1040 Preparation and Planning 5: Gross Income: Capital Gains and Losses (2021)

Author: Barbara Weltman, Sidney Kess

CPE Credit:  3 hours for CPAs
3 hours Federal Tax Related for EAs and OTRPs
3 hours Federal Tax Law for CTEC

This on-demand course discusses gains and losses. It defines basic terms, such as amount realized, basis, realized gain, and realized loss. It explains the basic requirements for nonrecognition of gain on involuntary conversions, and computation of the basis of property. The course looks at the distinction between capital and ordinary assets, which is important because capital gains and losses are reported differently from ordinary gains and losses, and the deduction of capital losses is sharply limited. It also covers Form 8949 and Schedule D of Form 1040.

The exclusion of gain from sale of a principal residence, and how the business use of a home affects that will be covered and expenses that can increase or decrease the basis in a principal residence will be explained. Additionally, the course covers how to handle like-kind exchanges (including exchanges of insurance policies) property settlements on marital dissolutions, involuntary conversions, and special exchange rules.

Publication Date: October 2020

Designed For
Tax practitioners.

Topics Covered

  • Form 8949 and Schedule D of Form 1040 or 1040-SR
  • Gains and losses
  • Involuntary conversions
  • Basis
  • Capital and ordinary assets
  • Capital gains and losses

Learning Objectives

  • Identify how taxable income affects the capital gains rate
  • Describe what a capital asset is
  • Recognize how to discuss tax basis and holding period
  • Identify how to figure gain or loss
  • Recognize how to apply the capital loss limitation
  • Describe the wash sale rule
  • Determine reporting under the installment sale rule
  • Determine whether a transaction qualifies as a like-kind exchange
  • Recognize how to explain the rules for involuntary conversions
  • Discuss the tax benefits for Opportunity Zone investments
  • Explain the rules for involuntary conversions
  • Recognize 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 (3 hours)

Program Prerequisites
None

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $71.00

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