Making the Best of Bad Situations 2019 - 2 CPE Credit Hours
This mini-course will teach participants how to apply, implement, and evaluate the strategic tax aspects of marital and financial setbacks. Property transfers, asset divisions, alimony, filing status, exemptions, and child support are examined. The cancellation of indebtedness income inclusion rules are discussed 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 and bad debt treatment under §166 is reviewed.
Completion Deadline & Exam: This course, including the examination, must be completed within one year of the date of purchase. In addition, unless otherwise indicated, no correct or incorrect feedback for any exam question will be provided.
Course Level: Overview. This program is appropriate for professionals at all organizational levels.
Field of Study: Taxes
Prerequisite: General understanding of federal income taxation.
Recommended Credits: 2 CPE Hours
Advanced Preparation: None
Learning Assignment & Objectives
As a result of studying the assigned materials, you should be able to meet the objectives listed below.
At the start of the materials, participants should identify the following topics for study:
* Marital tax liability
* Transfers incident to divorce
* Alimony & child support
* Debt cancellation & income inclusion rule
* Reduction of tax benefits
* Repossession of personal property
* Repossession of real property
* Non-business bad debts
* Business bad debts
After reading the materials, participants will be able to:
1. Recognize tax considerations and tax guidance for marital breakdowns and, identify marital status noting the effect marital status has on filing status and federal income tax obligations.
2. Identify state marital property provisions, cite the elements of §1041 identifying at least two tax traps for the unaware, and specify variables that determine whether a payment is alimony.
3. Determine the exceptions to the general income inclusion rule noting their tax impact, and recognize the various issues related to calculating gain or loss resulting from foreclosure or repossession including the differences between personal and real property repossession, amount realized on sale or other distribution of property in a foreclosure, and basis calculation on repossession of property.
4. Identify nonbusiness and business bad debts under §166 noting their differences in Code requirements and amount allowed.