Asset Protection - Tax & Financial Aspects 2023 - 17.5 CPE

This informative course covers traditional planning tools and their utilization to
protect assets. The Uniform Fraudulent Conveyance Act, the Bankruptcy Code,
and various aspects of the tax law are highlighted in describing asset protection
aspects of corporations, partnerships, limited liability companies, family partnerships,
trusts, retirement plans, insurance products, and other conventional tools.
Special topics include protection against lawsuits, costs of long-term illness, divorce
settlements, foreign asset protection trusts, statutory protections, homestead
provisions, exempt assets, cancellation of indebtedness taxation, and marital
agreements.
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.
Advanced Preparation: None
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Learning Assignments & Objectives
As a result of studying each assignment, you should be able to meet the objectives
listed below each assignment.
ASSIGNMENT SUBJECT
Chapter 1 Introduction to Asset Protection
At the start of Chapter 1, participants should identify the following topics
for study:
* Situations that create danger
* Sources of lawsuits
* Types of liability
* Basic protection concepts
* Types of creditors
* Badges of fraud
* Statute of limitations & criminal penalties
* Permissible asset transfers
* Asset protection goals
* Preparation for asset protection
Learning Objectives
After reading Chapter 1, participants will be able to:
1. Specify the goals and purposes of asset protection, the objections
some people have about shielding assets from creditors, and reasons
for asset protection.
2. Identify situations that can unexpectedly put assets and financial security
at stake and the common sources of lawsuits.
3. Recognize the author's concept of exploding and imploding liability
how dealing with them is necessary for a complete asset protection
plan, and the concepts of insurance, asset placement, and statutory
protections when applied to asset protection.
4. Specify the types of creditors associated with asset protection and
fraudulent transfers recognizing their salient characteristics.
5. Identify the fraudulent transfer provisions which protect current and
future creditors, the badges of fraud in the Uniform Fraudulent Transfer
Act, applicable statutes of limitation, potential criminal penalties
associated with fraudulent transfers, and the differences between
fraudulent asset transfers and permissible asset transfers.
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6. Determine net worth using a balance sheet, identify asset values, and
show the preparation of a balance sheet in the context of determining
the depth and scope of suitable asset protection planning.
After studying the materials in Chapter 1, answer exam questions 1 to 26.
ASSIGNMENT SUBJECT
Chapter 2 Insurance
At the start of Chapter 2, 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
Learning Objectives
After reading Chapter 2, participants will be able to:
1. Identify characteristics of homeowner's, automobile, and disability
insurance and what asset protection they may offer.
2. Specify persons in which rights are placed by life insurance and reasons
to purchase life insurance and the benefits, uses, and types of life
insurance, identify variables that influence when life insurance is taxable
for federal estate tax purposes, and cite reasons for establishing an
irrevocable life insurance trust in order to achieve several estate tax
planning advantages.
3. Determine what constitutes an annuity and the types and characteristics
of annuities specifying their tax advantages and disadvantages.
4. Identify entity purchase and cross-purchase agreements recognizing
tax and legal advantages and pitfalls.
After studying the materials in Chapter 2, answer exam questions 27 to
41.
ASSIGNMENT SUBJECT
Chapter 3 Asset Placement
At the start of Chapter 3, participants should identify the following topics
for study:
* Individual titles & sole proprietorship
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* Categories of C corporations
* S corporations
* Types of trusts
* Trust taxation
* Co-tenancy
* Partnership taxation & recapitalization
* Family partnerships
* Limited liability companies
* Retirement plans
Learning Objectives
After reading Chapter 3, participants will be able to:
1. Recognize ways to hold property, what taxpayers must do before beginning
an asset protection program, and the advantages and disadvantages
of holding property individually and through a sole proprietorship
specifying how these pitfalls can be avoided.
2. Identify guidelines that corporate business owners should follow to
protect their corporations, issues regarding potential personal liability
for shareholders, officers, and directors, protection ideas for corporate
business owners, and §469 passive loss restriction considerations.
3. Specify the advantages and disadvantages of using a corporation in
asset protection planning, the differences among categories of C Corporations,
recognize the importance of S corporations and their estate
tax planning advantages, and determine the advantages and disadvantages
of transferring farmland to a corporation.
4. Identify testamentary trusts, living trusts recognizing subcategories
of trusts, and changes necessary when used for asset protection.
5. Determine how different trusts are taxed with regard to income tax,
estate tax, and gift tax, identify the grantor trust rules and the effect of
the treatment on owners for income tax purposes, and specify the tax
consequences of several trust types.
6. Recognize the various types of co-tenancy and their impact on asset
protection and tax liability.
7. Identify partnerships and their types, ways that partnerships may be
better than corporations from an estate-planning viewpoint, how partnerships
are taxed, how estate freezing works to minimize death taxes,
and the structuring of family partnerships.
8. Specify the advantages and disadvantages of a limited liability company
(LLC), problems associated with its newness, and how professional
firms, joint ventures, and families can benefit from establishing
LLCs.
