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

* Need for asset protection
* Types of creditors
* Fraudulent transfers
* Preparation for asset protection
* Types of insurance
* Buy-sell agreements
* Individual ownership and corporate ownership
* Asset protection aspects of trusts
* Co-tenancy and partnerships
* Divorce

1. Point out the goals and purposes of asset protection and describe the objections some people have about shielding assets from creditors by:

a. Listing at least six reasons for asset protection and identifying sixteen situations that can unexpectedly put assets and financial security at stake;
b. Isolating eighteen common sources of lawsuits and analyzing the author's concept of exploding and imploding liability; and
c. Implementing asset protection using the primary concepts of insurance, asset placement and statutory protections.

2. Advise clients on the importance of the three types of creditors associated with asset protection and fraudulent transfers.
3. Summarize the fraudulent transfer laws listing several badges of fraud, clarify statute of limitations and criminal penalties, and differentiate permissible asset transfers.
4. Determine the degree and necessity of asset protection by figuring net worth using a balance sheet, determining asset values, and preparing a balance sheet. Identify various ways that insurance and buy-sell agreements can offer asset protection.
5. Analyze and contrast the asset protection advantages and disadvantages of ownership formats and entities by:

a. Comparing the use of individual ownership and corporate ownership in an asset protection plan and including the importance of S corporations and their estate tax planning advantages;
b. Discussing testamentary trusts, living trusts and at least eight subcategories of trusts pointing out asset protection elements;
c. Distinguishing among the various types of co-tenancy listing their asset protection dangers, describing several types of partnerships and comparing them to limited liability companies; and
d. Demonstrating the unique asset protection qualities of retirement plans, custodianship, and estates as asset protection tools.

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

* Divorce or separation instrument
* Alimony requirements of instruments executed after 1984
* Alimony requirements of instruments executed before 1984
* Deducting alimony paid & reporting alimony received
* Recapture of alimony for types A & B agreements
* Alimony substitution trusts & annuities
* Alimony paid by estate
* Child support
* COBRA coverage
* Qualified medical child support orders

1. Define “alimony” and “separate maintenance payments” under §§71 and 215.
2. Delineate three types of “divorce or separation instruments” under §71(b)(2) and explain how having an invalid decree, an amended instrument or a premarital agreement influences such an instrument.
3. Compare and contrast the alimony and child support tax provisions that currently apply with those that applied to instruments executed prior to 1985 by:

a. Listing seven variables that impact whether a payment is alimony since 1984 and determining whether a cash payment is deemed made to or on behalf of a former spouse in order to characterize it as alimony;
b. Explaining the tax treatment of housing costs for the family residence pointing out the impact of ownership by contrasting when the nonoccupying spouse owns the home with when the occupying spouse owns the home;
c. Identifying what rent or resident cost payments can be alimony when a family residence is jointly owned and occupied by a spouse or a taxpayer is required to make rent payments for a spouse;
d. Describing the tax treatment of life insurance premium payments, voluntary payments and payments to a remarried spouse noting advantages and disadvantages to each spouse;
e. Demonstrating how to recharacterize otherwise deductible alimony payments as nondeductible, determine whether spouses are members of different households, and warn as to the alimony pitfall of being required to make payments after a former spouse’s death;
f. Distinguishing child support from alimony and thereby avoid reporting errors;
g. Listing the three pre-1985 alimony requirements, defining periodic payments and determining whether certain payments would have qualified under these rules; and
h. Explaining the marital or familial relationship and showing the similarities and differences in the treatment of child support under current law and previous law.

