Course Information

This presentation integrates federal taxation with overall financial planning. The course will explore tax strategies relating to the central financial tactics of wealth building, capital preservation, and estate distribution. The result is a unified explanation of tax economics that will permit the tax professional to locate, analyze, and solve financial concerns. Designed to improve the quality of services to clients and the profitability of engagements, this program projects the accountant into the world of financial planning. This course will give the participant practice in analyzing problems, developing solutions, and presenting final personal financial plans to clients.

The course surveys wills, living trusts, gifts, marital property, and probate avoidance. Will and trust forms are explored along with living wills, durable powers of attorney, and nominations of conservator. Designed to eliminate estate problems and death taxes, the emphasis is on practical solutions that are cost effective.

• Differentiate short-term financial goals and investment purposes.
• Specifying ways to hold title to assets starting with the simplest and most direct way to hold property and citing the tax benefits and drawbacks of co-tenancies, corporations (both C & S), partnerships, qualified retirement plans, and trusts
• Recognize the importance of early retirement planning using a balance sheet method, identify cost and income needs specifying the purpose of savings.
• Identify money management specifying income types, recognize causes of increased taxable income for itemizing taxpayers, and specify taxable income types and their proper reporting.
• Determine the distinctions between tax-free and tax deferred income, and identify tax-deferred investments.
• Specify ways to shelter income stating how income sheltering amplifies investment return.
• Recognize the budgeting of income into cash by containing expenditures and developing discretionary income and determine how to convert income into assets by purchasing investments
• Specify tax-advantaged investments citing management rules and determine the economic impact of accelerating deductions.
• Identify the barriers to wealth preservation stating how to design a budget to increase discretionary income and determine net worth using a balance sheet.
• Specify why individuals should take primary responsibility for investment planning and recognize basis planning tactics.
• Identify the benefits of tax deferral and recall the tax deferral advantage under §1031 listing its elements.
• Specify the related party §1031 restrictions identifying prohibited parties or entities and disallowance of personal property exchanges.
• Recognize the use of an intermediary and the disallowance of personal property exchanges, identify retirement plan design, and list popular methods for providing for retirement.
• Specify the requirements for an installment sale, determine how to elect out of the installment method, and determine how to use a property option to receive income and postpone tax.
• Identify tax credits specifying qualified computational expenses, limitations, and
• Recognize the types of deductible and nondeductible interest types including the deductibility of investment interest, prepaid interest, points, and prepayment penalties.
• Identify business vehicle operating costs using (or switching between) the actual cost method or the standard mileage rate.
• Recall the statutory exceptions to the disallowance of entertainment deductions and recognize the application of R.R. 90-23 and R.R. 99-7 to the deduction of transportation costs to a temporary work location.
• Determine the requirements of business asset expensing under §179 and identify sources of §172 net operating losses (NOLs) recognizing carryback and carryover rules.
• Recognize formats for income splitting, determine the restricted tax treatment of employee business expenses, and cite changes made to home office deduction under TRA ’97.
• Identify the tax treatment of personal and business casualty losses and bad debts.
• Determine the uses and tax characteristics of regular and S corporations by recognizing the taxation of these entities including their ability to split income.
• Recognize the use of partnerships to split income among partners and reduce estate taxes.
• Identify the use of custodianship to split income specifying “kiddie” tax considerations and recognize good investments for children including bonds.
• Recognize the requirements of the current §121 home sale exclusion citing its differences with prior tax law and specify the tax elimination aspects of interfamily transactions such as divorce and gifts.
• Recognize employer deductions as a means to increase tax-free incentive-based compensation for employees using fringe benefits under §132 and employer-paid accident & health coverage.
• Identify how to comply with ERISA plan requirements, and specify the proper reporting of reimbursed and unreimbursed business expenses under accountable and nonaccountable plans.
• Identify the goals and purposes of asset protection recognizing the objections some people have about shielding assets from creditors citing situations that can unexpectedly put assets and financial security at stake and basic protection concepts.
• Recognize the importance of creditor types associated with asset protection and fraudulent transfers.
• Specify fraudulent transfer laws listing badges of fraud, and define statutes of limitation, criminal penalties, and permissible asset transfers.
• Recognize the degree and necessity of an asset protection plan using net worth and asset values on a balance sheet.
• Identify the ways that insurance and buy-sell agreements can offer asset protection citing the asset protection elements of homeowner’s, automobile, and disability insurance.
• Recognize the asset protection advantages and disadvantages of ownership formats and entities determining the use of individual ownership and corporate and identifying testamentary trusts, living trusts, and subcategories of trusts.
• Identify the requirements for an enforceable marital agreement, and determine what constitutes post-nuptial and premarital agreements stating how they relate to divorce settlements and divisions.
