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| Author : | Danny C Santucci, JD |
| Course Length : | Pages: 128 ||| Word Count: 65,533 ||| Review Questions: 100 ||| Final Exam Questions: 68 |
| CPE Credits : | 13.5 |
| IRS Credits : | 13 |
| Price : | $110.95 |
| 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 2381 |
| Description : | This course will teach participants how to apply, implement, and evaluate the strategic tax aspects of marital dissolutions and living together arrangements. Current perspectives on property transfers, asset divisions, alimony, filing status, exemptions, and child support are examined with an emphasis on planning considerations. The cancellation of indebtedness income inclusion rules are examined in the context of debt forgiveness and property foreclosure. Emphasis is given to the exceptions from income inclusion contained in §108. The tax treatment of property repossession under §1038 is explored with detail given to the calculation of gain and received property basis. Finally, bad debt treatment under §166 is reviewed and critical distinctions are made between business and non-business debts. |
| Usage Rank : | 16667 |
| Release : | 2024 |
| Version : | 1.0 |
| Prerequisites : | General understanding of federal income taxation. |
| Experience Level : | Overview |
| Additional Contents : | Complete, no additional material needed. |
| Additional Links : |
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| Advance Preparation : | None. |
| Delivery Method : | QAS Self Study |
| Intended Participants : | Anyone needing Continuing Professional Education (CPE). |
| Revision Date : | 12-Oct-2024 |
| 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 - 2381 |
| Keywords : | Taxes, Making, Best, Bad, Situations, Personal, Bankruptcy, Divorce, Foreclosure, Bad Debts, Repossessions, Other, Tax, Tribulations, v14, 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 Basic Marital Tax Matters At the start of Chapter 1, participants should identify the following topics for study:
* Joint return * Separate returns * Head of household * Exemptions * Divorce costs * Withholding & estimated tax * Community property states * Ending the community * Living together After reading Chapter 1, participants will be able to:
2. Identify the requirements for filing a joint return and how to avoid being penalized. 3. Determine the key elements of filing separate returns including what items to report and identify whether or not married taxpayers should file separate returns. 4. Cite the requirements for filing as head of household and the tax advantages and disadvantages of this filing status. 5. Recognize the repeal of personal & dependency exemptions, their former phaseout, availability, and reporting requirements. 6. Differentiate custodian and noncustodian parent, identify the dependency determination impact, determine the current “qualified child” standard using residency, and identify requirements that must be met for parents to treat a child as a qualifying child of a non-custodial parent. 7. Identify deductible and nondeductible divorce expenditures specifying which spouse is subject to tax imposed upon withheld wages, and recognize the effects of making separate estimated tax payments or joint declarations of estimated tax. 8. Determine community property and the community property states, identify the effects of conversion and commingling of property, and how to avoid such marital property issues. 9. Identify community income earned by married couples for reporting purposes, recognize the allocation of income when spouses have different residences, specify the requirements for the special community income allocation rules of §66(a), and determine the treatment of alimony payments versus community share. 10. Identify the effect of living together on filing statuses and dependency, recognize the tax consequences of having a living together contract to avoid tax traps, and specify the results of Marvin v. Marvin. Chapter 2 Transfers Incident to Divorce At the start of Chapter 2, participants should identify the following topics for study:
* Premarital agreements * Application of §1031 * Incident to divorce * Property basis * Purchases of residence between spouses * Purchases of business interests between spouses * Selected asset divisions of residence & business interests * Real & personal property * Pension benefits After reading Chapter 2, participants will be able to:
