Matching Investments to Tax Savings Techniques
Field of Study:
Taxes aren't taxes – they are dollars in terms of the net return on investment. All tax professionals need to know the
tax-economics of investing for themselves and their clients. This need is accentuated by the rapid rise of the Internet
as a broad-based and effective investment tool.
The tax professional is in a special position to detect a client's need for financial planning. Preparing returns discloses
assets, savings, business entities, and family members. Knowledge of the client's assets, activities and the tax characteristics
of available entities permits investment matching for maximum after-tax return. The basic tax characteristics of the primary
tax entities are explored and analyzed. Their ability to defer, reduce, and eliminate tax is examined. Client goals, purposes
and risk tolerances are determined and quantitated using the Sharp ratio. Investments and assets are then evaluated using a
variety of tools found on the Internet. Finally, investments and entities are matched to produce the best after-tax return for the client.
After completing this course you will be able to:
- Identify Internet advantages including depth and volume of available financial information and specify steps in the mapping process to prepare for financial independence.
- Recognize investment planning goals and purposes, select retirement planning direction, and identify resource allocation including necessary generational changes.
- Determine the development and implementation of a financial plan for retirement.
- Identify active and two passive investment acquisition strategies.
- Identify tax and legal title formats noting the distinctions among these entity formats.
- Cite the S corporation requirements noting tax advantages and dis-advantages particularly whose associated with incorporating a farm.
- Specify the title holding benefits of trusts, co-tenancy, partnerships, and limited liability companies and the tax characteristics of each.
- Identify the types of retirement plans used to provide lifetime benefits to a business owner and to employees, determine how title can be held on behalf of minors and the tax treatment of custodianships, and specify the tax treatment of a probate estate.
- Identify the benefits of tax deferral, the use of tax deferral under old §1034, and the tax deferral advantages under §1031 noting its basic el-ements.
- Cite the related party §1031 restrictions noting prohibited parties or entities and permissible disposition exceptions, identify protections for exchange participants, and determine the history of the personal and multiple property regulations including the unique personal property like-kind and netting requirements for multiple asset exchanges.
- Recall the evolution of §1031 delayed exchanges noting allowable transfers, determine how to select replacement property within statu-tory deadlines, specify constructive receipt safe harbors, recognize methods to secure exchange party performance, and identify the §1031 partnership underlying asset rule. Recognize how to design retirement plans following basic steps, identify the most popular methods for providing for retirement, and specify near retirement investments.
- Determine the requirements for an installment sale and how to elect out of the installment method, specify variables affecting §453 availa-bility, and recognize the use a property option to receive income and postpone tax.
- Identify tax saving credits noting qualified computational expenses and their limitations and restrictions.
- Recognize the estimated tax rules and procedures including payment deadlines and underpayment penalties noting the economics of overpaying estimated taxes, and specify the types of interest that are nondeductible including personal interest under §163(h)(1).
- Determine the deductibility of investment interest, prepaid interest, points, and prepayment penalties noting the offset of passive income with rental property mortgage interest.
- Identify business vehicle operating costs using (or switching between) the actual cost method or the standard mileage rate and allocating expenses based on §162 usage, cite the importance of retaining substantiatable expense and mileage records, and specify depreciation traps when purchasing a vehicle.
- Determine the requirements for business expenses to meet the directly related test, specify the elements of the associated test, and identify the business expense statutory exceptions and the application of R.R. 90-23 and R.R. 99-7 to the deduction of transportation costs to a tem-porary work location.
- Recognize business asset depreciation using both ACRS and MACRS recovery classes, identify sources of §172 net operating losses (NOLs) noting carryback and carryover rules, cite several tax breaks for nonitemizing taxpayers, determine the advisability of filing an amended return, specify how to avoid audits by claiming refunds for provable items, and identify which return amendments are safest.
- Specify formats for income splitting, recognize the tax treatment of employee and self-employed business expenses particularly home-office expenses noting the two non-exclusive use exceptions and the in-come limitation, identify changes made to home office deduction un-der TRA ’97, and recognize the ability of self-employeds to make an-nual deductible contributions to a Keogh plan.
- Determine the tax opportunities available to an unincorporated business by specifically recognizing retirement plans, the hiring of fam-ily members, travel expenses, casualty losses, bad debts, and self-employment tax.
- Identify the uses and tax characteristics of regular and S corporations.
- Recognize the use of partnerships to split income among partners specifically including the use of §704(e) family partnerships and the consequences of gifting a partnership interest to a child or to another family member.
- Identify the use of a custodianship to split income and contain the “kiddie tax” noting initial planning considerations and examples of good investments for children, determine deductions and credits for childcare, education, children, and §7872 loans, and specify the income and later estate tax benefits of gifts.
- Identify tax elimination techniques.
- Recognize employer deductions as a means to increase tax-free in-centive-based compensation for employees.
- Determine how to value fringe benefits according to IRS regulations, identify how to comply with ERISA requirements, properly report reimbursed and unreimbursed business expenses under accountable and nonaccountable plans, recognize substantiation of auto expenses using a fixed and variable rate, and specify eligible retirement benefits exempt from social security taxes.
General understanding of federal income taxation.
Type of Delivery Method:
Recommended CPE Credits:
Final examination expiration date:
The program participant will have one year from the date of purchase to complete the course and the final examination.
Refunds and Cancellations:
A full refund will be given if the customer submits a request by email within 15 days of purchasing the course by using the "Contact Us" link on the left side of the web page. We will appreciate if the customer provides a reason. However, no refund will be granted after the qualified assessment (Final Test) has been completed. Customers can submit their complaints or concerns by using the "Contact Us" link.
Web CPE is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org