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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 0 ||| Review Questions: 0 ||| Final Exam Questions: 120 |
| CPE Credits : | 24.0 |
| IRS Credits : | 24 |
| Price : | $145.95 |
| 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 950 |
| Description : | Updating practitioners on current developments, this core program examines and explains the practical aspects of travel, entertainment, and auto tax deductions. Fundamentals are reviewed and planning opportunities are identified. Creative strategies are discussed and evaluated along with traditional approaches. Taxpayers are once again looking to their tax professionals for guidance and planning related to travel and entertainment expenses. The goal of this course is to understand and solve problems. Participants will learn to master the proper administration of these complex and often cumbersome provisions in a humorous and entertaining format..
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| Usage Rank : | 22667 |
| Release : | 2023 |
| Version : | 1.0 |
| Prerequisites : | General understanding of federal income taxation. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
Travel Expenses Definition and Tax Deductible Categories
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 20-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 - 950 |
| Keywords : | Taxes, Travel, Entertainment, Auto, Rules, from, Tax, Perspective, 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 Travel Expenses At the start of Chapter 1, participants should identify the following topics for study:
* Travel expenses of investors * Transportation expenses * Business purpose requirement * Circuit Court test for “tax home” * IRS test for “tax home” * No tax home * Two work locations * Away from home requirement * Temporary & indefinite assignments After reading Chapter 1, participants will be able to:
2. Specify deductible travel costs to find a new job, identify investor travel expenses, and determine deductible transportation. 3. Identify the business purpose requirement, the complications of mixed business and personal travel, and costs at a destination. 4. Recognize the IRS’s and Circuit Courts’ definition of “tax home,” identify when a taxpayer lacks a tax home, and specify the “away from home” requirement including the sleep and rest rule. 5. Identify temporary and indefinite job assignments recognizing the critical factor in distinguishing the two job assignments. Chapter 2 Categories of Business Travel Expense At the start of Chapter 2, participants should identify the following topics for study:
* Point-to-point rules * Extended stay or side trip rule * Foreign business travel * Conventions & meetings * Conventions outside the North American area * Cruise ship conventions * Luxury water travel * Spousal & companion travel expenses * Aides to sick & handicapped individuals After reading Chapter 2, participants will be able to:
2. Specify the “point-to-point” rule for different modes of transportation and which expenses incurred on a business trip with an extended stay or side trip are deductible. 3. Identify the rules for foreign business travel by:
b. Determining the allocation of expenses incurred in traveling on a foreign side trip and specifying exceptions to the general rule.
b. Identifying the availability of the convention and meeting deduction to professional groups, self-employed persons, employees, and the videotaped lecture rule; and c. Determining the differences between foreign conventions and foreign travel and citing convention expenses permitted under §274(h) 6. Specify the luxury water travel exception, recognize the companion travel expense limitations, and identify whether expenses for aides to handicapped taxpayers accompanying the taxpayers on business trips are deductible travel expenses. Chapter 3 Local Transportation At the start of Chapter 3, participants should identify the following topics for study:
* Trips to a union hall * Commuting & economic hardship * Irregular worksite assignments * Home office * Hauling tools & equipment * Transportation between different sites * Transportation between different jobs After reading Chapter 3, participants will be able to:
2. Identify the regular/irregular rule, determine a temporary work site under R.R. 90-23, recognize the impact of R.R. 94-47 and R.R. 99-7 on transportation between a taxpayer’s residence and workplace, specify the §280A home office requirements and their impact on business transportation, and identify the hauling tool rule. Chapter 4 Automobiles At the start of Chapter 4, participants should identify the following topics for study:
* Deduction limitations using the actual cost method * Expensing - §179 * Predominate business use rule * Auto leasing * Standard mileage method * Auto trade-in vs. sale * Employer-provided automobile * Nonpersonal use vehicle * Reporting of an employer-provided automobile After reading Chapter 4, participants will be able to:
b. Identifying the automobile costs that are generally deductible and nondeductible and their exceptions.
