Pennsylvania Tax Institutes, Inc.

Pennsylvania's Foremost Federal Income Tax Seminars

Preliminary Outline of 2010 National Income Tax Workbook
(May 21, 2010)

New Legislation

Congress continues to be active in passing tax legislation that affects tax returns for 2010 and future years. This chapter covers tax legislation that was enacted 2010.

Rulings and Cases

This chapter summarizes selected rulings and cases that were issued from September 2009 through August 2010 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

  • Schedule L (Form 1040)
  • Tax Consequences of Owning a Home
  • Part-time Clergy
  • Recoveries and the Tax Benefit Rule
  • Taxation of Damage Awards and Settlements
  • Education Credits and Deductions

Financial Distress

This chapter covers practical tax issues that arise from financial distress such as reporting information from Form 1099-A and Form 1099-C on the debtor's tax return and showing tax attribute reductions on Form 982. It includes issues such as foreclosure, repossession, property with debt in excess of FMV, and bankruptcy of both homes and business property. Credit card debt is also discussed.

Business Issues

  • Fringe benefits
  • Schedule C (Form 1040)
  • Form 2106 planning issues
  • Self-employment income
  • Hobby loss issues
  • Domestic production activity deduction update
  • Benefits of C corporation
  • Single member LLC: EIN and liability rules

Agricultural Issue

  • Conservation programs
  • Ethanol issues
  • Depreciation issues
  • Domestic production activity deduction for cooperatives
  • Wind and solar power issues
  • Reporting hedge contracts that are open at end of the year
  • Interpreting Form 1099-G
  • Constructive receipts
  • Tax issues related to going out of business
  • Energy efficient farm equipment

Retirement

This chapter focuses on Roth IRAs. Topics include:
  • Conversion of regular IRA to Roth IRA: 2010 v. 2011 and 2012 recognition of income including present value analysis to determine if an IRA should be converted
  • Roth 401(k)
  • Qualified distributions
  • Penalty provisions
  • Long-term planning with Roth IRAs
  • Chart of retirement plan requirements and limits

Investment Issues

  • Interpreting brokerage statements
  • Reporting calls and puts on stocks and commodities
  • Accrued interest calculations and reporting
  • Buying and selling life insurance policies
  • Tax consequences of losses on investments
  • Oil and gas: reporting issues for royalty owners

IRS Issues

  • Practitioner registration
  • Oversight of tax return preparers
  • EITC Compliance
  • Electronic filing tips
  • Electronic Federal Tax Payment System
  • IRS Notices and Letters
  • CP 2000 Frequently Asked Questions
  • Audit reconsideration process
  • Bank Secrecy Act reporting requirements

Income taxation of Trusts and estates

  • Decedent's final return; filing status: both H and W die in the same year
  • Beneficiaries' returns
  • Crops contracted for sale before death
  • Choosing the end of the tax year for an estate

Tax Practice

  • Amending amendments such as an I.R.C. 179 deduction or NOL carryback
  • Forms issues such as e-file signature authorizations and transmittal of an e-file
  • Responding to a math error correction
  • Tax doctrines such as constructive receipt of income, step transactions, substance over form and the tax benefit rule

Basis of Assets

This chapter is a comprehensive discussion of the income tax basis rules. Topics include:
  • Assets transferred by gift
  • Assets transferred at death, including carry-over basis rules in 2010
  • Basis rules for charitable contribution deduction
  • Term interests, including life estates
  • Conversion of personal property to business or investment property
  • I.R.C. 1060 allocation

Recapture Provisions

This chapter is a comprehensive discussion of the recapture provisions in the Internal Revenue Code including depreciation, personal credits, excess front-loaded alimony payments, I.R.C. 1231 losses under 5-year look-back rule, investment credit, at-risk amount less than zero, low-income housing credit, cost sharing payments and soil and water conservation expenses.

Ethics

  • Impact of practitioner registration
  • Conflicts of representation
  • Who is the client?

Tax Rates and Useful Tables

This chapter reports the updated income tax rates and other income tax rates and thresholds that adjust each year