Top Federal Tax Issues for 2021 CPE Course: Module 3 (Currently Unavailable)

Author: Jennifer Kowal, Greg White

Top Federal Tax Issues Course Module 3 addresses the creation and exclusion of cancellation of indebtedness income, debt modifications, tax attribute reduction, the treatment of tax claims in bankruptcy, and the taxation of the bankruptcy estate. For clients who are applying for or have received Paycheck Protection Program loans, practical planning ideas to maximize debt forgiveness are also discussed.

Publication Date: October 2020

Designed For
CPAs, Tax Professionals

Topics Covered

• Cancellation of indebtedness income
• Debt modification rules
• Taxpayers in bankruptcy
• Recent developments
• PPP Flexibility Act of 2020
• Maturity date
• Sixty percent payroll costs limit
• The new constraints on forgiveness
• Forgiveness "haircuts"
• "Overflowing" forgivable costs
• The argument for prepayments
• Updates

Learning Objectives

• Explain the difference in tax treatment between cancellation of recourse debt and foreclosures of property securing non-recourse debt
• Identify situations when cancellation of indebtedness income may be excluded under Code Section 108
• Describe which types of debt modifications are treated as exchanges, and the tax consequences
• Explain the tax treatment of claims in bankruptcy and the taxation of the bankruptcy estate
• Identify what is considered first in the order of basis reduction
• Recognize how to compute the amount of debt forgiveness
• Recognize how to compute the limit on nonpayroll expenses
• Develop practical steps for unused funds near the end of the 8-week covered period
• Compute the maximum loan amount for sole proprietors and partnerships
• Identify remaining areas where guidance is still lacking

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
None

Advance Preparation
None