b. Identifying depreciation methods and conventions under the modified cost recovery system (MACRS) and citing the depreciation caps that apply to different vehicles. 4. Determine the §179 expensing deduction’s relationship to depreciation, its limitations, and when to use it. 5. Specify the impact of the §280F predominate business use rule on depreciation, excess deductions, and the former investment tax credit. 6. Determine automobile leasing elements recognizing vehicle purchase differences, specify various leasing terminology including closed-end and open-end, identify monthly lease payments and income inclusion amounts, and cite the leasing deduction restrictions. 7. Identify the mechanics of the standard mileage method including the ability to switch methods, deduct charitable and medical transportation, and MACRS depreciation limitations. 8. Recognize the differences between trading and selling a vehicle and the use of employer-provided vehicles as §132 fringe benefits by:
Chapter 5 Entertainment At the start of Chapter 5, participants should identify the following topics for study:
* Allocation – business & nonbusiness persons * Former directly related test * Former associated test * Statutory exceptions * Quiet business meals & drinks repeal * Ticket purchases * Percentage reduction for meals & pre-2018 entertainment * Entertainment facilities * Business gifts After reading Chapter 5, participants will be able to:
b. Identifying the pre-2018 stepped process of determining qualifying allowable entertainment expenses and the former allocation and proration entertainment expenses including meals; and c. Specifying the elements of the ordinary and necessary requirement under §162.
b. Determining the meaning of the former “associated with” test in finding whether expenses have a business purpose; c. Identify former deductible home entertainment expenses, determine the prior limits on ticket purchases, and cite provisions under which goodwill entertainment was previously deductible, and d. Specify the remaining statutory exceptions to §274 identifying the repealed exception. 4. Identify the tax benefits and substantiation requirements for business gifts, employee achievement awards, and sales incentive awards by:
b. Recognizing the tax treatment of joint spousal gifts and exclusions to the annual limitation; and c. Citing conditions that must be met for costs from a §74 qualified plan award program to be deductible. Chapter 6 Substantiation At the start of Chapter 6, participants should identify the following topics for study:
* Separate expenses * Adequate records method of substantiation * Sufficiently corroborated statements method of substantiation * Exceptional circumstances method of substantiation * Written policy statements * Treating vehicle as 100% personal * Exempt vehicles * Farming vehicles * Additional information requirements After reading Chapter 6, participants will be able to:
2. Cite ways to substantiate travel and pre-2018 entertainment expenses using required records by:
b. Selecting a sampling of the use of listed property for portions of a taxable year; and c. Identifying documentary evidence. Chapter 7 Reporting & Reimbursement of T&E Expenses At the start of Chapter 7, participants should identify the following topics for study:
* Accountable plans * Adequate accounting * Non-accountable plans * Self-employed persons * Meal & pre-2018 entertainment expenses for self-employed * When an employer can deduct expenses * Meals and employer-provided autos * Disclosure of business use of automobiles * Disclosure of business use of other listed property After reading Chapter 7, participants will be able to:
2. Determine how to adequately account for travel and other employee business expenses by:
b. Identifying incidental expenses under R.R. 2002-63 for accounting purposes and specifying the meal break out and 50% limitation; and c. Recognizing accountable plans and nonaccountable plans and their correct reporting of employee reimbursements. |
| Course Contents : | Chapter 1 - Travel Expenses Transportation and Travel Distinguished Travel Expenses Deductible Travel Expense Examples New Business Travel - §165 & §195 Job Hunting Travel Itemized Deduction & AGI Suspended Limit - §67 Transportation & Travel Exception - §62 Mileage Outplacement Services Exclusion Travel Expenses of Investors - §212 Two Percent Limitation - §67 Investment Seminar Travel Limitation - §274(h)(7) Travel Related to Rent or Royalty Producing Property Travel to Search for New Property - Capitalization Transportation Expenses Business Purpose Requirement Solely for Business Mixed Business & Personal Travel Costs All or Nothing for Travel Costs Costs at Destination Business Relationship Definition of “Tax Home” Circuit Court Test Rosenspan Case - 2nd Circuit Harvey Case - 9th Circuit IRS Test Family Stidger Case Tax Home Area No Tax Home Regular Place of Abode Itinerant Worker Two Work