2. Specify the position of U.S. v. Davis on interspousal transfers and the changes made by §1041, identify the requirements of §1041 and the scope of its application, determine whether a property transfer is incident to divorce, and identify how to meet these factors or avoid §1041 altogether when desired. 3. Determine the application of §1041 to transfers in trust under §1041(e) and to third-party transfers on behalf of a spouse or former spouse and recognize deferred tax liability by identifying property basis for the transferor spouse and transferee spouse under §1041 after a property settlement. 4. Specify the application of §1041 to property transfers where the transferee assumes liabilities encumbering the property and the obligation to supply basis information and recognize the dangers of purchasing a former spouse's interest in property, particularly a marital residence and its tendency to create deferred tax liability. 5. Determine tax effects of purchasing an interest in personal or real property used in a business or held for investment, recognize potential recapture, identify the use of a §1031 exchange to dispose of low-basis property received in a §1041 transfer, specify common disposition alternatives available on divorce, and identify the home sale exclusion requirements. 6. Recognize sale, redemption, and third-party transfers as methods of dividing a business citing unique provisions under §736, identify whether gain or loss on a sale of real or personal property is capital or ordinary, and recognize the role and tax treatment of life insurance in property settlements. 7. Specify popular methods of dividing private and military retirement benefits in a divorce or separation action identifying the requirements and tax consequences of a “qualified domestic relations order (QDRO). Chapter 3 Spousal & Child Support At the start of Chapter 3, participants should identify the following topics for study:
* Alimony requirements of instruments executed after 1984 * Alimony requirements of instruments executed before 1984 * Deducting pre-2019 alimony paid & reporting alimony received * Pre-2019 recapture of alimony for type A & B agreements * Alimony substitution trusts & annuities * Alimony paid by an estate * Child support * COBRA coverage * Qualified medical child support orders After reading Chapter 3, participants will be able to:
2. Identify the tax treatment of child support and circumstances where a payment will be fixed as child support, and specify events that determine whether a contingency is clearly child-related and how to rebut this presumption of child support. 3. Recognize the COBRA and qualified medical child support order rules by identifying whether COBRA rules apply to different plans including and specifying situations that may result in termination of continuing coverage and determine what constitutes a “qualified medical child support order” recognizing the procedures, requirements, and jurisdiction of QMCSOs. Chapter 4 Avoiding Tax on Debt Cancellation & Foreclosure At the start of Chapter 41, participants should identify the following topics for study:
* Real property business debt * General ordering of tax attribute reduction * Reduction of tax benefits * Basis reduction * Partnership bankruptcy * Corporation stock-for-debt rule * S corporation bankruptcy * Foreclosure * Discounted acquisition of debt After reading Chapter 4, participants will be able to:
2. Identify tax attribute reductions and their application when reducing canceled debt, determine gain or loss resulting from foreclosure or repossession, specify the timing and character of the gain or loss, and cite the hidden income tax danger when acquiring one's own debt at a discount. Chapter 5 Repossession At the start of Chapter 5, participants should identify the following topics for study:
* Non-installment method sales * Installment method sales * Basis of repossessed personal property * Bad debt * Repossession of real property * Figuring gain on repossession * Seller’s former home exception After reading Chapter 5, participants will be able to:
2. Determine adjusted basis on repossession and identify limits on taxable gain under §1038. Chapter 6 Bad Debts At the start of Chapter 6, participants should identify the following topics for study:
* True debt * Mechanics’ liens * Reporting & recovery * Credit transactions * Former business bad debts * Insolvency of a partner * Business loan guarantees * Specific charge-off method * Nonaccrual-experience accounting method After reading Chapter 6, participants will be able to:
