Estate & Gift Taxation 2023 - 34.5 CPE

This presentation integrates federal taxation with overall financial planning. The
course will explore tax strategies relating to the central financial tactics of wealth
building, capital preservation, and estate distribution. The result is a unified
explanation of tax economics that will permit the tax professional to locate,
analyze, and solve financial concerns. Designed to improve the quality of services
to clients and the profitability of engagements, this program projects the
accountant into the world of financial planning. This course will give the
participant practice in analyzing problems, developing solutions, and presenting
final personal financial plans to clients.
The course surveys wills, living trusts, gifts, marital property, and probate
avoidance. Will and trust forms are explored along with living wills, durable
powers of attorney, and nominations of conservator. Designed to eliminate
estate problems and death taxes, the emphasis is on practical solutions that are
cost effective.
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 estate and gift taxation.
Advanced Preparation: None
2
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 Financial Tax Planning
At the start of Chapter 1, participants should identify the following topics
for study:
* Goals v. purposes
* Investment purposes
* Myths of retirement
* Investment goals
* Investment needs of five critical decades
* Investment vehicles & entities
* Retirement - the ultimate objective
* Retirement costs & income needs
* Retirement plan development
* Basic planning elements
Learning Objectives
After reading Chapter 1, participants will be able to:
1. Identify short-term financial goals and investment purposes, and
recognize the importance of defining, listing, and prioritizing realistic
goals specifying how investing allocation changes with age.
2. Determine the tax consequences of title holding methods by:
a. Specifying ways to hold title to assets starting with the simplest
and most direct way to hold property;
b. Cite the tax benefits and drawbacks of co-tenancies, corporations
(both C & S), partnerships, qualified retirement plans, and trusts
particularly as they relate to a client's after-tax investment return;
and
c. Identifying custodianship under the uniform acts and determining
how an estate can be tax beneficial to taxpayers.
3. Recognize the impact of retirement planning postponement
identifying the importance of early planning using the author's
suggested step process, specify a balance sheet method to plan
retirement, determine how to diversify portfolios by balancing liquid
and nonliquid assets, and identify the purpose of savings and strategies
to save.
3
After studying the materials in Chapter 1, answer exam questions 1 to 9.
ASSIGNMENT SUBJECT
Chapter 2 Building an Estate
At the start of Chapter 2, participants should identify the following topics
for study:
* Types of income
* Information reporting on taxable income
* Rules of budgeting
* Cash
* Acquisition
* Assets
* Rules of management
* Managing risk
* Taxes
* Leverage
Learning Objectives
After reading Chapter 2, participants will be able to:
1. Identify money management specifying income types, recognize
causes of increased taxable income for itemizing taxpayers, and specify
taxable income types and their proper reporting.
2. Determine the distinctions between tax-free municipal bonds from
fringe benefits in generating tax-free income, cite the benefits of tax
deferral, and identify tax-deferred investments.
3. Specify ways to shelter income stating how income sheltering
amplifies investment return.
4. Recognize the budgeting of income into cash by containing
expenditures with the author's step process and discretionary income
development, identify a client’s negative outlook on budgeting and
counter strategies, determine how to convert income into assets by
purchasing investments, and specify asset acquisition rules.
5. Specify tax-advantaged investments citing management rules, and
determine the economic impact of accelerating deductions, postponing
tax liability, and leveraging.
After studying the materials in Chapter 2, answer the exam questions 10
to 23.
ASSIGNMENT SUBJECT
Chapter 3 Preservation of Wealth
At the start of Chapter 3, participants should identify the following topics
for study:
4
* Obstacles to preservation
* Tracking spending
* Building savings
* Designing a budget
* Determining worth
* Analyzing net worth
* Ignorance
* Inflation
* Taxes
* Tax planning tactics
Learning Objectives
After reading Chapter 3, participants will be able to:
1. Identify spending habits stating how to design a budget to increase
discretionary income, determine net worth using a balance sheet, and
select assets and liabilities for an inventory on which to base financial
goals.
2. Specify why individuals should take primary responsibility for
investment planning including necessary self-education, determine the
allocation of financial resources among investments to maximize
return, and recognize the impact of inflation, risk versus return, and
basic income tax planning tactics.
