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Course Details

Travel, Entertainment, & Auto Rules from a Tax Perspective (Course Id 950)

Updated / QAS / Registry / EA   Add to Cart 
Author : Danny C Santucci, JD
Status : Production
CPE Credits : 24.0
IRS Credits : 24
Price : $167.95
Passing Score : 70%
Primary Subject-Field Of Study:

Taxes - Taxation for Course Id 950

Description :

Updating practitioners on current developments, this core program examines and explains the practical aspects of travel and entertainment deductions. Fundamentals are reviewed and planning opportunities identified. Creative strategies are discussed and evaluated along with traditional approaches. Taxpayers are once again looking to their tax professional 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.

Usage Rank : 0
Release : 2016
Version : 0.0
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 : 19-Jul-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 - 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 SUBJECT
Chapter 1 Travel Expenses

At the start of Chapter 1, participants should identify the following topics for study:

    * Job hunting travel
    * 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
Learning Objectives:

After reading Chapter 1, participants will be able to:
    1. Determine the difference between transportation and business travel under §162 by identifying types of business travel expenses and the deduction & amortization requirements of §165 and §195.
    2. Specify deductible travel costs to find a new job, identify investor travel expenses, and determine deductible transportation.
    3. Identify the business purpose requirement noting the complications of mixed business and personal travel noting the 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.
ASSIGNMENT SUBJECT
Chapter 2 Categories of Business Travel Expense

At the start of Chapter 2, participants should identify the following topics for study:

    * Domestic business travel primarily for business
    * 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
Learning Objectives:

After reading Chapter 2, participants will be able to:
    1. Identify the elements of domestic business travel noting what costs are deductible.
    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:
      a. Recognizing when foreign travel is fully deductible or disallowed, specifying the foreign travel allocation rule and determining total allowable foreign travel expenses; and
      b. Determining the allocation of expenses incurred in traveling on a foreign side trip and specifying exceptions to the general rule.
    4. Recognize the deduction of convention and meeting expenses based on Reg. §1.162 by:
      a. Specifying factors under the agenda test noting how the application of the this test determines if a meeting is predominantly business related;
      b. Identifying the availability of the convention and meeting deduction to professional groups, self-employed persons, and employees noting the videotaped lecture rule; and
      c. Determining the differences between foreign conventions and foreign travel and citing convention expenses permitted under §274(h)
    5. Determine the rules and limitations on cruise ship conventions noting 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.
ASSIGNMENT SUBJECT
Chapter 3 Local Transportation

At the start of Chapter 3, participants should identify the following topics for study:

    * Parking fees
    * Trips to union hall
    * Commuting & economic hardship
    * Irregular work site assignments
    * Home office
    * Hauling tools & equipment
    * Transportation between different sites
    * Transportation between different jobs
Learning Objectives:

After reading Chapter 3, participants will be able to:
    1. Determine what constitutes transportation, local transportation, and commuting, recognize when parking fees are deductible, and specify the effect of the Washburn case on commuting deductions.
    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 noting its impact on business transportation, and identify the hauling tool rule.
ASSIGNMENT SUBJECT
Chapter 4 Automobiles

At the start of Chapter 4, participants should identify the following topics for study:

    * Apportionment of personal & business use
    * Deduction limitations using 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 employer-provided automobile
Learning Objectives:

After reading Chapter 4, participants will be able to:
    1. Recognize the apportionment of business and personal use of an automobile by:
      a. Citing accepted methods of making an apportionment; and
      b. Identifying the automobile costs that are generally deductible and nondeductible and their exceptions.
    2. Determine actual cost method expenses, auto depreciation and §179 expensing by:
      a. Specifying a car for purposes of these provisions, identifying basis for figuring depreciation, and determining when a car is placed in service; and
      b. Identifying depreciation methods and conventions under the modified cost recovery system (MACRS) and citing the depreciation caps that apply to different vehicles.
    3. Recognize the §179 expensing deduction’s relationship to depreciation noting when to use it.
    4. Specify the impact of the §280F predominate business use rule, as established by the Tax Reform Act of 1984, on depreciation, excess deductions, and the former investment tax credit.
    5. Determine automobile leasing elements noting 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.
    6. Identify the mechanics of the standard mileage method including the ability to switch methods, deduct charitable and medical transportation, and MACRS depreciation limitations.
    7. Recognize the differences between trading and selling a vehicle noting employer-provided vehicles as §132 fringe benefits by:
      a. Determining the value of an employee’s personal use of such an automobile under the valuation methods and the exclusion limits for related deductions; and b. Specifying nonpersonal use vehicles noting reporting standards apply and identifying the reporting requirements for employers.
ASSIGNMENT SUBJECT
Chapter 5 Entertainment

At the start of Chapter 5, participants should identify the following topics for study:

    * Definition of entertainment
    * Allocation – business & nonbusiness persons
    * Directly related test
    * Associated test
    * Statutory exceptions
    * Quiet business meals & drinks
    * Ticket purchases
    * Percentage reduction for meals & entertainment
    * Entertainment facilities
    * Business gifts
Learning Objectives:

After reading Chapter 5, participants will be able to:
    1. Determine entertainment using Reg. §1.274 and other related deductible business expenses by:
      a. Recognizing the objective and subjective aspects of entertainment noting occasions where entertainment might be reclassified as a gift or travel expense;
      b. Identifying the stepped process of determining qualifying allowable entertainment expenses and how to allocate and prorate entertainment expenses including meals; and
      c. Specifying the elements of the ordinary and necessary requirement under §162.
    2. Identify the deductible entertainment tests of §274 by:
      a. Specifying the conditions of the “directly related” test noting examples of clear business settings presumed to meet the test;
      b. Determining the meaning of “associated with” in finding whether expenses have a business purpose; and
      c. Specify statutory exceptions to §274 identifying the tenth repealed exception.
    3. Identify deductible home entertainment expenses, determine the limits of ticket purchases, and cite provisions under which goodwill entertainment may be deductible.
    4. Recognize the 50% reduction for meals and entertainment and related expenses noting exceptions.
    5. Determine what constitutes an entertainment facility specifying excluded facilities types and costs and recognize the effect of OBRA ’93 on club dues.
    6. Identify the tax benefits and substantiation requirements for business gifts, employee achievement awards, and sales incentive awards by:
      a. Specifying the business gift dollar limitation and the incidental cost gift exclusion;
      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.
ASSIGNMENT SUBJECT
Chapter 6 Substantiation

At the start of Chapter 6, participants should identify the following topics for study:

    * Elements to be substantiated
    * 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
Learning Objectives:

After reading Chapter 6, participants will be able to:
    1. Identify expense categories subject to the detailed substantiation requirements of §274(d) and the exceptions to these requirements, and specify elements to be proven noting which elements must be proven for the expense type.
    2. Cite ways to substantiate travel and entertainment expenses noting required records by:
      a. Specifying when record entries must be made;
      b. Selecting a sampling of the use of listed property for portions of a taxable year; and
      c. Identifying documentary evidence.
    3. Recognize the sufficiently corroborated statements method of substantiation including when this method can be used, and determine methods that can be used to substantiate the requisite elements of listed property expenditures noting how long records should be retained.
ASSIGNMENT SUBJECT
Chapter 7 Reporting & Reimbursement of T&E Expenses

At the start of Chapter 7, participants should identify the following topics for study:

    * Employees
    * Accountable plans
    * Adequate accounting
    * Non-accountable plans
    * Self-employed persons
    * Meal & 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
Learning Objectives:

After reading Chapter 7, participants will be able to:
    1. Identify whether an employee must file Form 2106, determine the substantiation requirements of TRA ‘86 and Family Support Act 1988, and specify the requirements for an accountable plan noting “reasonable period of time” safe harbors.
    2. Determine how to adequately account for travel and other employee business expenses by:
      a. Specifying federal per diem rate methods noting whether an employer is related to an employee to decide which per diem rate may be used;
      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 noting their correct reporting of employee reimbursements.
    3. Determine how to report income and expenses with or without adequate accounting, specify the differences between entertainment and non-entertainment expenses incurred by an independent contractor, identify whether an employer can take deductions for reimbursed travel, entertainment, meals, and/or business gifts, and determine how to make appropriate disclosures on tax returns of required information.
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 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

2009 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”

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

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

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

Deduction Process

Ordinary & Necessary Requirement - §162

Three Tests of §274

Directly Related Test

Clear Business Setting Presumption

Services Performed & Prizes Presumption

Associated Test

Expenses for Closely Connected Persons & Spouses

Substantial Business Discussion

Timing

Meetings at Conventions

Statutory Exceptions

Food and Beverages for Employees - §274(e)(1)

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)

Quiet Business Meals & Drinks

Taxpayer’s (or Employee’s) Presence

Packaged Food & Beverage Items

Independent Contractor

Home Entertainment

Ticket Purchases - Face Value Limit

Exception for Charitable Sports Events

Special Limitation for Skyboxes - More Than One Event Rule

One Event Rule

Related Parties

Food & Beverages Separately Stated

Goodwill Entertaining

Percentage Reduction for Meals & Entertainment

Related Expenses

Application of Reduction Rule

Exceptions to Percentage Reduction

Regulations - 50% Disallowance Rule

Entertainment Facilities

What is an Entertainment Facility?

What Isn’t an Entertainment Facility?

Covered Expenses

Country Club, Social, Athletic, and Sporting Clubs

50% Test

Days of Business Use

Membership Fees

OBRA ‘93 Changes

Club Definition - Principal Purpose Test

Club Dues as Working Condition Fringes

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

Entertainment & Meal Expense Substantiation

Additional Requirements for Clubs & Other Entertainment Facilities

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

When an Employee Needs to File Form 2106

Employee Expense Reimbursement & Reporting

Family Support Act of 1988

Remaining Above-The-Line Deduction

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

Incidental Expense Definition

Meal Break Out & 50%Limitation

Reporting Per Diem Allowances

Reimbursement Not More Than Federal Rate

Reimbursement More Than Federal Rate

Non-Accountable Plans

Self-Employed Persons

Expenses Related to Taxpayer's Business

Expenses Incurred on Behalf of a Client & Reimbursed

Meal & Entertainment Expenses

With Adequate Accounting

Without Adequate Accounting

Non-Entertainment Expense Deduction

Employers

When Can an Expense Be Deducted?

Economic Performance Rule

Corporation

Nondeductible Meals

Employer Provided Auto

Disclosures Required on Tax Returns

Business Use of Automobiles

Business Use of Other Listed Property

 

Glossary

Taxes Course 950 Home: https://www.cpethink.com/tax-cpa-courses
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