4. Deduct alimony paid and report alimony received on the proper forms and lines and include required information when filing.
5. Describe the alimony recapture rule for various marital agreements and its impact on the tax treatment of past payments.
6. Analyze alimony trusts to realize tax advantage and security, explain the use of annuity contracts, and determine the proper tax treatment of alimony paid by an estate to a former spouse of a decedent.
7. Explain the tax treatment of child support, identify two circumstances where a payment will be fixed as child support, and list six events that determine whether a contingency is clearly child-related showing how to rebut this presumption of child support.
8. Advise clients on COBRA rules and qualified medical child support orders permitting them to make the most of health care coverage plans by:

a. Determining whether COBRA rules apply to different plans including notice & deadline requirements and listing four situations that may result in a termination of continuing coverage; and
d. Defining “qualified medical child support orders” comparing them to other similar orders and clarifying the procedures, requirements and jurisdiction of QMCSOs.

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

* Tax law changes
* Bankruptcy types
* Automatic stay
* Preferences
* Priorities
* Debt discharge
* Individual bankruptcy estate
* Individual debtor
* Corporate bankruptcy
* Homesteading & garnishment

1. Summarize the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, how it changed the procedures, qualifications and tax law, implement important new changes, and identify the three most common types of bankruptcy filings that can influence how the individual or business “goes bankrupt.”
2. Delineate the rules of automatic stay and levy action, and their impact on individuals and businesses who file bankruptcy, and on tax assessment and collection.
3. Differentiate between preferential and nonpreferential payments, and determine the priority of creditor claims.
4. Discern when debt is discharged under various bankruptcy types and describe how to establish an individual bankruptcy estate figuring its taxable income and pointing out its tax filing requirements.
5. Contrast the special rules for partnership and corporate bankruptcies, list debts covered under homesteading, and calculate permissible garnishment amounts describing four garnishment special rules.

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

* Premarital agreements
* Application of §1041
* Incident to divorce
* Property basis
* Purchase of residence between spouses
* Purchase of business & investment property between spouses
* Division of corporate business interests
* Division of partnership business interests
* Deferred v. present division of benefits
* Individual retirement arrangements

1. Identify three formats that courts typically follow if a couple does not have an enforceable premarital agreement, and compare post-nuptial and premarital agreements and how they relate to divorce settlements and divisions.
2. State the position of U.S. v. Davis on interspousal transfers pointing out the changes made by §1041, recite the requirements of §1041 and describe the scope of its application.
3. Explain two factors that determine whether a property transfer is incident to divorce including how to meet these factors or avoid §1041 altogether when desired and evaluate the application of §1041 to transfers in trust under §1041(e) and to third party transfers on behalf of a spouse or former spouse.
4. Determine any deferred tax liability by figuring property basis for the transferor spouse and transferee spouse under §1041 after a property settlement.
5. Apply §1041 to property transfers where the transferee assumes liabilities encumbering the property, and identify with appropriate records the holding period for an asset transferred between spouses or former spouses incident to divorce.
6. Identify the dangers of purchasing a former spouse's interest in property particularly a marital residence including its tendency to create deferred tax liability, list three of the effects of purchasing an interest in personal or real property used in a business or held for investment, determine potential recapture and explain the use of an exchange to dispose of low-basis property received in a §1041 transfer.
7. Compare and contrast sale, redemption, recapitalization, liquidation and third-party transfers as methods of dividing a business in a marital settlement citing unique provisions under §302, §368, §736 and §754.
8. Formulate an overall tax and economic strategy for the division of pension benefits in a marital settlement by:

a. Naming four popular methods of dividing retirement benefits in a divorce or separation action;
b. Defining “qualified domestic relations order” noting specific information to be included in such an order, and clarifying the tax consequences of QDRO distributions;
c. Comparing the pros and cons of deferred, present, and alternate property division arguments;
d. Discussing the treatment of IRAs at divorce considering the IRA deduction limit and rollovers; and
e. Describing military pensions and civil service pensions that may be available to a former spouse.