After studying the materials in Chapter 3, answer the exam questions 24
to 28.
ASSIGNMENT SUBJECT
Chapter 4 Deferral
At the start of Chapter 4, participants should identify the following topics
for study:
* Elements of like-kind exchanges
* Related party exchanges
* Personal & multiple property regulations
* Delayed (deferred) exchange regulations
* Actual & constructive receipt rule
* Qualified contribution plans
* Tax-deferred annuities
* Installment sales
* At-risk rule
* Deferred compensation and options
Learning Objectives
After reading Chapter 4, participants will be able to:
5
1. Identify the benefits of tax deferral, recall the former use of tax
deferral under §1034, and cite the tax deferral advantage under §1031
listing its elements.
2. Specify the related party §1031 restrictions identifying prohibited
parties or entities and permissible disposition exceptions, cite
recommendations for the protection of exchange participants, and
recognize the history of the multiple property regulations stating the
unique netting requirements for multiple asset exchanges.
3. Recall the evolution of delayed exchanges naming allowable
transfers, determine how to select qualified replacement property,
specify constructive receipt safe harbors & methods to secure exchange
party performance, cite the §1031 partnership underlying asset rule,
identify retirement plan design, identify popular methods for providing
for retirement, and select near retirement investments.
4. Specify the requirements for an installment sale, determine how to
elect out of the installment method, identify the variables affecting
§453 availability, and determine how to use a property option to
receive income and postpone tax.
After studying the materials in Chapter 4, answer the exam questions 29
to 43.
ASSIGNMENT SUBJECT
Chapter 5 Reduction
At the start of Chapter 5, participants should identify the following topics
for study:
* Work Opportunity Credit & Rehabilitation Credit
* Low Income Housing Credit & Child & Dependent Care Credit
* Estimated taxes
* Interest
* Automobile deductions
* Business entertainment deductions
* Depreciation & cost recovery
* Net operating losses
* Tax breaks for nonitemizers
* Amended returns
Learning Objectives
After reading Chapter 5, participants will be able to:
1. Identify tax credits specifying qualified computational expenses,
limitations, and restrictions.
6
2. Recognize the estimated tax rules and procedures including
payment deadlines, underpayment penalties, and the economics of
overpaying estimated taxes, and specify the nondeductible interest
types.
3. Determine the deductibility of investment interest, prepaid interest,
points, and prepayment penalties recognizing the offset of passive
income with rental property mortgage interest.
4. Identify business vehicle operating costs using (or switching
between) the actual cost method or the standard mileage rate,
recognize the importance of expense and mileage records and specify
depreciation traps when purchasing a vehicle.
5. Recall the requirements for business expenses to meet the directly
related test, cite the elements of the associated test, identify the
business expense statutory exceptions, and recognize the application of
R.R. 90-23 and R.R. 99-7 to the deduction of transportation costs to a
temporary work location.
6. Determine business asset depreciation using both ACRS and
MACRS recovery classes, identify sources of §172 net operating losses
(NOLs) recognizing carryback and carryover rules, specify tax breaks
for nonitemizing taxpayers, recognize the advisability of filing an
amended return, determine how to avoid audits by claiming refunds
for provable items stating which return amendments are safest.
After studying the materials in Chapter 5, answer exam questions 44 to
57.
ASSIGNMENT SUBJECT
Chapter 6 Income Splitting
At the start of Chapter 6, participants should identify the following topics
for study:
* Using progressive tax rates
* Deductible business expenses
* Home-office deduction
* C or regular corporations
* S corporations
* Family partnerships
* Kiddie tax trap
* Childcare & education
* Gifts
* Interest-free loans
Learning Objectives
After reading Chapter 6, participants will be able to:
7
1. Recognize formats for income splitting, determine the tax treatment
of employee and self-employed business expenses particularly homeoffice
expenses stating the two non-exclusive use exceptions and the
income limitation, cite changes made to home office deduction under
TRA ’97, and recognize the ability of self-employeds to make annual
deductible contributions to a Keogh plan.
2. Identify the tax opportunities available to an unincorporated
business including retirement plans, the hiring of family members,
travel expenses, casualty losses, bad debts, and self-employment tax.
