Comprehensive Family Tax Planning

As a result of studying each assignment, you should be able to meet the objectives listed be-low each assignment. ASSIGNMENT SUBJECT Chapter 1 Basic Marital Tax Matters At the start of Chapter 1, participants should identify the following topics for study: * Marital status * Joint return * Separate returns * Head of household * Exemptions * Divorce costs * Withholding & estimated tax * Community property states * Ending the community * Living together Learning Objectives After reading Chapter 1, participants will be able to: 1. Determine how filing status affects taxpayers’ filing requirements, standard de-ductions, and correct tax by identifying the requirements of filing a joint return or as head of household and how to avoid being penalized 2. Recognize the continuing importance and requirement of dependency and “qual-ified child” status for purposes of head of household filing status and joint custo-dy. 3. Determine deductible and nondeductible divorce expenditures, specify the ef-fects of making separate estimated tax payments or joint declarations of estimated tax, and identify the effects of marital agreements and community income. 4. State the effect of living together on filing statuses and dependency citing dif-ferences with the married tax rate and other tax rates and cite the argument for at-tributable income. After studying the materials in Chapter 1, answer exam questions 1 to 10. ASSIGNMENT SUBJECT Chapter 2 Children At the start of Chapter 2, participants should identify the following topics for study: * Child tax credit * Income earned by children * Unearned income of children under 18 * Adoption credit * Child or dependent care credit * Qualifying person * Keeping up a home * Employment-related expenses * Allowable amount & reporting * Dependent care assistance Learning Objectives After reading Chapter 2, participants will be able to: 1. Identify the tax treatment of earned and unearned income for children, especial-ly child expenses and investment income. 2. Recognize the tests for the §21 dependent care credit and identify qualifications for §129 dependent care assistance. After studying the materials in Chapter 2, answer exam questions 11 to 14. ASSIGNMENT SUBJECT Chapter 3 Education At the start of Chapter 3, participants should identify the following topics for study: * Work-related educational expenses * Educational expense credits * Education savings accounts * Deduction for student loan interest * Qualified tuition programs * Higher education expense deduction * IRA withdrawals for education expenses * Scholarships & fellowships * Educational savings bonds * Educational incentives & financial aid Learning Objectives After reading Chapter 3, participants will be able to: 1. Determine the differences between qualifying §162 deductible and nonqualify-ing education and specify education expense credits under §25A listing covered costs and fees. 2. Identify the benefits and requirements of §530 education savings accounts and specify the deductible portion of student loan interest payments. 3. Cite the tax and savings benefits of §529 of qualified tuition programs, §117 tax-free scholarship payments, and §135 educational savings bonds. 4. Identify educational incentives and financial aid available to students and par-ents. After studying the materials in Chapter 3, answer exam questions 15 to 23. ASSIGNMENT SUBJECT Chapter 4 Medical, Charitable & Casualty At the start of Chapter 4, participants should identify the following topics for study: * Medical costs * Medical deductions * Health savings accounts * Accelerated death benefits * Charitable contributions of cash * Charitable contributions of property * Substantiation * Casualty & theft losses * Deductible & nondeductible losses * Disaster area losses Learning Objectives After reading Chapter 4, participants will be able to: 1. Identify deductible§213 medical costs for spouses and dependents listing de-pendency requirements; determine the deductibility costs for meals and lodging and specify the benefits and qualifications of HSAs. 2. Specify variables that impact the deductibility of §170 charitable contributions identifying limitations and substantiation requirements. 3. Determine what constitutes casualty and theft, and specify between business and personal casualties under §165. After studying the materials in Chapter 4, answer exam questions 24 to 32. ASSIGNMENT SUBJECT Chapter 5 Home Sales & Moving Expenses At the start of Chapter 5, participants should identify the following topics for study: * Capital gains rates * Rate groups * AMT * Home sales under §121 * Special rules for ownership & use requirements * Prorata exception * 1099-S reporting * Distance & time tests for moving expenses * Deductible moving expenses * Reporting moving expenses Learning Objectives After reading Chapter 5, participants will be able to: 1. Recognize the relationship between home sales and capital gains rates. 2. Determine the key elements of the §121 home sale exclusion and its application, and specify the safe harbor proration provisions associated with the home sale ex-clusion. 