New Legislation
Congress continues to be active in passing tax legislation that affects tax returns for 2009 and future years. This chapter covers tax legislation that was enacted at the end of 2008 and during 2009.
Rulings and Cases
This chapter summarizes selected rulings and cases that were issued from September 2008-August 2009 to give participants an update on issues that are being addressed by the IRS and the courts. The rulings and cases are organized under topic headings that match the titles of other chapters.
Individual Taxpayer Issues
This chapter covers a variety of income tax issues that affect individual tax payers. Topics include:
- Definition of a qualifying child/qualilfying relative
- Married filing jointly versus married filing separately
- Miscellaneous deductions not subject to the 2%-of-AGI floor
- Long-term care payments
- Kiddie tax
- Taxpayers living and working abroad
- Resident and non-resident aliens
- Property tax addition to the standard deduction
- Individual assistance funds
- Differential wage payments to members of armed forces
Business Issues
Tax issues that arise in operating a business are discussed in this chapter. Topics include:
- Cost of goods sold
- Sale of a business
- Conversion business auto to personal use
- Migrant labor
- Start-up costs
- Repairs v. capital improvements
- Loan expenses (amortization)
Agricultural Issues
Topics of current interest to practitioners who prepare farm income tax returns are discussed in this chapter. Topics include:
- 5-year depreciation recovery period for equipment
- Futures and options
- Qualified deferred payment contracts
- Transitioning farm businesses to rental
- Social security strategies
- Soil and water districts (sale and leasing of water rights)
- Wind farms
Business Entities
This chapter covers practical issues that tax practitioners face in their income tax practice. Topics include:
- Fringe benefits: comparison of business entities
- Reasonable compensation/guaranteed payments
- Late and flawed S elections
- Basis in S corporations and partnerships
- New single member LLC EIN and liability rules
IRS Issues
Topics for this chapter are provided by IRS management and are expected to include compliance issues and preparer penalities.
Retirement
This chapter focuses on the effects of the downturn in the stock market on retirement plans. It includes topics such as:
- Repeal of required minimum distribution rule for 2009
- Financial distress reverberations including plan losses
- Conversion of IRA to Roth
- IRA distributions penalty exceptions
Investment Issues
This chapter discusses issues that affect taxpayers who have investments. Topics include:
- Zero percent capital gains rate for 2009 an 2010
- Conversion of residence to rental
- 529 plans (losses)
- Losses on stocks, bonds and mutual funds
- Abandonment
- Worthless securities
- Ponzi schemes
Ethics
This chapter discusses some ethical principles for deciding how to respond to issues that arise in a tax practice. Numerous examples illustrate how the principles can be applied.
Tax Practice
This chapter discusses issues that tax preparers face in their tax practices. Topics include:
- Exceptions to the accuracy-related penalty under I.R.C. §6662
- Letter of engagement
- Penalty for disclosure or use of information by tax (I.R.C.§7216)
Tax Credits
This chapter looks at selected personal and business credits and explains limitations on their use, interactions, carryforwards, and carrybacks, and whether they are refundable or nonrefundable.
Net Operating Losses
This chapter explains how to calculate the net operating loss for both individuals and corporations. It then discusses the options for carrying the NOL back or forward and compare the tax consequences of those choices.
Tax-exempt Organizations
This chapter explains the different tax-exempt statuses for federal income purposes and compares those rules with the rules for nonprofit status under state law. The changes to Form 990 are discussed and the filing requirements for Form 990, Form 990-EZ and the e-postcard are explained.
Tax Rates and Useful Tables
This chapter reports the updated income tax rates and other income tax rates and thresholds that adjust each year.
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