Locations “Principal” Factors Away From Home Requirement Sleep & Rest Rule Substantial Period Correll Case Temporary & Indefinite Assignments Time - The Critical Factor Prior Law Presumptions One Year or More IRS Presumption Less than Two-Year Exception Regular Home Temporary Job That Became Permanent Current Law - One-Year Rigid Time Rule R.R. 93-86 - The Flexible Rigid Rule? Return Trips from Temporary Assignment - Homesick Rule Family Presence Shows Indefinite Assignment Probationary Job - Always Indefinite Armed Forces Member Chapter 2 - Categories of Business Travel Expense Domestic Business Travel Primarily For Business Time 51/49 Percent Test Point-To-Point Rules Public Transportation - Scheduled Stop Method Private Car - Any Travel within U.S. Method Private Plane - Take Off to Landing Method Extended Stay or Side Trip Rule Foreign Business Travel All Business Foreign Travel - Full Deduction Primarily Personal Foreign Travel - No Travel Deduction Primarily Business Foreign Travel - Allocation Rule Allocation Formula Foreign Enroute Personal Activity Limitation Foreign Side Trip Allocation Exception to General Allocation Rule - Full Deduction Conventions & Meetings Agenda Test - Predominant Business Relationship Videotaped Lectures Availability Conventions outside the North American Area Reasonableness Factors Definition of North American Area Beneficiary Country Current Beneficiary Countries in the North American Area Allowable Expenses Cruise Ship Conventions Deduction Limitation Reporting Statements Luxury Water Travel Meals & Entertainment Separately Stated Exceptions to Luxury Water Travel Limitations Spousal & Companion Travel Expenses - §274(m) Additional Cost Rule Employee Exclusion of Spousal Travel Reimbursements - §132 Aides to Sick and Handicapped Individuals Direct Deduction Chapter 3 - Local Transportation Commuting Parking Fees Trips to Union Hall Commuting & Economic Hardship Irregular Work Site Assignments R.R. 90-23 & the Regular/Irregular Rule Temporary Work Site Definition Reserve Units R.R. 94-47 & Walker Case Revenue Ruling 99-7 Home Office Principal Place of Business Requirement Hauling Tools & Equipment Same Mode Exception Security Transportation between Two Jobs Different Sites Different Jobs Chapter 4 - Automobiles Apportionment of Personal & Business Use Car Pool Fines Parking Fees Interest Deduction Limit for Individuals Self-Employed Exception Property Taxes Sales Taxes Sales Tax Deduction for Qualified Vehicles (Expired) - §164 Actual Cost Method Deduction Limitations Definition of Car Depreciation and Expensing Basis Trade-In of Old Car for New Placed in Service Conversion to Business Use - “Lesser of” Rule MACRS - 5 (Actually 6) Years 200%Double Declining Balance Method 150% Declining Balance Method Election Straight-Line Method Election Half-Year Convention Mid-Quarter Convention Depreciation “Caps” - §280F(a) Passenger Auto Depreciation Safe Harbor Method - R.P. 2019-13 No Separate Depreciation Caps for Trucks & Vans Post-Recovery Period Depreciation - Max Reduction Rule Partial Business Use Improvements Bonus (or Additional First-year) Depreciation - §168(k) Expensing - §179 Cost of Car Basis Reduction Making the §179 Election Business Use Reduction SUV Limitation Predominate Business (More Than 50%) Use Rule Qualified Business Use Exclusions Change From Personal to Business Use Employee Use of Their Own Car Failure to Meet Predominate Business Use Rule Later Reduction in Qualified Use ITC Recapture - Highly Unlikely Straight-line Depreciation Excess Depreciation Recapture Short Tax Year Depreciation Reduction Auto Leasing Pros & Cons Leasing Terminology Closed-End vs. Open-End Lease Formula for Monthly Payments Leasing Deduction Restrictions Income Inclusion Amount Separate Lease Inclusion Table for Trucks & Vans Cars Leased For 30 Days or More After 1986 Computation of Inclusion Nine-Month Following Year Rule Buying v. Leasing Standard Mileage Method Limitations on Standard Mileage Method Use, Ownership & Prior Depreciation Switching Methods Charitable Transportation Medical Transportation Auto Trade-In vs. Sale Working Condition Fringe Benefits Qualified Transportation - §132(f) Exclusion Limits Employer-Provided Automobile General Hypothetical Valuation Method Special Method #1 - Lease Value Annual Lease Value - For Entire Calendar Year Fair Market Value Safe Harbor Value Items Included in Annual Lease Value Table Prorated Annual Lease Value - For 30 Days or More Daily Lease Value - For Less Than 30 Days Optional Fleet-Average Valuation Rule (FAVR) Special Method #2 - Cents per Mile Regular Use - 50% Business Mileage Rule - 10,000 Miles Items Included In Cents-Per-Mile Rate Special Method #3 - Commuting Value Control Employee Employer-Provided Transportation in Unsafe Areas Qualified Employee Nonpersonal Use Vehicles - 100% Excludable Clearly Marked Police or Fire Vehicles Unmarked Law Enforcement Vehicles Law Enforcement Officer