3. Identify the exception to §217 moving expense disallowance and its require-ments. After studying the materials in Chapter 5, answer the exam questions 33 to 38. ASSIGNMENT SUBJECT Chapter 6 Home Mortgage Interest At the start of Chapter 6, participants should identify the following topics for study: * Secured debt * Qualified home * Special situations * Points * Mortgage interest statement – Form 1098 * Special rule for cooperative housing * Home acquisition debt * Home equity debt * Mixed-use mortgages * Grandfathered debt Learning Objectives After reading Chapter 6, participants will be able to: 1. Identify categories of mortgages and characteristics of secured debt that influ-ence the deductibility of interest and specify special situations that affect qualified home mortgage interest. 2. Recognize the general rule for the tax treatment of points specifying exceptions and identify when a taxpayer will receive a Mortgage Interest Statement – Form 1098. 3. Differentiate home mortgage interest from personal debt and determine what is qualified grandfather debt. After studying the materials in Chapter 6, answer exam questions 39 to 44. ASSIGNMENT SUBJECT Chapter 7 Transfers Incident to Divorce At the start of Chapter 7, participants should identify the following topics for study: * Property rights * Premarital agreements * Application of §1031 * Incident to divorce * Property basis * Purchases of residence between spouses * Purchases of business interests between spouses * Selected asset divisions of residence & business interests * Real & personal property * Pension benefits Learning Objectives After reading Chapter 7, participants will be able to: 1. Identify forms of marital property stating their likely division in marital property settlements and recognize the benefits of marital agreements in avoiding potential divorce problems. 2. Determine the requirements of §1041 stating how it changed the result of U.S. v. Davis regarding interspousal transfers; specify the factors that influence whether a property transfer is “incident to divorce”; and identify the tax treatment of trans-ferring property subject to a debt. 3. Specify the dangers of interspousal purchases including deferred tax liability, determine the effects of purchasing an interest in real property held for investment, and identify related party issues on later sale. 4. Determine the tax consequences of selected asset divisions incident to divorce. After studying the materials in Chapter 7, answer the exam questions 45 to 58. ASSIGNMENT SUBJECT Chapter 8 Alimony & Child Support At the start of Chapter 8, participants should identify the following topics for study: * Divorce or separation instrument * Alimony requirements of instruments executed after 1984 * Alimony requirements of instruments executed before 1984 * Deducting alimony paid & reporting alimony received * Recapture of alimony for type A & B agreements * Alimony substitution trusts & annuities * Alimony paid by an estate * Child support * COBRA coverage * Qualified medical child support orders Learning Objectives After reading Chapter 8, participants will be able to: 1. Determine the tax treatment of “alimony” based on the date of the divorce de-cree. 2. Specify the types of §71 “divorce or separation instruments” for existing pre-2019 documents, how having an invalid or corrected decree impacts such an in-strument, and what can qualify as a payment or be designated not alimony. 3. Define the continuing informational reporting of alimony for pre-2019 decrees based and the collateral effects of the TCJA changes 4. Specify the tax treatment of child support recognizing events that determine whether a contingency is clearly child-related and identify qualified medical child support orders to make the most of health care coverage plans. After studying the materials in Chapter 8, answer the exam questions 59 to 68. ASSIGNMENT SUBJECT Chapter 9 Financial Tax Planning At the start of Chapter 9, 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 9, participants will be able to: 1. Identify financial goals and investment purposes and recognize the importance and relationship of money management and wealth building. 2. Determine the tax consequences of title holding methods specifying ways to hold title to assets and citing the tax benefits and drawbacks of corporations, qual-ified retirement plans, and trusts. 3. Recognize the income needed at retirement and identify the purpose of savings listing strategies to save. After studying the materials in Chapter 9, answer the exam questions 69 to 75. ASSIGNMENT SUBJECT Chapter 10 Building an Estate At the start of Chapter 10, 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 & investment economics * Leverage Learning Objectives After reading Chapter 10, participants will be able to: 1. Identify the goals of money management listing types of income in order to pre-serve cash more effectively. 2. Determine how to budget income into cash and convert income into assets by purchasing investments. 3. Recognize tax-advantaged investments and determine the economic impact of accelerating deductions and postponing tax liability. After studying the materials in Chapter 10, answer exam questions 76 to 82. ASSIGNMENT SUBJECT Chapter 11 Income Splitting At the start of Chapter 11, 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 11, participants will be able to: 1. Determine how splitting income among a family group minimizes overall taxes using major income-splitting formats, and recognize the use of an unincorporated business to obtain deductible business expenses. 