• Identify basic estate planning elements recognizing the importance of well-drafted legal documents and specify the key team participants.
• Specify estate planning tools that save death taxes while retaining maximum control including family partnerships, exclusions, and valuations.
• Identify potential death taxes including federal estate tax as it applies to various size estates, and specify those subject to federal estate tax.
• Determine what constitutes a taxable estate under §2501 specifying what assets are included in a gross estate using basic categories of property and transfers.
• Specify estate deductions allowed under federal estate tax law stating their tax advantages and disadvantages.
• Determine the value of a decedent’s assets using permitted elections, recognize the use of Form 706 to pay any estate tax due, and select the tax basis of estate assets.
• Recall the advantages of gift planning including estate reduction recognizing the impact of the GST, specify the steps to compute gift tax identifying the gift tax exclusion amount, and determine the value of gifts including those that are split.
• Identify the various gift tax exclusions, including the annual, medical expense, and tuition exclusions.
• Specify types of wills citing the functions a will can perform, and identify the ways holding title can affect the use of a will.
• Identify the pros and cons of probate proceedings and the dangers of ancillary probate and intestate succession.
• Identify the relationship of parties in a trust, reasons to establish a trust, and types of trusts specifying their common elements and estate planning function.
• Specify recommended living trust provisions and identify the application of gift and income tax including the use of a grantor-retained income trust.
• Recognize basic tax and legal title formats identifying the advantages and disadvantages of holding property in a sole proprietorship, a corporation, or an S
• Identify the title holding benefits of trusts, co-tenancy, partnerships, and limited liability companies and the tax characteristics of each and recognize the types of retirement plans used to provide lifetime benefits to a business owner and to employees.
• Specify persons in which rights are placed by life insurance and reasons to purchase life insurance.
• Identify the income, estate, and gift tax treatment of life insurance proceeds by:
  • Select variables that influence whether life insurance is taxable for federal estate tax purposes; and
  • Recalling the gift tax associated with the transfer of life insurance policies.
• Determine the pros and cons of life insurance policy types and specify estate tax planning reasons for establishing an irrevocable life insurance trust.
• Recognize the differences between deferred annuities and private annuities and determine what constitutes an entity purchase agreement and a cross-purchase agreement and their tax and legal advantages.
• Identify reasons why a business interest must be valued in an estate that is subject to federal estate tax, specify factors used to determine the net value of a business under the regulations and recall the valuation factors in R.R. 59-60 specifying their impact.
• Determine how tangible assets are normally valued identifying those assets whose valuation is based on values other than book value, and specify the steps in R.R. 68-609’s valuation formula for intangible assets.
• Identify special business valuation issues including redemptions under §303 by determining the value of a minority stock interest and fractional interests in order to obtain applicable valuation discounts and considering a buy-sell agreement.
• Determine the tax treatment of a §302 corporate redemption and what exceptions exist to avoid dividend treatment.
• Determine the benefits of an estate freeze and its ability to reduce the value of a business interest, identify transactions to which Chapter 14 rules apply and the terminology used in Chapter 14.
• Identify the “zero value” rule under §2701 by recalling the special lowest valuation rule and the limit this can have on increasing one’s estate.
• Determine the application of 2701 provisions by identifying when an individual is deemed the owner of an interest based on the §2701 attribution rules and specifying when transfer tax adjustments will be made to transfers.
• Recall the terms used in §2702 concerning transfers of interests in trust, identify the application of the zero value rule to a transfer of an interest in trust, and specify exceptions to §2702.
• Determine the effect of options and liquidation rights on §2703 to ensure property is valued appropriately.
• Recall estate management techniques for the elderly and disabled by identifying joint tenancy and the benefits and drawbacks of using such a method for asset management; specifying levels of conservatorship that can influence management and protection of an estate and/or personal care and disadvantages of this tool; and determining what constitutes a durable power.
• Cite the eldercare benefits of Medicare, Medicaid, and Supplemental Security Income and identify the benefits of private insurance for catastrophic illness.
• Identify Medicaid specifying how it relates to elderly health care decisions and specify the requirements that must be met in order to receive disability benefits.
• Determine post-mortem estate planning action in the face of funeral and administrative expenses using elections and disclaimers.
• Cite the due dates of post-mortem federal forms, specify the filing requirements of a decedent’s estate tax return, and identify exceptions to the general rule of estate tax payment.
• Determine the processes and procedures necessary in the preparation and filing of Form
• Identify the filing requirements for estate income tax and decedent’s final income tax returns by determining the estate income tax under available tax accounting methods and tax years; and
• Determine the total income to be included on the decedent’s final income tax return using available exemptions or deductions.
• Identify how to avoid penalties when filing a gift tax return for the decedent and when gifts are deemed completed.