Engler Sp07-Itai's Income Tax Outline

Engler Sp07-Itai's Income Tax Outline - Analyze Horizontal...

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=FED TAX OUTLINE 1. Sources of Federal Taxation a. Criteria for evaluating these possibilities 2. Cash Accounting vs. Accrual Accounting 3. Salary vs. Capital Gains a. Calculating Capital Gains Characteristics of Income 1. Definitions 2. NonCash Benefits/Meals and Lodging/Valuation - §61; 119 a. Benaglia §119 exception 3. Other Fringe Benefits/Economic Effects - §132(a-e, h, j1); 4. Imputed Income 5. Windfalls and Gifts - §§102(b-c); 274b; 1012; 1015a 6. Life Insurance - §§101a; 165d 7. Gains and Losses from Gambling - §101a; 165d 8. Basis Recovery a. Easements b. Annuities - §72a,b(102,q1&2(A)(D) 9. Recovery of Loss, Annual Accounting - §165c3, 172a a. AA Consequences and Mitigation 10. Claims of Right/Tax Benefit - §1341; 111a 11. Personal and Business Injuries Recovery - §104a 12. Transactions involving Loans - §61a(12); 108(a) a. Income from Discharge of Indebtedness 13. Transactions involving Loans--Transfer of property - 10001b; 14. Illegal Income 15. State and Local Bonds - §103a-c; 265a2 Problems of Timing 1. Gain on Sale of Home - §121a-b 2. Gains and Losses—Origins and Non-recourse Borrowing - §§305a,b; 1001a; 61a7; R1-61-6a a. Distribution of Stock/Stock Rights 3. Losses/ Like-Kind Exchanges- §§1001a,b; 165, R1.1001-1a 4. Boot and Basis 5. Original Issue Discount 6. Open Transactions, Installments Sales& Deferred Sales 7. Constructive Receipt and Related Retirement Benefits a. Economic Benefit Theory – Beyond CR 8. Retirement Benefits/Deferred Compensation a. Substantiality Requirement 9. Qualified Plans 10. Stock Options 11. Marriage/Divorce 12. Alimony, Child support, and Property Settlements 13. Cash Receipts and Payments of Accrual Method 14. Corporate Transactions Personal Deductions, Exemptions, and Credits 1. Generally o Standard Deduction/Earned Income Tax Credit 2. Casualty Losses 3. Medical Expenses 4. Charitable Contributions 5. Interest/Taxes 1 1 1 2 2 2 2-3 3 3 4-5 5 5-6 7 7 7-8 8-9 9 9-10 10-11 11-12 12 12 13 14 15 15 15 16 17 18 18 19-21 21 21-22 22 22 23-24 25-26 26 27 28 29 29 30 31 32 33 34 Allowances for Mixed Business and Personal Outlays 1. Business Deduction Abuse a. Ord/Nec. - §162 b. Above the Line - §212 c. No Deduction for NProfit/Personal - §183 d. 2% AGI Threshold e. Primary Purpose Test f. Home Offices/Vacation H. 2. Travel & Entertainment Expense §274 3. Commuting §162 4. Child Care 5. Clothing 6. Legal Expenses 7. Education Deductions for the Costs of Earning Income 1. Current Expenses versus Capital Expenditures - §263 2. Repairs and Maintenance – R162-4 a. Primary Purpose Test 3. Goodwill a. Advertising vs. Goodwill 4. Inventory Accounting - §471-472 5. Ordinary and Necessary Expenses a. Origin of the Claim b. Ordinary AND Necessary c. Public Policy Considerations 6. Depreciation a. Straight Line Method b. Accelerated Depreciation 7. Tax Shelters a. Real Estate Tax Shelters b. Financial Tax Shelter c. Tax System Protection 8. Sale and Leaseback Transactions a. Sham Lease Arrangement b. Other Anti-Sham measures 9. Alternative Minimum Tax The Splitting (shifting) of Income 1. Service Income: Diversion by Operation of Law vs. by Contract a.
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