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9. Recognize how retirement plans can be used to provide substantial
lifetime benefits to a business owner and to employees while simultaneously
providing asset protection.
10. Identify important characteristics of custodianship and estates as
asset protection tools.
After studying the materials in Chapter 3, answer exam questions 42 to
67.
ASSIGNMENT SUBJECT
Chapter 4 Bankruptcy
At the start of Chapter 4, 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
Learning Objectives
After reading Chapter 4, participants will be able to:
1. Determine how the 2005 Bankruptcy Act changed procedures, qualifications,
and tax law, and identify the most common bankruptcy types
recognizing their influence on how an individual or business “goes
bankrupt.”
2. Specify the rules for automatic stay and levy and their impact on
“freezing” creditor activity, tax assessment, and collection.
3. Identify the differences between preferential and nonpreferential
payments specifying the priority of creditor claims.
4. Recognize when debt is discharged under various bankruptcy types
and how to establish an individual bankruptcy estate determining its
taxable income and filing requirements, and identify the special rules
that apply to individual debtors, partnership bankruptcies, and corporate
bankruptcies.
5. Specify debts covered under homesteading, and determine permissible
garnishment amounts recognizing special garnishment rules.
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After studying the materials in Chapter 4, answer exam questions 68 to
83.
ASSIGNMENT SUBJECT
Chapter 5 Avoiding Tax on Debt Cancellation & Foreclosure
At the start of Chapter 5, participants should identify the following topics
for study:
* Qualified farm debt exclusion
* 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
Learning Objectives
After reading Chapter 5, participants will be able to:
1. Recognize the effect that debt cancellation has on net worth and potential
income inclusion from cancellation of indebtedness income,
and specify exceptions to the general income inclusion rule and their
tax impact.
2. Identify tax attribute reductions and their application when reducing
canceled debt, cite the special basis reduction rules, recognize the depreciable
property election in reducing the basis of depreciable property
before reducing any other tax attributes, determine what constitutes
individual, partnership, and S corporation bankruptcy, and specify the
variables used in determining whether shares of stock issued to a creditor
are nominal or token.
3. Determine gain or loss resulting from foreclosure or repossession
identifying reporting and filing requirements, specify the timing and
character of the gain or loss, and cite the hidden income tax danger of
directly or indirectly acquiring one's own debt at a discount.
After studying the materials in Chapter 5, answer exam questions 84 to
94.
ASSIGNMENT SUBJECT
Chapter 6 Divorce Settlements & Divisions
At the start of Chapter 6, participants should identify the following topics
for study:
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* 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
Learning Objectives
After reading Chapter 6, participants will be able to:
1. Identify the formats that courts typically follow if a couple does not
have a premarital agreement and post-nuptial and premarital agreements
including how they relate to divorce settlements and divisions.
2. Determine the application of §1041 to interspousal transfers, the
tax trap of deferred tax liability, and the transferor’s and transferee’s
property basis under §1041(b).
3. Specify the deferred gain or loss associated with selling an interest in
the marital residence, recognize the application of §1041 to selected
business, retirement, and investment assets, and identify conditions
that must be met for a like-kind exchange to be nontaxable.
4. Recognize tax consequences resulting from the division of certain
types of property between spouses or former spouses incident to divorce,
and identify the elements of a Qualified Domestic Relations
Order (QDRO).
After studying the materials in Chapter 6, answer exam questions 95 to
107.
ASSIGNMENT SUBJECT
Chapter 7 Protecting Assets from Old Age & Catastrophic Illness
At the start of Chapter 7, participants should identify the following topics
for study:
* Managing the estate
* Medicare
* Medicaid & countable assets
* Medicaid & non-countable assets
* Medicaid & inaccessible assets
* Private insurance
* Healthcare decisions
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* Supplemental Security Income
* Income & assets
* Disability benefits
Learning Objectives
After reading Chapter 7, participants will be able to:
1. Specify ways to manage an incompetent person’s estate, determine
joint tenancy and its benefits, and identify the levels of conservatorship
that can influence assistance in management and protection of an estate
and/or personal care.
2. Recognize the concept of durable power specifying how to maximize
its use, and identify funded revocable living trust variations and their
advantages.
3. Determine eldercare benefits of Medicare and Medicaid, countable
income, and asset groups under Medicaid.
4. Identify possible health care decisions such as having a living will,
determine the distinctions between Supplemental Security Income and
Social Security disability benefits, identify asset groups for SSI, and
specify requirements for SSI and Social Security disability benefits.
After studying the materials in Chapter 7, answer exam questions 108 to
120.
Notice
This course and test have been adapted from materials and information contained in the
above text and any supplemental material provided. This course is sold with the understanding
that the publisher is not engaged in rendering legal, accounting, or other professional advice
and assumes no liability whatsoever in connection with its use. Since laws are constantly
changing, and are subject to differing interpretations, we urge you to do additional research
and consult appropriate experts before relying on the information contained in this course to
render professional advice.