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

* Employee v. independent contractor
* Unemployment compensation
* Workers’ compensation
* Overall limitation of unreasonable compensation
* Unreasonable compensation factors
* Social security retirement benefits
* Social security tax
* Medicare
* Disability
* Americans with Disabilities Act of 1990

1. List twenty common-law rules used to determine employee statu for FICA, FUTA and federal income tax withholding, explain FICA and FUTA taxes including their reporting, and position clients to avoid unreasonable compensation issues.
2. Summarize the mechanics of the Social Security system allowing better retirement planning by:

a. Explaining how the system works, who qualifies, and when such participants are eligible for benefits; and
c. Calculating clients’ retirement benefits following a four-step process.

3. Identify two Social Security taxes, their rates and covered earnings to determine actual amounts taken from gross pay.
4. Distinguish Medicare Part A from Medicare Part B clarifying what is needed to qualify, and describe the eligibility requirements of Social Security disability and survivors’ benefits.

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

* Individual ownership & sole proprietorships
* Corporations
* Trusts holding title & business trusts
* Co-tenancy taxation, percentage interests & partition
* Partnership taxation & recapitalization
* Family partnerships
* Limited liability companies
* Retirement plans
* Custodianship
* Estate

1. List nine basic tax and legal title formats and distinguishing among these entity formats by:

a. Showing the advantages and disadvantages of holding property individually and through a sole proprietorship or a corporation, and how to avoid associated title pitfalls;
b. Categorizing C corporations into three groups and differentiate among them considering the estate-planning problems associated with each; and
c. Identifying at least four advantages that partnerships may have over corporations.

2. Analyze the S corporation rules by listing several tax advantages and disadvantages and name six disadvantages and four advantages of incorporating a farm.
3. Compare title-holding benefits and tax characteristics of trusts, co-tenancies, partnerships, and LLCs, distinguish among three types of retirement plans used to provide lifetime benefits, identify how title can be held on behalf of minors, outline the tax treatment of custodianships, and explain the basic tax treatment of a probate estate.

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

* Homeowner’s, automobile and disability insurance
* Life insurance
* Annuities
* Buy-sell agreements
* Entity & cross-purchase agreements
* Purchase price & terms
* Community property
* Professional corporations
* S corporations
* Sole shareholder planning

1. Compare and define the major characteristics of homeowner's, automobile, and disability insurance and what asset protection they may offer.
2. Differentiate between the four parties in whom rights are placed under a life insurance contract, cite the benefits, uses and types of life insurance, identify three variables that influence whether life insurance is taxable for federal estate tax purposes, and provide reasons for establishing an irrevocable life insurance trust in order to achieve several estate tax planning advantages.
3. Define annuities, clarify the types and characteristics of annuities, and list some of their tax advantages and disadvantages.
4. Characterize buy-sell agreements, distinguish an entity purchase agreement from a cross purchase agreement, and explain purchase prices and terms of buy-sell agreement, risks of having stock as community property and concerns about shares held by professional corporations, S corporations, and sole shareholder planning.

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

* Capital gains
* Home sales
* Installment method
* Contingent payments or price
* Section 1031 like-kind exchanges
* Delayed exchange regulations
* Actual & constructive receipt rule
* Foreclosure
* Repossession
* Condemnations

1. List four current rate baskets created by the capital gain provisions and how to treat capital assets in each category.
2. Outline the key elements of the §121 home sale exclusion including how to apply it, and apply the three safe harbor regulations associated with the exclusion.
3. Clarify the installment method rules and describe regulations related to using this method by:

a. Describing how the §453 sales have changed since the Installment Sales Revision Act of 1980 and defining the basic terminology of §453 including listing at least three of its requirements; and
b. Outline the related party and contingent payment rules and apply the §483 imputed interest and §§1271 through 1274 original issue discount rules.

4. Summarize the mechanics of a §1031 like-kind exchange by:

a. Explaining the advantage of §1031 as a tax deferral device naming at least three elements of an exchange;
b. Defining related parties and identifying conditions where they may sell or dispose of properties;
c. Outlining the personal and multiple property regulations and naming the general rule for netting liabilities; and
d. Defining a delayed exchange by listing the identification requirements, naming four safe harbors to avoid actual or constructive receipt and warning clients as to the “look thru” treatment of partnership interests according to the latest amendments to §1031.

