans and how they relate to lenders’ interest income and borrowers’ interest paid under §7872. 4. Identify long-term financing techniques and characteristics of a shared appreciation mortgage and their impact on lenders and borrowers. 5. Specify tests that determine what constitutes interest and their effect on the tax treatments of equity participation, and identify equity participation debt. Chapter 4 Home Sales & Like-Kind Exchanges At the start of the Chapter, participants should identify the following topics for study:
* Special rules for ownership & use requirements * Prorata exception * Three elements of like-kind exchanges * Related party exchanges * Like-kind requirement for personal property * Multiple asset exchanges * Identification requirements for delayed exchange regulations * Actual & constructive receipt rule for delayed exchange regulations * Exchanges of partnership interests After reading Chapter 4, participants will be able to:
2. Determine the advantages of §1031 exchanges, their requirements, and the types of true exchanges, and cite the rules of boot and their effect on like-kind exchanges. 3. Recognize the regulations for related party exchanges, foreign real property exchanges, and multiple property exchanges, and specify the former codification systems and how they related to exchanged depreciable tangible properties. 4. Identify the regulations for delayed (deferred) exchanges, specify safe harbors that can be used without risk of actual or constructive receipt, and determine what partnership interests may be exchanged under §1031 and those that may not. Chapter 5 Involuntary Conversions At the start of the Chapter, participants should identify the following topics for study:
* Property voluntarily sold * Easements * Condemnation award * Severance damages * Special assessment withheld from an award * Gain or loss from condemnations * Postponement of gain * Replacement period * Related party rule After reading Chapter 5, participants will be able to:
2. Specify variables of a condemnation award including their effect on income and the cost of newly acquired property. 3. Determine severance damages and recognize the complexity of their treatment. 4. Cite the rules on the reporting of payments associated with involuntary conversions, determine gain postponement choices, and specify the related party rule. Chapter 6 Passive Loss & At-Risk Rules At the start of the Chapter, participants should identify the following topics for study:
* Material participation * Activity definition * Passive & nonpassive activities * Passive activity loss * Rental activities * Recharacterization of passive income * Passive activity credits * Passive activity audit guide * At-risk limits After reading Chapter 6, participants will be able to:
2. Recognize the suspension of disallowed losses and how it relates to passive losses, and specify the special rules for types of transfers that are not deemed to be fully taxable dispositions. 3. Identify taxpayers subject to §469 and whether clients fall into one of the categories of taxpayers who are subject to the passive loss rules. 4. Specify ways that a taxpayer can avoid having an activity become subject to the passive loss limits identifying the requirements for each, and recognize the effects of the §469 limitations on credits and losses from passive activities. 5. Identify an activity and passive activity loss, determine the treatment of carryover losses and the allocation process, recognize the characterization of gain from the exchange, sale, or other disposition of an interest in property used in an activity or held through a partnership or S corporation, and cite the special rule for rental real estate. 6. Specify the recharacterization rules under the regulations, determine passive activity credits, recognize the benefits and uses of the passive activity audit guide, and identify the impact of the at-risk limit rules. Chapter 7 Sales by Foreign Investors At the start of the Chapter, participants should identify the following topics for study:
* United States real property interests * United States property holding corporations * Exceptions to U.S. property holding corporations * Foreign corporations * Distributions * Withholding & reporting requirements * Non-foreign affidavit After reading Chapter 7, participants will be able to:
2. Identify interests in foreign corporations that can be used to avoid taxes on their disposition, and improve reporting of U.S. real property interests by foreign investors. Chapter 8 REITs At the start of the Chapter, participants should identify the following topics for study:
* Advantages over limited partnerships * Organizing a REIT * Self-liquidating REITs * Taxation After reading Chapter 8, participants will be able to:
2. Identify how management operates a REIT, determine ways that REITs and the fees they pay their advisers can grow, and specify requirements with regards to organization, operation, assets, and income that are set forth in §856 through §858. |
| 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 - Installment Sales & Time Value of Money Installment Method Requirements Formula Definitions Imputed Interest & OID Complexity Sale at a Loss Section 483 - Imputed Interest Exemptions Imputed Interest Rates Small Transaction Exception Intra-family Land Exception Timing Sections 1271-1274 & OID OID Rates Timing Cash Method Debt Instrument Exception Computation of OID Personal Use Property - Buyer’s Deduction of Imputed Interest Payments, Mortgages, Recapture & Repossession Real Property Sales – Payments After Year of Sale Mortgage in Excess of Basis Wrap-around Indebtedness Professional Equities Decision Recapture Practical Issues Section 1038 - Repossession by Seller Repossession of Principal Residence Related Party Sales Resale Rule Related Persons Exceptions Depreciable Property Contingent Payments or Price Installment Sales Revision Act of 1980 Contingent Payment Sale Maximum Selling Price Transactions Recomputation Fixed Payment Term Transactions Losses No Maximum Selling Price or Fixed Payment Term Losses Income Forecast Method Election Calculation Special Rules Qualification Repeal of Installment Treatment for Dealer Dispositions Definition Residential Lot & Timeshare Exception Interest Computation Qualification Installment Obligations in Excess of $5 Million Computation of Interest Definitions Pledging Disposition of Installment Obligations Gain or Loss Exceptions Substitution Tax-free Transfers Chapter 