3. Determine the uses and tax characteristics of regular and S
corporations by:
a. Citing circumstances when incorporation is desirable,
b. Recognizing the taxation of these entities including their ability to
split income; and
c. Specifying initial §351 formation and capitalization issues and
identifying appropriate tax form filings for each entity.
4. Recognize the use of partnerships to split income among partners
including the use of §704(e) family partnerships and the consequences
of gifting a partnership interest to a child or to another family member.
5. Identify the use of a custodianship to split income specifying
planning considerations and good investments for children, recognize
deductions and credits for childcare, education, children, and §7872
loans, and specify the income and later estate tax benefits of gifts.
After studying the materials in Chapter 6, answer the exam questions 58
to 69.
ASSIGNMENT SUBJECT
Chapter 7 Elimination
At the start of Chapter 7, participants should identify the following topics
for study:
* $500,000 home sale exclusion
* Municipal bonds
* Divorce & separation settlements
* Gifts & inheritances
* Life insurance
* Fringe benefits
* Taxation & valuation of benefits
* Employee expense reimbursement & reporting
* Fixed & variable rate allowances
* Social security
8
Learning Objectives
After reading Chapter 7, participants will be able to:
1. Identify tax elimination techniques by:
a. Recognizing the current §121 home sale exclusion citing its
differences with prior tax law;
b. Determining qualifications for tax-free state or local obligations
including private activity bonds; and
c. Specifying the tax elimination aspects of family transactions such
as gifts, bequests, inheritances, life insurance, and even divorce.
2. Recognize employer deductions as a means to increase tax-free
incentive-based compensation for employees by:
a. Specifying rules for excluding fringe benefits under §132 and their
proper reporting on the W-2; and
b. Identifying popular employee fringe benefits including employerpaid
accident & health coverage, meals or lodging, cafeteria plan
benefits, §127 education assistance, achievement awards, group life
insurance, and dependent care assistance.
3. Determine how to value fringe benefits according to IRS
regulations, identify how to comply with ERISA requirements, specify
the proper reporting of reimbursed and unreimbursed business
expenses under accountable and nonaccountable plans, determine the
substantiation of auto expenses using a fixed and variable rate, and
specify eligible retirement benefits exempt from social security taxes.
After studying the materials in Chapter 7, answer the exam questions 70
to 77.
ASSIGNMENT SUBJECT
Chapter 8 Asset Protection
At the start of Chapter 8, 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
9
Learning Objectives
After reading Chapter 8, participants will be able to:
1. Identify the goals and purposes of asset protection recognizing the
objections some people have about shielding assets from creditors by:
a. Citing reasons for asset protection and situations that can
unexpectedly put assets and financial security at stake;
b. Specifying sources of lawsuits and the author's concept of
exploding and imploding liability; and
c. Determining asset protection using the primary concepts of
insurance, asset placement, and statutory protections.
2. Recognize the importance of creditor types associated with asset
protection and fraudulent transfers.
3. Specify fraudulent transfer laws listing badges of fraud, and define
statutes of limitation, criminal penalties, and permissible asset
transfers.
4. Recognize the degree and necessity of asset protection using net
worth and asset values on a balance sheet.
5. Identify the ways that insurance and buy-sell agreements can offer
asset protection by:
a. Citing the asset protection elements of homeowner's, automobile,
and disability insurance;
b. Specifying the parties under a life insurance contract stating
potential reasons for establishing an irrevocable life insurance trust,
and
c. Determining what constitutes entity purchase and cross-purchase
buy-sell agreements.
6. Recognize the asset protection advantages and disadvantages of
ownership formats and entities by:
a. Determining the use of individual ownership and corporate
ownership in an asset protection plan including the importance of S
corporations and their estate tax planning advantages;
b. Identifying testamentary trusts, living trusts, and subcategories of
trusts recognizing asset protection elements;
c. Specifying the various types of co-tenancy, citing their asset
protection dangers, and several types of partnerships citing their
variation from limited liability companies; and
d. Recognizing the unique asset protection qualities of retirement
plans, custodianship, and estates as asset protection tools.
7. Identify the formats that courts typically follow if a couple does not
have an enforceable premarital agreement, and determine what
10<