5. Figure gain or loss on foreclosure or repossession noting reporting and filing requirements, and point out the hidden income tax danger of directly or indirectly acquiring one's own debt at a discount.
6. Compare and contrast personal property and real property repossessions, and determine when a bad debt deduction may be taken if the seller repossesses real property.
7. Determine the tax treatment of an involuntary conversion by:

a. Defining related terminology and the tax consequences of receiving a condemnation award or severance damages;
b. Figuring gain or loss from condemnations and directing clients about the reporting of payments associated with involuntary conversions;
c. Determining whether clients can postpone gain on condemned, damaged, destroyed or stolen property; and
d. Explaining the related party rule under §1033.

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

* Sources of retirement income
* Individual retirement accounts
* Tax-deferred annuities
* Fringe benefit provisions
* Employee achievement awards
* Cafeteria plans
* Self-insured medical reimbursement plans
* Employer provided automobile
* Interest-free & below-market loans
* Insurance

1. Describe the importance of designing a retirement plan and how to effectively design a plan following four important steps.
2. Classify qualified corporate plans, describe SIMPLE plans, self-employed plans, IRAs, tax-deferred annuities, and SEP plans, explain how to build up investment funds, evaluate variables in a current investment plan, and clarify the participant loan regulations under §4975.
3. Compare nonstatutory with statutory fringe benefits, describe no-additional-cost services, qualified employee discounts, working condition fringes and de minimis fringes to identify which property or services qualify under each benefit, and explain §79 group term life insurance.
4. List the §129 requirements and limits, define a §125 “cafeteria plan,” describe the §119 meals and lodging exclusion, outline the mechanics of §105 medical reimbursement plans, and identify the requirements and limits §127 programs.
5. Summarize the four valuation methods for employer-provided automobiles, analyze interest-free and below-market loans, outline key requirements and limitations on a number of other fringe benefits under §§217, 132, 67 212, 132(h)(5) and 280A, contrast the limited S corporation fringe benefits, and outline ERISA compliance requirements.

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

* Intentional torts
* Unintentional torts
* Business torts
* Damages
* Personal injury back pay
* Personal injury installment payments
* Nonphysical personal injury
* Punitive damages
* Wrongful death
* Interest & legal fees

1. Name the two basic types of tort and the remedies tort law provides.
2. Apply the personal injury exclusion to insure proper reporting of damages received because of injury, and determine how to report punitive damages, interest on injury awards and legal fees as determined according to case law.

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

* Provisions of wills
* Requirements of wills
* Executors and guardians
* Types of wills
* Title implications
* Changes to a will
* Advantages of a will
* Simple will
* Probate pros and cons
* Probate avoidance

1. Define four types of wills listing at least five functions a will can perform, identify at least four types of bequests, compare the duties of executors and guardians, and name four ways to hold title describing their tax ramifications.
2. Point out several advantages of a properly drafted will, discuss the distribution flow of simple wills, and compare the pros and cons of probate proceedings.

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

* Purpose of trusts
* Common elements of trusts
* Types of trusts
* Living trusts
* Income tax & trusts
* Gift tax & trusts
* Estate tax & trusts
* Identification, recital & property transfer clauses
* Income and principal & revocation and amendment clauses
* Trustee and trust termination clauses

1. Describe the four party relationship of a trust, give at least eight reasons to establish a trust, and differentiate among eight types of trusts analyzing their estate planning function.
2. Point out seven recommended living trust provisions analyzing the application of gift and income tax considering the grantor trust and unlimited marital deduction rules, and contrast “A-B” with “A-B-C” trust formats.

CHAPTER 1 - Asset Protection  

Why Asset Protection?