2. Identify the qualifications for §166 tax treatment of business bad debt specifying the debt’s relationship to business and the potential creation of a net operating loss. Appendix A Legal Aspects of California Foreclosure At the start of Appendix A, participants should identify the following topics for study:
* Nonjudicial foreclosure * Judicial foreclosure process * Liability on mortgages and deeds of trust |
| Course Contents : | Chapter 1 - Basic Marital Tax Matters Filing Status Marital Status Unmarried Abandoned Spouse Rule - §7703 Married Same-Sex Marriage Joint Return Citizenship Liability Innocent Spouse Exception Refund Offset Program - §6402 Injured Spouse - Form 8379 Separate Returns Itemized Deductions Medical Expenses Property Tax & Interest State Income Taxes Casualty Loss Separate vs. Joint Dilemma Disadvantages of a Separate Return Advantages of a Separate Return Joint Return After Separate Returns Head of Household Requirements Considered Unmarried Keeping Up a Home Qualifying Person Nonresident Alien Spouse Exemptions Personal Exemptions Spouses Former Spouse Deemed Personal Exemption for Related Incorporating Provisions Dependency Exemptions & Credits Unified Definition of a Qualified Child Four Tests Test #1 - Residency (or Time) & Citizenship Children of Divorced or Separated Parents Test #2 - Relationship Test Test #3 - Age Test Test #4 - Joint Return Restriction Medical Expenses Child-Care Credit Definition of a Qualified Relative $500 Credit for Certain Dependents - §24(h)(4)(A) Final Regulations of Qualifying Relatives - TD 9913 Divorce Costs Tax Advice - §212(3) Fees to Obtain Alimony or Protect Income - §212(1) & (2) Fees to Obtain Property - §1012 & 1016 Nondeductible Expenses Withholding & Estimated Tax Joint Estimated Tax Payments Refunds & Deficiencies Nonresident Alien Spouse Withholding Marital Property Common Law Property Equitable Distribution Community Property Community Property States Transmutation Commingling Income Reporting Spouses with Different Residency Statuses Special Income Rules For Spouses Living Apart - §66(a) & §879 Mandatory Application Earned Income Social Security Benefits Other Income Denial of Community Property Reporting - §66(b) Community Reporting Relief Provisions - §66(c) Ending the Community Annulment Separation Pre-2019 Alimony vs. Community Income Living Together Married v. Unmarried Tax Rate Comparison Sham Divorce Dependency Exemptions Attributable Income Alimony & Property Divisions Chapter 2 - Transfers Incident to Divorce Property Rights Marital Property Common Law Property Community Property Equitable Distribution Separate Property Asset Division Principles Premarital Agreements Uses & Benefits Control & Scope Limitations Retirement Equity Act of 1984 Enforceability Requirements Checklist Uniform Premarital Act - The California Example Permitted Items of Agreement Unenforceable Items Property Settlements Section 1041 Application of §1041 U.S. vs. Foreign Spouse Mandatory Scope Property vs. Income Unpaid Income Savings Bonds Receivables Interest Imputed Interest Transfers to a Former Spouse 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 & Recordkeeping Purchases Between Spouses Residence Home Mortgage Interest Deferral & Exclusion of Gain Business & Investment Property Recapture Section 1031 Exchange Asset Separation Related Parties Two-Year Restriction Foreign Property Form 8824 Spousal Transfers Installment Sale of Assets Selected Asset Divisions Residence Section 121 Home Sales Two-Year Ownership & Use Requirements Special Divorce Rules Tacking of Prior Holding Period Prorata Exception Limitations on Exclusion Installment Obligations Business Interests Corporate Stock Cases & Rulings Section 302 Stock 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 Real & Personal Property Classification of Assets Character of Gain or Loss Capital Assets - §1221 Long-Term or Short-Term Installment Sale Net Gain or Loss Treatment of Net Capital Gains Section 1231 Assets Gains & Losses Recapture Of Net Ordinary Losses Ordinary Assets Depreciable Property Recapture on Personal Property Section 1245 Property Treatment of Gain Recapture on Real Property Section 1250 Property 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 Retirement Planning After Divorce Social Security Benefits Divorced Spouse Benefits Divorced Widow(er) Benefits Military Pensions Divorced Spouse Benefits Jurisdiction Requirement Disposable Pay Direct Payment Divorced Widow(er) Benefits Social Security Offset Civil Service Pensions Divorced Spouse Benefit Divorced Widow(er) Benefit Railroad Pensions Divorced Spouse Benefit Divorced Widow(er) Benefit Bankruptcy Chapter 3 - Spousal & Child Support Spousal Support & Alimony Pre 2019 Decrees #1 - Divorce or Separation Instrument - (§71(b)(1)(A)) Invalid Decree Amended Instrument Premarital Agreements Voluntary Payments Payments to Remarried Spouse #2 Different Households - (§71(b)(1)(C)) Exception #3 Termination at Death - §71(b)(1)(D)) Substitute Payments #4 Payments Must Be In Cash - (§71(b)(1)) Payments to a Third Party Written Requests, Consents, or Ratifications Payments for Family Residence Taxpayer-Owned Home Spouse-Owned Home Jointly-Owned Home Mortgage Payments on Jointly-Owned Home Taxes & Insurance on Jointly-Owned Home Utilities Rent On Property Owned by a Third Party Payments for Life Insurance Contingent Interest #5 No Designation as Not Alimony - §71(b)(1)(B) #6 Payment Cannot Be Child Support - §71(c)(1) Past Due Child & Spousal Support Payments #7 Joint Return Prohibited 2019 & Later Decrees – No More Alimony Tax Treatment of Alimony Instruments Executed Before 2019 Alimony Paid - Deductible Reporting Alimony Received - Income Alimony as Compensation Recapture of Alimony Exceptions to Recapture Including the Recapture in Income Deducting the Recapture Exceptions Computation Alimony Substitution Trusts & Annuities Annuities Alimony Paid by an Estate Instruments Executed After 2018 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 4 - Avoiding Tax on Debt Cancellation & Foreclosure Income Inclusion Rule Exceptions from Income Inclusion Order of Exclusions Bankruptcy Case Exclusion - §108(a)(1)(A) Insolvency Exception - §108(a)(1)(B) Qualified Farm Debt Exclusion - §108(a)(1)(C) Qualified Farm Debt - §108(g)(2) Qualified Person - §108(g)(1) Real Property Business Debt - §108(a)(1)(D) Qualified Debt Exclusion Limit Ordinary Income Recapture Partnerships Deemed Distribution Rules S Corporations Student Loan Exception - §108(f) Purchase Money Debt Reduction Exception - §108(e)(5) Cancellation of Deductible Debt Exception - §108(e)(2) Reduction of Tax Benefits (Attributes) - §108(b) General Ordering of Tax Attribute Reduction Basis Reduction Depreciable Property Election Procedure Required Reduction Timing of Basis Reduction Limit on Basis Reduction Recapture of Basis Reductions Exempt Property Special Basis Reduction Rule for Qualified Farm Debt Qualified Property Basis Reduction Order Exclusion Limit Individual Bankruptcy Partnership Bankruptcy Depreciable Property Allocation of Debt-Discharge Income Corporate Stock-For-Debt Rule Token Share Inclusion Workout Inclusion Recapture of Gain on Later Sale Debt Contributed to Capital Debt-For-Debt Exchange Earnings & Profits S Corporation Bankruptcy Net Operating Losses Adjustments to Shareholder’s Basis in Debt Bankruptcy Estate as Shareholder Reporting Mortgage Debt Relief Act of 2007 Qualified Principal Residence Indebtedness Mixed Indebtedness Amount Realized On Sale or Other Distribution of Property Foreclosure Nonrecourse Indebtedness Recourse Indebtedness Reporting Form 1099A Timing & Character of Gain or Loss Gain Loss Lender’s Tax Impact Foreclosure Sale Discounted Acquisition of Debt Transactions Involving Related Parties Related Persons Chapter 5 - 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 Chapter 6 - Bad Debts Non-Business Bad Debts Totally Worthless Determining Worthlessness Required Basis or Income Inclusion True Debt Loan or Gift Loan Guarantees Political Debts Mechanics’ Liens Insolvency of Contractor Secondary Liability on Home Mortgage Reporting Recovery Business Bad Debts Credit Transactions Income Inclusion Accrual Method Taxpayers Cash Method Taxpayers Former Business Debt Acquired from a Decedent Political Debts Insolvency of Partner Business Loan Guarantees Reporting Methods of Treating Bad Debts Specific Charge-Off Method Partly Worthless Debts Deduction Disallowed Totally Worthless Debts Recovery of Bad Debt Property Received for a Debt Bankruptcy Claim Sale of Mortgaged Property Net Operating Loss Nonaccrual-Experience Accounting Method Performing Services Interest & Late Charges Appendix A -Legal Aspects of California Foreclosure Introduction The Players Non-Judicial Foreclosure Desirability of a Non-Judicial Foreclosure Availability of a Non-Judicial Foreclosure Notice of Default Notice of Trustee Sale Conducting the Foreclosure Sale Considerations after the Foreclosure Sale Judicial Foreclosure Process Desirability of a Judicial Foreclosure Availability of a Judicial Foreclosure Commencing a Judicial Foreclosure Appointment of a Receiver Obtaining a Deficiency Judgment Liability on Mortgages/Deed Of Trust Summary & Observations Glossary |
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