Table of Contents

Chapter 1 - Selected Legal Issues with Tax Analysis - Section 1. 5

ASSET PROTECTION.. 5

Why Asset Protection?. 5

Types of Liability. 5

Basic Protection Concepts. 6

Types of Creditors. 6

Evading Creditors. 6

Fraudulent Transfers. 7

Statute of Limitations. 7

Permissible Asset Transfers. 7

Insurance. 8

Buy-Sell Agreements. 8

Definition. 8

Divorce. 9

Premarital Agreements. 9

Post-Nuptial Agreements. 9

COBRA Coverage. 10

Coverage Termination. 10

Notice. 10

Election. 10

Choice of Coverage. 11

Cost 11

Deductibles. 11

American Recovery & Reinvestment Act 11

Bankruptcy. 12

Federal Bankruptcy. 12

Bankruptcy Types. 12

Chapter 7 - Liquidation. 12

Chapter 11- Reorganization. 12

Chapter 13 - Wage-Earner Plan. 13

Automatic Stay. 13

Preferences. 13

Priorities. 13

Super Priority Claims. 13

Secured Claims. 14

Priority Claims. 14

Divorce Settlements & Divisions. 16

Divorce Settlements - The Tax Trap. 16

Section 1041. 16

Property vs. Income. 16

Incident to Divorce. 16

Related To Termination. 17

Property Basis. 17

Purchases between Spouses. 17

Residence. 17

Employment 18

The Employment Relationship. 18

Employee v. Independent Contractor 18

Common Law Rules Used by IRS. 19

Factors. 19

Statutory Employees. 21

Real Estate Agents. 21

Reporting Requirements. 21

Penalties. 21

Section 530 Relief. 21

Chapter 1 - Section 1 Review Questions. 23

Chapter 1 - Selected Legal Issues with Tax Analysis - Section 2. 25

Unemployment Compensation. 25

Federal Unemployment (FUTA) Tax - '3301 & '3306. 25

Unemployment Compensation. 25

Workers Compensation. 25

Tax Exemption. 26

Unreasonable Compensation. 26

Overall Limitation. 26

Factors. 26

Employees Qualifications. 26

Size of the Business. 26

Employees Compensation History. 27

Unreasonably Low Salaries. 27

Services Performed by the Employee. 27

Past Service. 27

Reasonable Dividends. 27

Bonuses as Constituting Dividends. 27

Payback Agreements. 28

Miscellaneous Factors. 28

Social Security. 29

How Social Security Works. 29

Social Security Participants. 29

Social Security Benefits. 30

Retirement Benefits. 30

Qualification. 30

Calculation. 30

Personalized Benefit Estimate. 30

Social Securitys Payroll Tax or FICA - '3111 & '3121. 30

Rates. 31

Tax after Retirement 31

Americans with Disabilities Act of 1990. 32

Disabled Access Credit - '44. 33

Eligible Small Business. 33

Eligible Access Expenditures. 33

Credit Amount 34

Architectural Barrier Removal - '190. 34

Entities & Title. 35

Ownership Vehicles & Entities. 35

Individual & Sole Proprietorship. 35

Corporate. 35

Categories of C Corporations. 36

Trusts. 36

Title Holding. 36

Business Trusts. 36

Co-Tenancy. 36

Partnership. 37

Family Partnerships. 37

Limited Liability Company. 37

Retirement Plan. 37

Custodianship. 38

Estate. 38

Insurance. 39

Life Insurance. 39

Purpose. 39

Tax Overview.. 40

Income Tax. 40

Transfer for Value Rule. 40

Estate Taxes. 40

Gift Taxes. 41

Annuities. 41

Deferred Annuity. 41

Private Annuity. 41

Foreclosure. 42

Discharged Debt 42

Nonrecourse Indebtedness. 42

Recourse Indebtedness. 42

Reporting. 43

Form 1099A.. 43

Involuntary Conversions. 44

Condemnations. 44

Threat of Condemnation. 44

Reports of Condemnation. 44

Property Voluntarily Sold. 45

Easements. 45

Condemnation Award. 45

Amounts Withheld From Award. 45

Net Condemnation Award. 45

Interest on Award. 45

Payments to Relocate. 45

Severance Damages. 46

Treatment of Severance Damages. 46

Expenses of Obtaining an Award. 46

Special Assessment Withheld from Award. 47

Severance Damages Included in Award. 47

Gain or Loss from Condemnations. 47

How to Figure Gain or Loss. 47

Part Business or Part Rental 47

Postponement of Gain. 47

Choosing to Postpone Gain. 47

Cost Test 48

Replacement Period. 48

Condemnation. 48

Replacement Property Acquired Before the Condemnation. 48

Extension. 48

Time for Assessing a Deficiency. 49

Related Party Rule. 49

Torts & Personal Injuries. 50

Types of Torts. 50

Intentional Torts. 50

Unintentional Torts. 50

Business Torts. 51

Damages. 51

Personal Injury Awards - '104. 51

Personal Injury. 52

Back Pay. 52

Installment Payments. 53

Nonphysical Personal Injury. 53

Punitive Damages. 53

Wrongful Death. 53

Interest & Legal Fees. 53

Chapter 1 - Section 2 Review Questions. 54

Answers & Explanations. 55

Glossary. 61

Keywords & Phrases. a

CPE Exam Answer Sheet d

Final Examination. e