Trucks & Vans Pickup Truck Guidelines Van Guidelines Qualified Automobile Demonstration Use Full-time Automobile Salesperson Restrictions on Personal Use Reporting by Employer Election Not to Withhold for Income Taxes Value Reported Accounting Period Special Accounting Period - Pour Over Method Chapter 5 - Entertainment 2018 General Entertainment Deduction Repeal Final Entertainment Repeal Regulations - TD 9925 Entertainment Definition Maintained Meals at or During Disallowed Entertainment Business Meals Travel Meals Repeal of Directly Related & Associated With Tests Confirmed Statutory Exceptions of §274(e) Continue Pre-2018 Entertainment - What's Gone Definition Objective Test with Subjective Considerations Entertainment Presumption on “Close Calls” Gift Exception Travel Facility Exception Meals as Entertainment No Double Deduction Allocation - Business & Nonbusiness Persons Proration Former Four-Step Deduction Process Step #1: Ordinary & Necessary Requirements - §162 Step #2: Three Tests of §274 Former Directly Related Test Clear Business Setting Presumption Services Performed & Prizes Presumption Former Associated Test Expenses for Closely Connected Persons & Spouses Substantial Business Discussion Timing Meetings at Conventions Former & Current Statutory Exceptions Tests Miscellaneous Former Entertainment Provisions Quiet Business Meals & Drinks Home Entertainment Expenses Ticket Purchases - Face Value Limit Exception for Charitable Sports Events Special Limitation for Skyboxes One Event Rule Related Parties Food & Beverages Separately Stated Goodwill Entertaining Employee Business Expenses Post-2018 Entertainment - What's Left Statutory Exceptions - §274(e) Food and Beverages for Employees - §274(e)(1) Deductions Eliminated for Some Meals After 2015 Expenses Treated as Compensation - §274(e)(2) Reimbursed Expenses - §274(e)(3) Recreational Expenses for Employees - §274(e)(4) Definition of Highly Compensated Employee Employee, Stockholder and Business Meetings - §274(e)(5) Trade Association Meetings - §274(e)(6) Items Available to Public - §274(e)(7) Entertainment Sold to Customers - §274(e)(8) Expenses Includible in Income of Non-employees - §274(e)(9) Temporary 100% Deduction for Meals & Beverages - §274(n)(2)(D) Notice 2021-63 Lavish or Extravagant Restriction Ordinary & Necessary Requirement Business Meals Deduction - §274 Percentage Reduction for Meals - §274(n)(1) Related Expenses Application of Reduction Rule Exceptions to Percentage Reduction Entertainment Facilities What is an Entertainment Facility? What Isn’t an Entertainment Facility? Covered Expenses Country, Social, Athletic, and Sporting Clubs 50% Test Days of Business Use Membership Fees & Dues Disallowed - §274(a)(3) OBRA '93 & TCJA Club Definition - Principal Purpose Test Exceptions to §274(a)(3) Dues Disallowance Club Dues as Possible Working Condition Fringe Disposition of an Entertainment Facility Professional Organizations and Luncheon Clubs Business Gifts - §274(b) & §102 Incidental Costs Excludable Partnership & Joint Returns Exclusions Employee Achievement Awards - §274(j) Qualified Plan Sales Incentive Awards Chapter 6 - Substantiation Detailed Substantiation Categories Exceptions to Substantiation Requirements Elements to Be Substantiated Travel Expense Substantiation Meal Expense Substantiation Additional Club & Entertainment Facility Requirements Repealed Business Gifts Expense Substantiation Listed Property Expense Substantiation Separate Expenses Aggregation Repetitious Expenses Substantiation Methods Adequate Records - Method #1 Timing of Record Entries Sampling Documentary Evidence Canceled Check or Charge Slip Account Statement Business Purpose Employee Expense Statements When is Documentary Evidence Required? Sufficiently Corroborated Statements - Method #2 Direct Evidence Requirement Exceptional Circumstances Destroyed Records Special Substantiation for Listed Property Special Method #1: Written Policy Statements No Personal Use Policy No Personal Use Except for Commuting Special Method #2: Treating Vehicle as 100% Personal Special Method #3: Exempt Vehicles Pickup Trucks & Vans Special Method #4: Farming Vehicles - 75% Presumption Additional Information Requirements Retention of Records Chapter 7 - Reporting & Reimbursement of T&E Expenses Employees Form 2106 Restricted 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 Reporting Per Diem Allowances Reimbursement Not More Than Federal Rate Reimbursement More Than Federal Rate Nonaccountable Plans Self-Employed Persons Expenses Related to Taxpayer's Business Reimbursed Expenses Incurred on Behalf of a Client With Adequate Accounting Without Adequate Accounting Employers When Can an Expense Be Deducted? Economic Performance Rule Nondeductible Meals Employer-Provided Auto Disclosures Required on Tax Returns Business Use of Automobiles Business Use of Other Listed Property Glossary |
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