Situations That Create Danger

Sources of Lawsuits

Types of Liability

Basic Protection Concepts

Types of Creditors 

Evading Creditors 

Fraudulent Transfers 

Badges of Fraud 

Statute of Limitations 

Criminal Penalties 

Permissible Asset Transfers 

Asset Protection Goals 

Preparation 

Insurance 

Homeowners Insurance 

Automobile Insurance 

Disability Insurance 

Life Insurance 

Life Insurance Trust

Buy-Sell Agreements 

Definition 

Asset Protection Aspects of Common Entities 

Sole Proprietorship 

Corporate 

C Corporation 

No Pass Through 

The S Corporation - §1361 

Trusts 

Types of Trusts 

Revocable Trust

Land Trusts 

Irrevocable Trusts 

Testamentary Trust

Business Trusts 

Foreign Trusts - §679 

Asset Protection Trusts - APTs 

Foreign Jurisdictions 

Alternatives 

Income Taxation 

Estate & Gift Tax 

Creditor Protection 

Family Trusts 

Medicaid Trust

Grantor Retained Income Trust

Co-Tenancy 

Tenancy in Common 

Varying Percentages 

No Survivorship 

Joint Tenancy with Right of Survivorship 

Equal Percentages 

Tenants by the Entirety 

Right of Partition 

Partnership 

Family Partnerships 

Charging Orders 

Phantom Income to Creditor

Tax Issues 

Estate Savings 

Income Tax Savings 

Limited Liability Company 

Retirement Plan 

Retirement Fund Protection in Bankruptcy 

Custodianship 

Estate 

Divorce 

Premarital Agreements 

Uniform Premarital Act - The California Example 

Permitted Items of Agreement

Unenforceable Items 

Retirement Equity Act of 1984 

Benefits of a Premarital Agreement

Post-Nuptial Agreements 

CHAPTER 2 - Alimony & Child Support

 Spousal Support - aka Alimony

Divorce or Separation Instrument

Invalid Decree

Amended Instrument

Premarital Agreements

Instruments Executed After 1984

Alimony Requirements

Payment Must Be In Cash

Payments to a Third Party

Written Requests, Consents, or Ratifications

Payments for Family Residence 

Taxpayer-Owned Home 

Spouse-Owned Home 

Jointly-Owned Home 

Rent On Property Owned by a Third Party 

Payments for Life Insurance 

Contingent Interest

Voluntary Payments 

Payments to Remarried Spouse 

Designating Payments as Not Alimony 

Members of Different Households 

Exception 

Termination at Death 

Substitute Payments 

Child Support

Past Due Child & Spousal Support Payments 

Joint Return Prohibited 

Minimum Term Rule for 1985 & 1986 Instruments 

Exception 

Instruments Executed Before 1985 - Prior Law  

Alimony Requirements 

Periodic Payments 

Exception for Installment Payments 

10 Years Or Less 

More Than 10 Years 

Mixed Payments 

Marital or Family Relationship 

Property Settlement

Child Support

Deducting Alimony Paid 

Reporting Alimony Received 

Alimony as Compensation 

Recapture of Alimony for Type A & B Agreements 

Exceptions to Recapture 

Including the Recapture in Income 

Deducting the Recapture 

TRA ‘84 Recapture - 1985 & 1986 Instruments 

TRA ‘86 Recapture - After 1986 Instruments 

Exceptions 

Computation 

Alimony Substitution Trusts & Annuities 

Advantages of Alimony Trust

Disadvantages of Alimony Trust

Annuities 

Alimony Paid by Estate 

Child Support

Contingency Relating To the Child 

Clearly Associated With a Contingency 

Heller Case 

Rebuttable Presumptions 

COBRA Coverage 

Coverage Termination 

Notice 

Election 

Choice of Coverage 

Cost

Deductibles 

Qualified Medical Child Support Orders 

Definition 

Procedures & Duties 

Jurisdiction 

CHAPTER 3 - Bankruptcy

Federal Bankruptcy

Means Testing

Median State Income Test

Means Test

Credit Counseling

Tax Law Changes

Chapter 13 "Superdischarge"