2. Identify the benefits and requirements of using a C or an S corporation specify-ing the taxation of these entities including their ability to split income, and deter-mine §704(e) family partnership savings. 3. Recognize a custodianship's ability to split income with minors and identify the use of §135 educational bonds. After studying the materials in Chapter 11, answer the exam questions 83 to 88. ASSIGNMENT SUBJECT Chapter 12 Retirement Plans At the start of Chapter 12, participants should identify the following topics for study: * Qualified deferred compensation * Basic requirements of a qualified pension plan * Basic types of corporate plans * Types of defined contribution plans * Self-employed plans – Keogh * Distribution & settlement options of IRAs * Tax-free rollovers for IRAs * Roth IRAs * Simplified employee pension plans (SEPs) * SIMPLE Plans Learning Objectives After reading Chapter 12, participants will be able to: 1. Determine the compensation base for nonqualified and qualified deferred plans and recognize the protections given by PBGC insurance. 2. Identify the requirements of basic forms of qualified pension plans and their contribution and benefit limits. 3. Determine the requirements of defined contribution and defined benefit retire-ment plans, specify the impact of requiring employee contributions; and state the requirements for plan terminations. 4. Identify Keogh plans for self-employed persons and the impact of controlled businesses. 5. Specify the requirements of IRAs, SEPs, and SIMPLEs, and tax-free Roth IRAs. After studying the materials in Chapter 12, answer the exam questions 89 to 102. ASSIGNMENT SUBJECT Chapter 13 Distributions from Retirement Plans & IRAs At the start of Chapter 13, participants should identify the following topics for study: * Prior law for annuity payments * Mandatory basis rule for annuity payments * Nonqualifying lump-sum distributions * Treatment options for lump-sum distributions * Eligible rollover distributions * 20% withholding * Rollover period * Premature distributions * Minimum distribution rules * Making charitable gifts with plan balances Learning Objectives After reading Chapter 13, participants will be able to: 1. Identify popular ways to receive distributions from a retirement plan or an IRA, specify types of annuities and their effect on how and when participants receive payments, and cite the special tax treatment given NUA. 2. Cite the key components of rollovers that can be used to reinvest cash or other assets without including the amount in income. 3. Specify the tax consequences of taking premature distributions assisting clients in avoiding the 10% penalty and recognize charitable distributions from plans. After studying the materials in Chapter 13, answer the exam questions 103 to 108. ASSIGNMENT SUBJECT Chapter 14 Elderly & Disabled Planning At the start of Chapter 14, 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 * Supplemental security income * Income & assets * Disability benefits Learning Objectives After reading Chapter 14, participants will be able to: 1. Identify ways to manage an incompetent person’s estate specifying their uses and benefits. 2. Recognize the basic eldercare benefits of Medicare and the possible use of a Medicaid trust and specify how to obtain disability benefits coverage. After studying the materials in Chapter 14, answer the exam questions 109 to 112. ASSIGNMENT SUBJECT Chapter 15 Wills & Probate At the start of Chapter 15, participants should identify the following topics for study: * Provisions of wills * Requirements of wills * Executors and guardians * Types of wills * Title implications * Changes to a will * Advantages of a will * Simple will * Probate pros and cons * Probate avoidance Learning Objectives After reading Chapter 15, participants will be able to: 1. Specify types of wills citing their basic provisions and recall ways to hold title and their income and estate tax ramifications. 2. Identify the advantages of a properly drafted will, determine the distribution flow of simple wills, and specify the pros and cons of probate proceedings. After studying the materials in Chapter 15, answer exam questions 113 to 116. ASSIGNMENT SUBJECT Chapter 16 Estate Planning At the start of Chapter 16, participants should identify the following topics for study: * Unlimited marital deduction * Applicable exclusion amount * Stepped-up basis * Basic estate planning goals * Simple will * Types of trusts * Charitable trusts * Insurance trusts * Family documents * Private annuities Learning Objectives After reading Chapter 16, participants will be able to: 1. Recognize the applicable exclusion amounts for various years of death and spec-ify what constitutes “stepped-up basis” for estate tax purposes. 2. Identify the benefits and drawbacks of the primary dispositive plans, specify the various types of estate trusts and recall the former advantages and disadvantages of the private annuity.