Making the Best of Bad Situations 2022

Overview

Learn how to apply, implement and evaluate the strategic tax aspects of marital and financial setbacks. This course will examine property transfers, asset divisions, alimony, filing status, exemptions and child support. We’ll also discuss the cancellation of indebtedness income inclusion rules in 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.

Highlights

• Marital tax liability • Transfers incident to divorce • Alimony and child support • Debt cancellation and income inclusion rule • Reduction of tax benefits • Foreclosure • Repossession of personal property • Repossession of real property • Non-business bad debts • Business bad debts

Objectives

• Recognize tax considerations and tax guidance for marital breakdowns and identify marital status specifying its effect on filing status and federal income tax obligations. • 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. • 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, the amount realized on the sale, or other distribution of property in foreclosure, and basis calculation on repossession of property. • Identify nonbusiness and business bad debts under 166, determining their differences in Code requirements and the amount allowed.