Subordination Of Ad Valorem Tax Liens

Interest on Tax Claims

Tax Returns

Bankruptcy Types

Chapter 7 - Liquidation

Exempt Assets

Availability

Trustee Appointment

Chapter 11- Reorganization

Availability

Creditors’ Committee

Reorganization Plan

Chapter 13 - Wage-Earner Plan

Availability

Repayment Plan

Trustee Appointment

Automatic Stay 

Tax Assessment

Suspension of Statute of Limitation 

Immediate Assessment

Levy 

Tax Court

Tax Court Petition 

Preferences 

Trust Fund Taxes 

Allocation of Tax Payments 

Priorities 

Super Priority Claims 

Secured Claims 

Federal Tax Liens 

Priority Claims 

Tax Claim Determination 

Refunds 

Priority of Tax Claims 

First Priority Tax Claims 

Second Priority Tax Claims 

Third Priority Tax Claims 

Eighth Priority Tax Claims 

Debt Discharge 

Chapter 7 Discharge 

Chapter 11 Discharge 

Chapter 13 Discharge 

Discharge of Taxes 

Tax Liens 

Individual Bankruptcy Estate 

Separate Entity 

Tax Attribute Carryovers 

Termination of the Estate 

Filing Requirements 

Disclosure of Return Information 

Taxable Income 

Taxable Year

Gross Income 

Deductions & Credits 

Administrative Expenses 

Net Operating Loss Carryback 

Transfers to Debtor

Partnership & S Corporation Interests 

Request for Prompt Determination of Liability 

Tax Liability 

Individual Debtor

Tax Year Election 

Annualizing Taxable Income 

Making the Election 

Later Bankruptcy of Spouse 

Election Considerations 

Transfers between Debtor & Estate 

Net Operating Loss Carryback Limitation 

Partnership Bankruptcy 

No Separate Estate 

Discharge of Debts 

Corporate Bankruptcy 

Exemption Return Filing 

Personal Holding Company Tax 

Tax-Free Reorganizations 

§354, §355, & §356 

Corporate Liquidations under Chapter 7 

Carryover of Tax Items - §381 & 382 

Bankruptcy Exception 

Reduction of Carryforwards 

Section 269 Presumption 

Homesteading 

Types of Homesteads 

Property & Equity Covered 

Who Can Homestead? 

