1040 Preparation and Planning 7: Other Income and Exclusions (2026)

Author: Barbara Weltman, Greg White

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 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 two-hour CPE course, the seventh in the 1040 Preparation and Planning series, covers various types of income not discussed in other courses in this series, as well as exclusions from gross income.

Tax developments reflected in this course include the extensive changes effective for 2025 that were created by the One Big Beautiful Bill Act of 2025 (OBBBA) and other tax legislation, as well as IRS pronouncements and court decisions. They impact 2025 tax year returns that will be filed during the 2026 filing season and refund opportunities for earlier years; as well as point the way to strategic planning in 2026 and beyond. This course brings the tax preparer "up-to-speed" in preparing 2025 tax returns for the 2026 filing season.

Publication Date: September 2025

Topics Covered

• Commercial Annuities
• General Rule
• Expected Return
• Cashing in Annuities
• Penalties on Early Distributions
• IRA Distributions
• Reporting IRA Distributions
• Reporting IRA UBIT
• SECURE Act 2.0 - Required Beginning Date for RMDs
• Beneficiary Distributions
• Determining the Beneficiary
• Owner Dies After 2019
• Guidance on the 10-Year Rule
• Inherited IRAs - General Thoughts
• Qualified Charitable Distributions
• Annual Exclusion for QCDs
• Exclusions in General
• Gifts and Inheritances
• Insurance Proceeds
• Life Insurance
• Accelerated Death Benefits
• Surrender of Life Insurance Policy
• Death Benefits Paid by an Employer
• Death Benefits Paid to Military Personnel
• Proceeds from Accident and Health Insurance Policies
• Disability Policies
• Scholarships and Fellowships
• Workers' Compensation
• Damages for Injuries and Claims
• Miscellaneous Income
• Qualified Tuition Plans
• Gift Tax Consequences for Contributions to 529 Plans
• ABLE Accounts
• Miscellaneous Exclusions
• Disaster Relief and Mitigation Payments
• Foster Care Payments
• Difficulty-of-Care Payments
• Public Assistance
• Qualified Medicaid Waiver Payments

Learning Objectives

• Recognize how to report income from a commercial annuity
• Explain how to calculate required minimum distributions (RMDs)
• Explain distribution rules for Roth IRAs
• State the withholding rules for distributions from qualified retirement plans and IRAs
• Explain the concept of an exclusion
• Describe the tax treatment of gifts and inheritances
• Recognize how to distinguish between taxable and tax-free damages
• List miscellaneous income that is tax-free

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None