This course is specifically for Enrolled Agents that need to report to the IRS.

Tax reform provisions have frequently changed the tax on profits realized from the disposition of real estate. This has forced investors to seek “escape hatches” from fluctuating capital gains taxes. Tax-deferred exchanges permit the disposition of property often with the taxpayer receiving significant cash but without the payment of any tax. Functionally, an exchange is a “bridge” over the normally taxable event of moving from one property to another. This course alerts the practitioner to the different planning opportunities that surround exchanging and also identifies the tax consequences of home sales, foreclosure, repossession and other real property dispositions. Additional topics of interest include involuntary conversions and at-risk limits.

Learning Assignment & Objectives

As a result of studying the assigned materials, you should be able to meet the objectives listed below.

ASSIGNMENT

At the start of the materials, participants should identify the following topics for study:

• Capital gains
• Home sales
• Installment method
• Contingent payments or price
• Section 1031 like-kind exchanges
• Delayed exchange regulations
• Actual & constructive receipt rule
• Foreclosure
• Repossession
• Condemnations

Learning Objectives

After reading the materials, participants will be able to:

1. Match capital gains rates to applicable assets using the "basket" approach, identify the requirements of the home sale exclusion, and calculate gain using the installment method pointing out the application of the unstated interest rules.
2. List the types of property that qualify for a like-kind exchange and describe the methods of identifying such property in a delayed exchange explaining the procedural mechanics of such an exchange.
3. Distinguish between recourse and nonrecourse indebtedness describing their impact on foreclosures, explain how various types of property affect the repossession rules of §1038 including basis and gain or loss for both installment and non-installment method sales.
4. Demonstrate how easements affect condemnations, explain to clients how to report gain or loss associated with involuntary conversions, list the types of payments included in a condemnation award, and name the types of entities that qualify for exclusion from at-risk limits distinguishing recourse and nonrecourse financing.

Revision Date: 3/29/2024

Additional Contents : Complete, no additional material needed
Advance Preparation : None
Intended Participants : Any CPA looking to maintain or enhance their professional competence
Course Declaration : Participants must complete the final examination within one year of purchase. A minimum passing grade of 70% or better is required to receive CPE
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