2008 Income Tax Seminar Book - Part II

Table of Contents / Page No.

NEW TAX LAW
Mortgage Forgiveness Debt Relief Act of 2007  1-5
Discharges of up to $2 million of mortgage debt  1
The “sale” could produce gain or loss  2
Mortgage Insurance Deduction  2-3
Survivor’s Home Sale Exclusion  3-4
Volunteer Emergency Responders  5
Economic Stimulus Act of 2008  6-13
Rebates  6-7
Eligibility  7
Identification Requirements  8
Child Payments  8
Qualifying Child  8
Phase-out  8
Second Chance  9
IRS Will Not Challenge Accuracy of Certain Returns Filed to Claim Rebate  9
Relief for Stimulus Payments Withdrawn from IRAs  10
Enhanced Expensing (Section 179)  10-11
Bonus Depreciation  11-13
Luxury Automobiles  13
Housing Assistance Tax Act of 2008  14-20
First-Time Home¬buyers Tax Credit  14-15
Repayment  15
Accelerated Recapture  16
Special Election  16-18
Property Tax Deduction for Non-itemizers  19
Credit Card Information Reporting  19
Reduced Home Sale Exclusion  20
Emergency Economic Stabilization Act of 2008  21-32
Executive Compensation  21
Fannie and Freddie Stock Losses  21
Enhanced AMT Exemption Amounts  22
Personal Nonrefundable Credits May Offset AMT and Regular Tax  22-23
AMT Refundable Credit Amount Liberalized  23-24
Above-the-Line Deduction for Educator Expenses Extended  24
Election to Deduct State & Local General Sales Tax  25
Above-the-Line Deduction for Higher Education  25
Additional Standard Deduction for State and Local Property Taxes Extended  25
Two-Year Extension for Nontaxable IRA Transfers to Eligible Charities  25-26
15–Yr Writeoff for Qualified Leaseholds and Restaurant Property  26-27
DPAD Available for Puerto Rico for Two More Years  27
Two-Year Extension for Rule for S Corporation Contributions  27
Refundable Child Credit Eased  28
Certain Farming Machinery and Equipment Treated as 5-year Property  28
Energy Tax Incentives  28-29
Broker Basis Reporting  29-30
Disaster Relief  30-31
Midwest Disaster Area  30
Hurricane Ike Disaster Area  31
National Disaster Relief  31
Preparer Penalty Eased  31
Bicycle Commuters Fringe Benefit  31-32
Additional Provisions – Not Covered  32
FEDERAL DEVELOPMENTS
Estimated Tax Vouchers  33
New Mileage Rates for 2008  33
Cafeteria plan distributions of unused health FSA to activated reservists  33-36
Fourth Quarter 2008 Interest Rates  36
Vehicles Certified as Qualified Advanced Lean-Burn Technology Vehicles  37
Hurricane Grant Guidelines Now Available  38
Employee Tool & Equipment Plans  38
IRS “Dirty Dozen for 2008  39-41
2009 Social Security Changes Cost-of-Living Adjustment  42
IRS Announces Pension Plan Limitations for 2009  43-45
Is Your Hobby a For-Profit Endeavor?  45
COURT CASES
Court rejects IRS treatment for demutualization  46
Alimony deductions disallowed  47
Nonbusiness deductions - day traders - seminars and travel costs  47-48
10% additional tax on early distributions – IRAs – exceptions  48-50
Deductions - standard vs. itemized - election to itemize - failure to file returns  50
Fraud penalties-limitation periods on assessments  50
FEDERAL TAX UPDATE
Form 1040  51-111
Dependent – Qualifying Child  53-54
Children of divorced or legally separated parents  55-56
Waiver of Exemption (Form 8332)  57
Custodial Parent Can Unilaterally Negate Noncustodial Parent Rule  57-59
Pre-Act Dependency Requirements - Qualifying Relative  59-60
Qualifying child of “any other taxpayer” for qualifying relative rules  61
Head of Household  62
Child Tax Credit  63
Dividends  63-64
Social Security Benefits  65-66
Educator Expenses  66
Employee Business Expenses of Qualified Performing Artist  67
Health Savings Accounts  68-69
Moving expenses  70
Self-employed Health Insurance Deduction  70-72
Student Loan Interest  73-74
Tuition and Fees Deduction  74-76
Domestic Production Activities Deduction  76-88
Standard Deduction for Real Property Taxes  90
New loss deduction for non-itemizers  90
Standard Deduction  90-91
Personal Exemption  92
2008 Tax Tables  93
Credit for Child and Dependent Care Expenses  94-95
Education Credits  95-96
Child Tax Credit  97
Retirement Savings Contribution Credit  98
Residential Energy Efficient Property Credits  98-100
Earned Income Credit  101
Nontaxable combat pay election  102
Additional Child Tax Credit  102
Recovery Rebate Credit  103-104
Estimated Tax Penalty  106
Form 4868 - Automatic 6 month extension  106
Where to File Form 1040, Form 1040V, Form 4868, Form 1040X  106-111
Form 1040, Schedule A  112-145
Medical and Dental Expenses  113-128
Income Taxes  128
General Sales Taxes  129
Real Estate Taxes  129
Personal Property Taxes  129-130
Home Mortgage Interest  130-132
Deductible Points  132-133
Qualified Mortgage Insurance Premiums  134-135
Investment Interest Expense   135-137
Charitable Contributions  137-140
Car Donations  139-140
Casualty and Theft Losses  140-142
Miscellaneous Deductions  143
Gambling Losses  143-145
Form 1040, Schedule B  146-148
Excludable Savings Bond Interest  147
Ordinary Dividends  147
Form 1040, Schedule C  149-159
Car and Truck Expenses  151
Depreciation and Section 179 Expense  151-159
Travel, Meals, and Entertainment  159
Home Office Expenses  159
Form 1040, Schedule D  160-176
Definition of Capital Asset  162
Capital Gains Rates  163
Basis of Mutual Funds  164-166
Capital Loss  166
Inherited Property  167-168
Holding Period  168
Nonbusiness Bad Debt  168
Wash Sale Rules  169-170
Sale of Residence  170-176
Form 1040, Schedule E  177-193
Renting your Residence for Less than 15 Days  179
Vacation Home Rules  179-181
Rental Income  181-183
When To Report Rental Income on Schedule C  183
Repairs and Improvements  183-185
Renting Part of Property  185-186
Passive Activity Rules  186-188
Activities That Are Not Passive Activities - Real Estate Professionals  188-193
Form 1065 – (Schedule K-1)  194-195
Form 1116, Foreign Tax Credit  196-202
Form 6252, Installment Sale Income  203-206
TAX PLANNING STRATEGIES AND CONSIDERATIONS
Individual Retirement Accounts (IRAs)  207-210
Roth IRA  211-212
Annual Roth vs. Deductible IRA Contribution  212-216
Summary of Potential Roth IRA Benefits  217
Required Minimum Distribution Rules  218-219
IRA Estate Tax Issues  220
IRC §72(t) Substantial Periodic Payments  220-222
Conversion to Roth IRA  223-229
Net Unrealized Appreciation  230-233
Roth 401(k) – Another Choice to Consider  234-237
Using Trusts as a Beneficiary with Traditional IRA’s  238-240
Long-Term Care Insurance – Deduction  241-242
SEP Worksheet – 2008  243
SIMPLE Worksheet – 2008  244