Making the Best of Bad Situations 

Course Description:

This mini-course will teach participants how to apply, implement, and evaluate the strategic tax aspects of marital and financial setbacks. Property transfers, asset divisions, alimony, filing status, exemptions, and child support are examined.

The cancellation of indebtedness income inclusion rules are discussed in the context of debt forgiveness and property foreclosure. Emphasis is given to the exceptions from income inclusion contained in §108. The tax treatment of property repossession under §1038 and bad debt treatment under §166 is reviewed.

Learning Objectives:

Upon successful completion of this course, participants will be able to:

• Recognize tax considerations and tax guidance for marital tax liability and refund offsets. 
• Identify the elements of  §1041 nonrecognition and specify variables that determine whether a payment is alimony.
• Determine the exceptions to the general income inclusion rule and recognize the tax issues in calculating gain or loss resulting from foreclosure or repossession, including the differences between personal and real property repossession.
• Identify nonbusiness and business bad debts under §166, determining their differences in Code requirements and amount allowed.