Excluded Debts 

Garnishment

CHAPTER 4 - Divorce Settlements & Divisions

Premarital Agreements

Uniform Premarital Act - The California Example

Permitted Items of Agreement

Unenforceable Items

Retirement Equity Act of 1984

Benefits of a Premarital Agreement

Post-Nuptial Agreements

Divorce Settlements - The Tax Trap

Section 1041

Application of §1041

Mandatory Scope

Property vs. Income 

Savings Bonds 

Receivables 

Interest

Imputed Interest

Incident to Divorce 

Related To Termination 

Rebuttable Presumption 

Divorce or Separation Instrument

Transfers in Trust

Third Party Transfers 

Property Basis 

Gift Variation 

Passive Activity Loss Property 

Property Transferred In Trust

Basis in U.S. Savings Bonds 

Negotiated Property Divisions 

Adjudicated Property Divisions 

Caselaw  

General Rule - Immediate & Specific 

Liabilities 

Holding Period 

Notice & Record Keeping 

Purchases Between Spouses 

Residence 

Home Mortgage Interest

Deferral & Exclusion of Gain 

Business & Investment Property 

Recapture 

Section 1031 Exchange 

Installment Sale of Assets 

Selected Asset Divisions 

Installment Obligations 

Business Interests 

Corporations 

Section 302 Redemption 

Recapitalization 

Partnerships 

Section 736(a) Payments 

Effect on Recipient

Section 736(b) Payments 

Effect

Exclusions From §736(b) Treatment

Liabilities 

Series of Payments 

Section 754 Election 

Insurance Policies 

Pension Benefits 

Qualified Domestic Relations Order

Taxation of Distributions 

Deferred v. Present Division of Benefits 

Deferred Division Arguments 

Present Division or Alternate Property Arguments 

Individual Retirement Arrangements 

IRA Deduction Limit

Rollovers 

Divorce Distributions 

Amounts Not Rolled Over

Military & Civil Service Pensions 

CHAPTER 5 - Employment

The Employment Relationship

Employee v. Independent Contractor

Common Law Rules Used by IRS

Factors

Statutory Employees

Real Estate Agents

Reporting Requirements

Penalties

Section 530 Relief

Unemployment Compensation

Federal Unemployment (FUTA) Tax

Depositing FUTA Tax

Unemployment Compensation

Withholding

Workers’ Compensation

Tax Exemption

Unreasonable Compensation 

Overall Limitation 

Allowance of Deduction 

Limitation on Accrual Deduction 

Employment Contracts 

Scope of Examination 

Factors 

Employee’s Qualifications 

Size of the Business 

Employee’s Compensation History 

Unreasonably Low Salaries 

Services Performed by the Employee 

Past Service 

Reasonable Dividends 

Bonuses as Constituting Dividends 

Payback Agreements 

Miscellaneous Factors 

Social Security 

How Social Security Works 

Social Security Participants 

Social Security Benefits 

Retirement Benefits 

Qualification 

Calculation 

Average Indexed Monthly Earnings (AIME)

Primary Insurance Amount (PIA)

Cost of Living Adjustment Using Dollar Bend Points 

Adjustment for Retirement Date 

Early Retirement

Effect of Late Retirement

Earnings Reduction Formula 

Annual Report of Earnings 

Special Monthly Rule 

Personalized Benefit Estimate 

Impact of Private Pension 

Direct Deposit

Social Security Tax 

Rates 

Covered Earnings 

Multiple Employers 

Covered Employment

Self-Employment

Tax after Retirement

Survivors Benefits 

Divorce 

Medicare 

Who Is Eligible For Hospital Insurance (Part A)? 

Who Can Get Medical Insurance (Part B)? 

Prescription Drug Coverage (Part D)

How Do You Get Medicare? 

What Does Medicare Pay For? 

What Medicare Does Not Pay For? 

