Tax Aspects of Marital and Financial Setbacks: Making the Best of Bad Situations
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.
Course Information
Course No. M370
Format: Online pdf (67 pages). Printed book available.
Instructional Delivery Method: QAS Self-Study
Prerequisites: General understanding of federal income taxation.
Advance Preparation: None
Level: Overview
CPE Credit: 2 hrs.
Field of Study: Taxes: Technical
Course expiration: You have one year from date of purchase to complete the course.
Course Revision Date: March 2024
Objectives
Course Topics:
* Marital tax liability
* Transfers incident to divorce
* Alimony & child support
* Debt cancellation & income inclusion rule
* Reduction of tax benefits
* Foreclosure
* Repossession of personal property
* Repossession of real property
* Non-business bad debts
* Business bad debts
Learning Objectives:
After reading the materials, participants will be able to:
1. Recognize tax considerations and tax guidance for marital breakdowns and, identify marital status specifying 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 specifying 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 determining their differences in Code requirements and amount allowed.