3 - Mortgage Finance Overview Two Major Benefits Mortgage Costs Amortization Lender’s Costs Interest Deduction - § 163 Personal Interest Phase-In Rules (Long, Long Ago in a Galaxy Far Away) Investment Interest Prepaid Interest Points Prepayment Penalty Lender’s Interest Income & Borrower’s Interest Paid Interest-Free & Below-Market Rate loans Two Imputations Tax Character Application Categories of Loans & Timing of Imputations All Other Loans Gift & Demand Loans Exceptions to Gift Loan Rules $10,000 De Minimis Exception $100,000 De Minimis Exception Imputed Interest & OID Complexity Sale at a Loss Overstated Interest Reporting Mortgage Interest Received From Individuals Equity Participation Debt The Shared Appreciation Mortgage - SAM Characteristics of a SAM Tax Treatment Overview Unsettled Treatment Revenue Ruling 83-51 Types of Equity Participation Debt Contingent Interest Option or Conversion Right Does Equity Participation Debt Constitute Interest? Basic Tests to Establish Interest Farley Realty Corp. Kena, Inc. Caselaw Factors Revenue Ruling 83-51 Significance of R.R. 83-51 Limitations of R.R. 83-51 Partnership Recharacterization - Culbertson Rule Tax Consequences of Debt Recharacterization Option & Conversion Rights Original Issue Discount - A Special Issue for Conversion & Option Rights Convertible Indebtedness Tax Consequences of Conversion Chapter 4 - Home Sales & Like-Kind Exchanges Home Sales - §121 Ownership & Use Requirements Special Rules Occasional Absences Tacking of Prior Holding Period Rental of Personal Residence Depreciation Vacant Land Mixed Personal & Business Use of Home Depreciation after May 6, 1997 Divorce Prorata Exception Safe Harbor Regulations Change in Place of Employment Health Unforeseen Circumstances Use of Old §1034 & §121 Limitations on Exclusion Remainder Interests 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 Reverse Exchanges - R.P. 2000-37 Chapter 5 - Involuntary Conversions Condemnations Threat of Condemnation Reports of Condemnation Property Voluntarily Sold Easements 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 Condemnation Replacement Property Acquired Before the Condemnation Extension Time for Assessing a Deficiency Related Party Rule Chapter 6 - Passive Loss & At-Risk Rules Passive Loss Rules Application Active Losses Credits Calculating Passive Loss - The Fish Rules Categories of Income & Loss Passive Portfolio Material Participation Suspension of Disallowed Losses Fully Taxable Disposition Abandonment & Worthlessness Related Party Transactions Credits Disallowance Increase Basis Election 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 - §1211 Carryforwards Allocation of Suspended Losses Taxpayers Affected Noncorporate Taxpayers Regular Corporations Personal Service Corporations Definition - Temp. Reg. §1.469-1T(g)(2)(i) Personal Services Principal Activity - 50% Test Substantially Performed by Employee-Owners - 20% Test Material Participation “Trade or Business” Definition February 19, 1988 Regulations General Rule for Individuals Record keeping Meaning of Participation Exceptions to Definition - The “Unwork” Rules Husband & Wife Counted as One Annual Test Pre-’87 Participation - 500 Hours Special Rules for Entities Limited Partnership Interests Presumption Exceptions to Presumption Trusts and Estates Retired & Disabled Farmers Corporations Activity Definition Final Regulations Relevant Factors Rental Activities Limited Partnership Activities Partnership & S Corporation Activities Consistency Regrouping Partial Dispositions Passive & Nonpassive Activities Trade or Business Characterization Based on Participation Rental Activity Exceptions Non-Passive Activities Rental Activities of Real Estate Professionals Eligibility Standards Working Interests in Oil & Gas Entities That Limit Liability Activities within Activities Passive Activity Loss Husband & Wife Special Rule for Closely Held Corporations Net Active Income Carryover of Disallowed Losses Treatment of Carryover Losses Allocation Process Significant Participation Activities Income from Dispositions of Property Used in Passive Activities Mixed Use Property Alternating Use De Minimis Use Rule - 10/10 Test Disposition of Appreciated Property Formerly Used in a Nonpassive Activity Rental Activities Special Rule for Rental Real Estate Five Conditions Active Participation Change in Participation Application of $25,000 Allowance Rule Aggregation & Ordering: Net Operating Loss Net Leases Definition Recharacterization of Passive Income Active Business Recharacterization Significant Participation Income Rules Ratable Portion of Income Formula Significant Participation Losses Rental of Property Developed by Taxpayer Self-Rented Property Portfolio Income Recharacterization Rules Rental of Nondepreciable Property Equity Financed Lending Activities Limitation on Recharacterization Passive Activity Credits Regular Tax Liability Allocable to Passive Activities Formula Exception for Real Estate Rental Activity Credits Application Credits Subject to Passive Activity Limits Allocation of Disallowed Credits Treatment of Carryover Credits Passive Activity Audit Guide Indicators of Audit Issues Investment Interest Material Participation Significant Participation Activities Active Participation Net Lease Properties Vacation Rentals Self-Charged Expenses Rental & Nonrental Activity Grouping Divorce At-Risk Limits Amount At Risk Taxpayers Affected Closely Held Corporation Qualified Corporation Exception Qualifying Business Requirements Loss Defined Disallowed Losses Form 6198 Partnership & S Corporation Limits Activities Covered by the At-Risk Rules Equipment Leasing Real Property Grouping of Activities Partners & S Corporation Shareholders At-Risk Amounts Borrowed Amounts Related Persons Subsequent Years Amounts Not At Risk Nonrecourse Financing Other Loss Limiting Arrangements Reductions of Amounts At Risk Chapter 7 - Sales by Foreign Investors FIRPTA United States Real Property Interests U.S. Property Holding Corporations Definition Exceptions Foreign Corporations Distributions Withholding & Reporting Requirements Non-foreign Affidavit Chapter 8 - Reits REIT Pools - §§856-860 Benefits Advantages Over Limited Partnerships Organizing a REIT Management Income & Growth Self-Liquidating REITs Taxation Organization & Operation Assets & Income Management Flexibility Penalty for Failure to Request Information De Minimis Rule For Tenant Service Income Glossary |
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