This CPE course, the sixth in the series, covers income and expenses of sole proprietors and independent contractors on Schedule C, farm income and expenses on Schedule F, and rents and royalties on Schedule E. The course reflects changes made by the Consolidated Appropriations Act, 2022, the Inflation Reduction Act of 2022, and other tax legislation, IRS pronouncements, and court decisions. This course brings the tax preparer "up-to-speed" in preparing 2022 tax returns for the 2023 filing season.
Publication Date: September 2022
Designed For
Tax practitioners.
Topics Covered
- Business Income and Expenses
- Spousal Businesses
- Business Deductions
- Reasonableness of Salaries
- Determining Reasonable Salaries
- What Constitutes a Trade or Business?
- Examples of Common Ordinary and Necessary Business Expenses
- Start-Up Expenses
- Advertising Expenses
- Business Bad Debts
- Loans by Shareholder-Employees
- Recovery of Bad Debts
- The Nonaccrual-Experience Method
- Statute of Limitations for Bad Debts
- Explanation of Bad Debt Deduction on Tax Return
- Bribes and Kickbacks
- Fines and Penalties
- Lobbying Expenses
- Interest on Tax Deficiencies
- Commercial Landlord
- Repairs and Maintenance Costs
- Capital Expenditure
- Repair
- Capital Items
- Environmental Cleanup
- Research and Development Expenditures
- Carrying Charges, Interest, and Taxes on Real Estate
- Travel Expenses
- Expenses of Self-Employed Persons
- Accountable Plans
- Considerations for Reasonable Time
- Types of Expenses
- Depreciation
- Classes of Property
- Half-Year Convention
- Optional Tables
- Mid-Month Convention
- Section 179 Deduction
- Taxable Income Limitation
- Bonus Depreciation
- Alternative Depreciation System (ADS)
- IRS Procedures
- Section 1245 Recovery Property
- Amortization
- Business Start-Up Expenditures
- Depletion
- Business Losses
- Net Operating Losses
- Loss Carrybacks and Carryovers
- Deductions
- Passive Activity Loss (PAL) Rules
- Tests to Determine Material Participation
- Rental of a Home
- Qualified Business Income Deduction
Learning Objectives
- Complete Schedule C
- Determine eligibility for and report deductions on a range of business expenses
- Report deductions for travel-away-from-home costs
- Determine whether meal cost limitations apply
- Calculate deductions for business vehicle use
- Figure the home office deduction
- Explain property depreciation, first-year expensing, bonus depreciation, and depreciation recapture
- Apply the rules for amortization, depletion, different types of losses, and bad debts
- Identify expenses subject to amortization
- Figure depletion deductions
- Apply the limits on trade or business losses
- Determine net operating losses
- Determine whether a debt is a business or nonbusiness bad debt
- List special deductions for farming activities
- Apply the passive activity loss rules to businesses and rental activities
- Determine when losses from the rental of a home are deductible
- Figure the qualified business income deduction
- Identify on which schedule the deduction for business bad debts (not related to farming) is reported
- Identify how many years an individual has in which to file an amended return and report a bad debt
- Identify what percentage of the cost of entertaining customers (or prospective customers), employees, business associates, and so on is deductible
- Identify the maximum home office deduction that can be claimed if the simplified method is used
- Identify which part of Schedule C self-employed persons should use to figure depreciation on a business car or truck if they are not otherwise required to file Form 4562
- Identify over how many years residential real property is depreciated using the straight-line method and a mid-month convention
- Identify the number of different rules for figuring depreciation recapture on real estate
- Identify which type of depletion method may be used for all assets subject to depletion
- Identify the IRS form used to calculate casualty losses
Level
Intermediate
Instructional Method
Self-Study
NASBA Field of Study
Taxes (5 hours)
Program Prerequisites
1040 Preparation and Planning: Fundamentals or basic understanding of Form 1040.
Advance Preparation
None
Instructors
Barbara Weltman
Barbara Weltman, JD, has written extensively on a wide variety of tax, small business, and financial planning matters for both professionals and the general public. The Wall Street Journal called her “the guru of small business taxes.” She is the author of a number of self-study programs for CCH. She is publisher of Big Ideas for Small Business® and Idea of the Day® found at www.BigIdeasForSmallBusiness.com and is a guest blogger for the SCORE and many other sites. Ms. Weltman is a graduate of Brooklyn Law School.
Sidney Kess
Sidney Kess, Esq., CPA, JD, LLM, Of Counsel, Kostelanetz & Fink, LLP, New York, NY is a nationally renowned tax expert and author/coauthor of hundreds of tax books on financial and estate planning. Having lectured to more than 50,000 practitioners on tax, financial, and estate planning, he is one of the nation’s best known lecturers in continuing professional education. Mr. Kess is consulting editor of CCH Incorporated’s Financial and Estate Planning Repoorter. Mr. Kess was chairman of the advisory board of Tax Hotline and is a member of the PPC Tax Action Panel. He has edited a column on “Tax Tips” for the New York Law Journal for the past 43 years. Mr. Kess edits the AICPA’s CPA Client Bulletin and CPA Client Tax Letter. He is Executive Editor of CPA Magazine. He has also written hundreds of AICPA tax workshops, audio and video programs, and is the recipient of the AICPA Distinguished Lecturer Award. Mr. Kess is often quoted in The Wall Street Journal, The New York Times, and other national publications. He was included in Accounting Today’s “100 Most Influential CPAs in the U.S.” for several years as well as CPA Magazine’s “Most Influential CPAs in the U.S.” Mr. Kess was the National Director of Tax at KPMG Main Hurdman and a tax partner at KPMG Peat Marwick. Mr. Kess is the recipient of the AICPA’s “Special Recognition Award” for his many years of contributions to the AICPA’s continuing professional education program, received the 2011 AICPA Gold Medal Award for Distinguished Service to the Accounting Profession, which is the highest award in the industry, and was elected to the Estate Planning Hall of Fame by the National Association of Estate Planners & Councils for his distinguished service to the field of estate planning. The AICPA established the Sidney Kess Award for Excellence in Continuing Education to recognize individual CPAs who have made significant and outstanding contributions in tax and financial planning and whose public service exemplifies the CPA profession’s values and ethics. Sidney Kess was the first recipient of this Award. Mr. Kess was inducted into the New York State Society of CPAs’ Hall of Fame. He received his JD from Harvard University School of Law, LLM from New York University Graduate School of Law, and BBA from Baruch College.
Greg White
Greg White, CPA, taught for 14 years as an adjunct professor for Golden Gate University. He’s admitted to practice before the United States Tax Court. He is a founder and shareholder, in WGN PS in Seattle, WA. He has been named a Top 50 IRS Representation Practitioner in the U.S. by CPA Magazine and has taught for a number of professional organizations. Greg enjoys the technical side of tax, but also likes to have fun in class.