2007 Income Tax Seminar Material - Part II

Table of Contents / Page No.

NEW TAX LAW
Tax Relief and Health Care Act of 2006  1-9
Deduction for State and Local Sales Taxes  1
Higher Education Tuition Deduction  1
Work Opportunity and Welfare-to-Work Tax Credits  2
Leasehold and Restaurant Improvements  2
Corporate Donations of Computer and Scientific Equipment  2
Earned Income Tax Credit for Combat Pay  2
Health Savings Account Enhancements  3
Energy Extenders  4-5
§121 exclusion of gain by employees of the intelligence community  5-6
Frivolous tax submissions  6
Whistleblower reforms  6-7
Refundable AMT credit for ISOs  7-9
Mortgage insurance premium deduction  9
Permanent capital gains treatment for self-created musical works  9
Small Business and Work Opportunity Tax Act of 2007  10-23
Small Business Expensing (Section 179)  10
FICA Tip Credit  11-12
Work Opportunity Tax Credit  12
MFJ return can elect not to be treated as a partnership  13
S Corporations  13-16
Passive Investment Income  14
Partial Sale of Qsubs  15
Reduction of E&P  16
Banks operating as S Corporations  18
Kiddie Tax Changes  17-18
Interest and Penalty Suspension  18
Return Preparer Penalties  19-20
Erroneous Refunds  20-21
Katrina Recovery Tax Incentives  22-23
FEDERAL DEVELOPMENTS
Noncustodial Parent Not Allowed Dependency Exemption Deduction  24
Denied Dependency Exemption for No Valid Waiver  24
Antarctica Not a Foreign Country  24
Taxpayer Liable for Early Distribution Penalty  25
Settlement Proceeds from Broker Were Taxable as Long-Term Capital Gain  25
Limitations period: Assessment: Fraud: Tax Preparer  25
Mileage Not Adequately Substantiated  25
Earned income credit: Eligibility - Parent Incarcerated  26
Unsupported Claimed Business Expenses Not Deductible  26
New Electronic PIN Signature Requirement Begins in 2008  26-29
Form 8453  28
Form 8879  29
Poker Tournament Winnings Must be Reported to the IRS  29
Phone Customers Can Still Request Excise Tax Refund  30
Form 8919 - Uncollected Social Security and Medicare Taxes on Wages  30
Form 8919  31
2008 Social Security Changes Cost-of-Living Adjustment  32
IRS Announces Pension Plan Limitations for 2008  33-35
IRS Issues Redesigned Allowable Living Expense Standards  35
Final Circular 230 and Proposed Preparer Penalty Regulations Issued  36-37
Application Available for Reduced Installment Agreement User Fee  37
IRS “Dirty Dozen for 2007  38-41
Loss of IRS Laptops Jeopardizes Personal Information of Taxpayers  41-42
Proposed Legislation  42-43
FEDERAL TAX UPDATE
Form 1040  45-102
Dependent – Qualifying Child  47-50
Waiver of Exemption (Form 8332)  52
Pre-Act Dependency Requirements - Qualifying Relative  53-54
Uniform Definition - Qualifying Child – Flowchart  56
Head of Household  57
Child Tax Credit  58
Dividends  58-59
Social Security Benefits  60-61
Educator Expenses  61
Health Savings Accounts  63-64
Moving expenses  65
Self-employed Health Insurance Deduction  65-67
Student Loan Interest  67-68
Tuition and Fees Deduction  68-70
Domestic Production Activities Deduction  70-81
Standard Deduction  83
Personal Exemption  84
Education Credits  85-87
Residential Energy Credits  87-89
Form 5695, Residential Energy Credits  90-91
Child Tax Credit  92-93
Retirement Savings Credit  93-94
Earned Income Credit  94
Nontaxable combat pay election  95
Additional Child Tax Credit  95
Estimated Tax Penalty  96-97
Form 4868 - Automatic 6 month extension  97
Where to File Form 1040, Form 1040V, Form 4868, Form 1040X  98-102
Form 1040, Schedule A  103-143
Medical and Dental Expenses  104-119
Income Taxes  119
General Sales Taxes  119
Real Estate Taxes  120
Personal Property Taxes  120
Home Mortgage Interest  120-123
Qualified Mortgage Insurance Premiums  124-125
Investment Interest Expense  126-128
Charitable Contributions  128-131
Car Donations  130-131
Casualty and Theft Losses  131-133
FEMA Disaster Area Designations  134-140
Gambling Losses  141-142
Form 1040, Schedule B   144-146
Form 1040, Schedule C   147-155
Car and Truck Expenses   149
Depreciation and Section 179 Expense  149-153
Travel, Meals, and Entertainment  154
Home Office Expenses  154-155
Form 1040, Schedule D  156-172
Definition of Capital Asset  158
Capital Gains Rates  159
Basis of Mutual Funds  160-163
Capital Loss  163-164
Nonbusiness Bad Debt  164-165
Wash Sale Rules  166
Sale of Residence  167-172
Form 1040, Schedule E  173-191
Renting your Residence for Less than 15 Days  175
Vacation Home Rules  175-177
Rental Income  177-178
When To Report Rental Income on Schedule C  179
Repairs and Improvements  179-180
Renting Part of Property  182
Passive Activity Rules  183-184
Activities That Are Not Passive Activities - Real Estate Professionals  184-189
Part II: Partnership and S Corp., Income and Loss  190
Form 1065 – (Schedule K-1)  192-193
Form 6251, Alternative Minimum Tax – Individuals  194-196
Form 6252, Installment Sale Income  197-200
TAX PLANNING STRATEGIES AND CONSIDERATIONS
Double Itemizing/Bunching up Itemized Deductions  201-202
Employ the Children Before Year-End  203
Starting a Roth IRA for a Working Child  203-204
Make Use of $12,000 Gift Tax Annual Exclusion  204-205
Donating Appreciated Assets to Charity  205-206
IRA Distributions Donated to Charity in 2006 and 2007 May be Tax-Free  206-209
Ownership and Sales of Property  209
Individual Retirement Accounts (IRAs)  210-211
Annual Roth vs. Deductible IRA Contribution  212-217
Summary of Potential Roth IRA Benefits  218-219
Required Minimum Distribution Rules  219
IRA Estate Tax Issues  221-222
Required Minimum Distribution Rules – Nonspouse Beneficiary  222
IRA Non-Tax Issues  223
IRC §72(t)  219
Conversion to Roth IRA  225-237
Unrealized Gains & Loss Report  238-239
Tax Exempt Income – Is the Client Saving Any Money?  240-241
Social Security & Full Retirement Age  241-242
Tax Deferred Exchanges  243-250
SEP Worksheet – 2007  251
SIMPLE Worksheet – 2007  252
Individual 401(k) Worksheet – 2007  253
Traditional 401(k) Worksheet – 2007  254