Guide to Federal Corporate & Individual Taxation

Upon successful completion of this course, participants will be able to:

Chapter 1

• Identify current rates, selected deductions, statutory amounts, and their withholding and/or estimated tax responsibility and specify the various filing statuses and their filing requirements recognizing the advantages and disadvantages of each.
• Determine what constitutes gross income under §61 stating the tax treatment of fringe benefits, rental income, prizes, and awards, and specify how debt discharge and foreclosure can result in taxable income.
• Identify the mechanics of income exclusions such as education-related exclusions, insurance, personal injury awards, and foreign earned income.
• 4. Recognize income tax deductions and their use to reduce tax liability by identifying interest related to businesses. investments, qualified residences, and deductions for medical expenses, charitable contributions, casualty losses, and moving expenses.
• Determine distinctions among several types of tax credits for children and education identifying amounts and eligibility requirements.

Chapter 2

• Specify the tax consequences on the sale of easements and the holding period and basis of inherited and gifted property, identify the application elements of the §121 home sale exclusion specifying the ownership and use requirements, and recognize the §453 installment method requirements, the residential lot exception, and the pledging rule limitation.
• Identify the elements necessary for a §1038 repossession, the different rules for real property and personal property repossessions, and calculating basis and gain on repossession.
• Specify the tax treatment of a §1033 involuntary conversion on condemnation or threat of condemnation; differentiate between condemnation awards and severance damages; and identify replacement periods needed to postpone gain.
• Recognize the scope of the §465 at-risk rules and their effect on property depreciation, and identify the requirements, taxation, and types of §1031 like-kind exchanges.
• Identify planning considerations for benefit planning and funding a qualified retirement plan; determine the compensation base used for funding calculations and the impact of PBGC insurance in assuring benefits.
• Identify the requirements of the basic qualified retirement plans, recognize the permissible and required contribution limits for retirement plans, and specify the requirements of IRAs and the Roth IRAs recognizing their contribution, rollover, and RMD requirements and restrictions.

Chapter 3

• Identify how the passive loss rules limit the ability to take deductions, what transactions free disallowed losses, how suspended losses are carried forward, and when real estate professionals can escape the passive lost rules.
• Specify differences between the regular and alternative minimum tax recognizing the impact of tax preferences and adjustments.
• Identify the reporting requirements for employers, real estate transactions, independent contractors, and cash reporting.
• Recognize types of accuracy-related and valuation overstatement penalties, and specify the IRS’s applicable statute of limitations.

Chapter 4

• Specify the advantages and disadvantages of sole proprietorships including self-employed taxes and payment requirements, recognize how partnerships divide tax attributes, and identify partnership taxation, particularly the application of the at-risk rules (§465).
• Recognize the definition of a corporation and its taxation including the application of the “check the box” regulations and passive loss limitations.

Chapter 5

• Identify the transfer of money, property, or both by prospective shareholders and the basic requirements associated with §351, determine the differences between start-up and organizational expenses, specify the treatment of capital gains and losses, and recall dividends received treatment.
• Specify the requirements for corporate charitable contributions, determine how to avoid § 541 and §531 status and identify accounting periods and methods available to corporations.
• Specify methods for identifying inventory items and identify multiple corporation tax advantages including consolidated returns.

Chapter 6

• Determine payroll taxes and the uses of Form W-2 and identify major employee labor laws.
• Recognize common-law rules used to determine employee status for federal income tax purposes, specify the dangers of unreasonable compensation stating how to avoid them, and identify income-splitting devices.
• Identify a buy-sell agreement distinguishing an entity purchase from a cross-purchase agreement and recognize business recapitalizations and their potential uses.

Chapter 7

• Identify basic fringe benefit planning by determining “income” under §61 and specifying the income exclusion for statutory fringe benefits.
• Recognize the income exclusion provided for §132 de minimis fringe benefits, §79 group term life insurance, §125 “cafeteria plans”, and§105 self-insured medical reimbursement plans and specify employer-provided automobiles valuation methods, and determine  ERISA compliance requirements.

Chapter 8

• Define disallowed “entertainment” and recognize remaining statutory exceptions for entertainment, determine the application of the percentage reduction rule, and define an “entertainment facility” stating related deductible costs.
• Identify substantiation, recordkeeping, reimbursement, and reporting requirements.

Chapter 9

• Recognize the importance and variety of business insurance by identifying business insurance types such as §79 group term, retired lives reserve and split-dollar life insurance.
• Identify the impact of the disallowance of the interest deduction on purchasers and the insurance industry recognizing the §264 interest limitation on policy loans, cite the requirements of COBRA, and determine what constitutes a Voluntary Employee Benefit Association under §501(c)(9).

Chapter 10

• Recognize the postponement of income with a nonqualified plan by specifying the IRS’s position on such arrangements recognizing the impact of ERISA and constructive receipt.
• Identify the tax consequences of establishing a nonqualified plan and rules for the preparation of related income tax returns.

Chapter 11

• Determine the advantages and the disadvantages of an S corporation, identify variables that impact whether a business can choose S corporation status, and cite ways an S corporation may be terminated specifying related procedures.
• Recognize the taxation of S corporations as compared to other entities including pass-through items, built-in gain, and fringe benefits, and specify when the Form 1120S must be filed.

Chapter 12

• Recognize various business disposition and reorganization possibilities by specifying recognizing the types of transactions that qualify as non-taxable reorganizations and identifying the factors that determine the corporate tax attributes of an acquired corporation that carry over to the acquiring or successor corporation.