Medigap Insurance 

Disability 

Social Security Disability Benefits 

Family Members 

HIV & AIDS 

Children 

Qualification 

General Disability Benefits 

Americans with Disabilities Act of 1990 

Disabled Access Credit - §44 

Eligible Small Business 

Eligible Access Expenditures 

Credit Amount

Architectural & Transportation Barrier Removal - §190 

CHAPTER 6 - 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

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 7 - Insurance

Homeowners Insurance

Automobile Insurance

Disability Insurance

Life Insurance

Purpose

Tax Overview

Income Tax

Transfer for Value Rule

Employee Death Benefit - §101(b) Repealed

Premiums

Lifetime Benefits

Section 72

Estate Taxes

Ownership

Gift Taxes

Community Property Gift Danger

Life Insurance Trust

Considerations 

Annuities 

Deferred Annuity 

Private Annuity 

Unsecured Promise 

Regulations Restrict Private Annuities 

Buy-Sell Agreements 

Definition 

Contractual Format

Funding 

Life Insurance Funding 

Term vs. Whole Life 

Policy Ownership & Premium Payment

Entity & Cross Purchase Agreements 

Tax Consequences - Cross Purchase Agreements 

Non-Deductible Premiums 

No Dividend Danger

Tax Consequences - Entity Purchase Agreements 

Non-Deductible Premiums 

Dividend Danger - §302 

Exception to Dividend Treatment

Constructive Ownership (Attribution) Rules 

“Estate/Beneficiary” Rule 

“Family/Trust/Corporation” Rule 

No Gain on Sale 

Estate Tax Valuation 

Using the Buy Sell Agreement to Set Value 

Buy-Sell Agreements - §2703 

Exceptions to §2703 

Arm’s Length Bargain 

Substantial Modifications 

Exceptions 

Purchase Price & Terms 

Valuation 

Community Property 

Professional Corporations 

Marketability Problems 

Controlled Disposition 

S Corporations 

Sole Shareholder Planning 

Complete Liquidations 

Alternative Dispositions 

Use of Life Insurance 

Estate Valuation 

One-Way Buy-Outs 

CHAPTER 8 - Property Dispositions

Capital Gains

Rates - §1

28% Rate Group

25% Rate Group - Unrecaptured §1250 Gain

15% Rate Group - Adjusted Net Capital Gain

Former 18% & 8% Rate Group (Repealed)

Deemed Sale Election (Repealed)

Hidden Rate

AMT

Small Business Stock

Netting of Capital Gains & Losses

Analysis

Home Sales - §121 

Two-Year Ownership & Use Requirements 

Tacking of Prior Holding Period 

Prorata Exception 

Limitations on Exclusion 

Installment Method 

Requirements 

Formula 

Definitions 

Mortgage in Excess of Basis 

Wrap-around Indebtedness 

Professional Equities Decision 

Recapture 

Related Party 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 

Transactions with Neither Maximum Selling Nor 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 

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

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 

Personal & Multiple Property Regulations 

Effective Date 

General Rule for Netting Liabilities 

Abandonment of Anticipatory (Re)Financing Proposal

Like-Kind Requirement for Personal Property 

Like-Kind 

Like Class 

Five vs. Four Digits 

Miscellaneous Category 

SIC Replaced by NAICS System  

Property Held for Investment

Class Priority 

Other Personal Property 

Goodwill Prohibition 

Multiple Asset Exchanges 

Definition 

Exchange Groups 

Aggregation & Allocation 

Residual Group 

Liabilities 

Delayed (Deferred) Exchange Regulations 

Effective Date 

Deferred (Delayed) Exchange Definition 

“Reverse-Starker” Transactions 

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 - Section 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 

Foreclosure 

Discharged Debt

Nonrecourse Indebtedness 

Recourse Indebtedness 

Reporting 

Form 1099A  

Timing & Character of Gain or Loss 

Gain 

Loss 

Lender’s Tax Impact

Foreclosure Sale 

Mortgage Debt Relief Act of 2007 (H.R. 3648)

Qualified Principal Residence Indebtedness 

Mixed Indebtedness 

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 

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 9 - Retirement & Employee Benefits 

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 

Roth IRA - §408A  

Contributions to Roth IRAs 

Phase-out

Excess Contributions 

Taxation of Distributions 

Qualified Distribution 

5-Year Exception 

Nonqualified Distributions 

Reporting 

Rollovers & Conversions 

Rollover from Traditional IRA  

Allowable Rollovers 

Income Taxation 

Rollover Considerations 

Conversions 

Transfer of Contributions 

Waiting Period 

Effective Date 

Penalty-Free Withdrawals 

Tax-Deferred Annuities 

Mechanics 

Types of Deferred Annuity 

Fixed Annuity 

Variable Annuity 

Minimum Investment & Charges 

Simplified Employee Pension (SEP) Plan 

Investment Assets 

Ultimate Question 

Participant Loan Regulations 

Additional Loan Requirements 

DOL Regulations 

Fringe Benefits 

Old Dichotomy - Statutory v. Nonstatutory 

Fringe Benefit Provisions 

TRA ‘84 - §132 

Discrimination 

Only Statutory Benefits 

No-Additional-Cost Services - §132(b)

Covered Employees 

Line of Business Requirement

Definition 

Qualified Employee Discounts - §132(c)