1040 Preparation and Planning 5: Gross Income: Capital Gains and Losses (2025)

Author: Barbara Weltman, Greg White

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2027 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

This six- hour CPE course, the fifth in the 1040 Preparation and Planning series, covers gains and losses, involuntary conversions, basis, capital and ordinary assets, and capital gains and losses.

Tax developments reflected in this course include the extensive changes effective for 2024 that were created by the Consolidated Appropriations Act, 2023 (which includes SECURE Act 2.0), the Inflation Reduction Act of 2022, and other tax legislation, as well as IRS pronouncements and court decisions. They impact 2024 tax year returns that will be filed during the 2025 filing season and refund opportunities for earlier years; as well as point the way to strategic planning in 2025 and beyond. This course brings the tax preparer "up-to-speed" in preparing 2024 tax returns for the 2025 filing season.

Publication Date: September 2024

Topics Covered

• Gain or Loss on the Sale or Exchange of Property
• Realized Gain or Loss
• Capital Gains Tax
• Capital Assets
• Exceptions for Capital Assets
• General Treatment of Capital Gains
• Exceptions for General Treatment of Capital Gains
• Determination of the Transaction's Tax Treatment
• Sales and Exchanges of Personal Use Property
• General Treatment of Capital Losses
• Treatment of Capital Losses in Excess of Capital Gains
• Basis
• Purchase and Sale of a Going Business
• Basis of Property Acquired by Gift
• Adjustments for Gift Taxes Paid
• Securities Acquired at Different Prices
• Basis of Inherited Property
• Basis of Intangible Assets
• Long-Term and Short-Term Gains and Losses
• Short-Term Capital Gains and Losses
• Holding Period
• Section 1231 Gains and Losses
• Reporting Digital Asset Transactions
• Installment Method of Reporting Income
• Electing Out of Installment Reporting
• Tax Rates Applicable to Installment Payments
• Home Sale Exclusion
• Gain Allocated to the Period of Nonqualified Use
• Exceptions to the Two-Year Test
• Section 1244 Stock
• Exclusion of Gain for Small Business Stock
• Wash Sales
• Nonbusiness Bad Debts
• Involuntary Conversions: Examples
• Involuntary Conversion of a Residence

Learning Objectives

• Explain how taxable income affects the capital gains rate
• Describe what a capital asset is
• Explain tax basis and holding period
• Recognize how to figure gain or loss
• Recognize how to apply the capital loss limitation
• Explain the wash sale rule
• Explain the tax treatment of cryptocurrency
• Recognize how to determine reporting under the installment sale rule
• Recognize how to determine whether a transaction qualifies as a like-kind exchange
• Explain the rules for involuntary conversions
• Explain the tax benefits for Opportunity Zone investments
• Describe how to complete Form 8949 and Schedule D of Form 1040 or 1040-SR

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (6 hours)

Program Prerequisites
None

Advance Preparation
None