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Making the Best of Bad Situations - Mini CourseCode: 24-MAKBBS2
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Course description and objectives:
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.
After reading the materials, participants will be able to:
1. List tax considerations and apply tax guidance to marital breakdowns, identify marital status, and describe the effect marital status has on filing status and federal income tax obligations.
2. Contrast and compare the state marital property provisions, explain §1041 identifying at least two tax traps for the unaware, and list seven variables that determine whether a payment is alimony.
3. Identify the exceptions to the general income inclusion rule and explain tax impact, and point out 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. Contrast nonbusiness and business bad debts under §166 explaining differences in Code requirements and amount allowed
Presentation Method: Self-Study
CPE credit: 2 Hours
Program Level: Update
Advance Preparation: None
Exam expiration date: Participants must submit exams for grading within one year from the date of purchase