2024 National Income Tax Workbook

 

Note: This is a preliminary list of topics to be covered and is subject to change. Some topics may be moved from the listed topic area to another. Additional topics may also be added.

 

Ethics

This chapter discusses important issues that help tax practitioners comply with their ethical obligations. Topics include the following:

• Beneficial ownership interest reporting and the unauthorized practice of law
• Due diligence – Report of Foreign Bank and Financial Accounts (FBAR)
• Due diligence – written information security plan (WISP)
• Practice continuation – planning for retirement, disability, or death
• Ten case studies that illustrate real-life ethical scenarios

 

Trusts and Estates

This chapter discusses the tax consequences when a debt owed by a decedent is cancelled, and the tax implications of cancellation of a debt owed to the decedent. It reviews when a taxpayer can obtain an income tax charitable contribution deduction or an estate tax charitable deduction for certain contributions, not in trust, of partial interests in property. This chapter explains planning techniques for use of the increased basic exclusion amount before it sunsets in 2026. This chapter reviews the grantor trust rules, and it includes sample language that a tax practitioner should look for to determine whether a trust is a grantor trust. This chapter discusses when jointly owned property is included in the gross estate, and how to determine the basis of property passing to a surviving joint owner. Finally, this chapter explains a recent case that created a split in the circuit courts regarding when life insurance proceeds used to redeem a deceased owner’s interest are included in valuing the deceased owner’s interest in the company.

 

Related Party Issues

Related party rules frequently affect the timing or character of income or deductions and sometimes disallow a loss or deduction entirely. This chapter discusses the following:

• I.R.C. § 267 loss limits/income matching
• Transactions between related persons and partnerships
• Disallowance of the I.R.C.§ 179 deduction and bonus depreciation on property acquired from a related party
• Ordinary income treatment of related party gain from the sale or exchange of depreciable property
• Like-kind exchanges with a related party
• Related party installment sales

 

Limited Liability Company Issues

This chapter covers important tax considerations for limited liability companies (LLCs). It reviews the default entity classifications, and how an entity can elect to change its default entity classification. It explains how a change in LLC ownership may cause a change in its default entity classification and the tax consequences of a change in classification. This chapter discusses tax issues for an LLC owned by spouses. It also examines the impact of LLC owner compensation on the QBI deduction and the section 179 deduction. Finally, this chapter explains a recent Tax Court case that applies a functional analysis to determine if a partner is a limited partner whose distributive share of partnership income may not be subject to self-employment tax.

 

Business Entity Tax Issues

This chapter examines current issues that pertain to business entities, including beneficial ownership interest reporting and the pass through entity tax deduction and the tax benefit rule. It explains how a tax practitioner can help a nonprofit organization maintain its tax exempt status, and new guidance that allows an I.R.C. § 501(c)(3) organization to change to another exempt entity type. This chapter provides an overview of the centralized partnership audit regime, with a focus on how a partnership decides if it should elect out of that regime.

 

IRS Issues

This chapter covers key IRS issues for practitioners. Topics include the following:

• When tax liens attach
• Record retention requirements
• IRS online accounts 
• E-filing requirements and exceptions
• Taxpayer Advocate Service
• IRS Stakeholder Liaison
• Tax scams

 

Business Tax Issues

This chapter reviews the deduction for certain interest on indebtedness that is contingent on a future event, and the tax impact of conditions that arise after the sale. This chapter explains how to calculate the gain on a contingent payment installment sale, where the sale price has not been fixed in the year of the sale. This chapter explains what constitutes a business bad debt and the timing and amount of the deduction. It also discusses when fringe benefits are available to small business owners on a tax-favored basis. This chapter details eligibility for up to a $150,000 credit for employer-provided child care. It explains the business meal and entertainment expense deduction, including several important exceptions to the limit on the deduction. Finally, this chapter discusses how a marijuana business reports its income and expenses.

 

Real Estate Rental Activity Issues

This chapter details information that is essential for a tax practitioner who prepares tax returns claiming income and expenses from rental activities. It includes the following topics:

• Residential real estate rentals
• Passive activity loss limits
• Self-employment tax on rental activities
• Repairs/capital expenditures
• Reporting rental activities on Schedule E (Form 1040)

 

Agricultural and Natural Resource Tax Issues

This chapter covers several current issues for tax practitioners preparing returns for farmers and ranchers, including the following:

• Breweries, distilleries, and wineries, inventory and capitalization

• Vines, fruit trees, UNICAP, bonus depreciation

• Oil and gas depletion

• Farm and ranch tax elections

• Easements

• Qualified conservation easement contributions

 

Individual Tax Issues: Part 1

This chapter covers several current issues for tax practitioners preparing individual income tax returns, including the following:

• Digital assets
• Due diligence for credits and filing status
• Energy credits
• New clean vehicle credit
• Previously owned clean vehicle credit

 

Individual Tax Issues: Part 2

This chapter covers several current issues for tax practitioners preparing individual income tax returns, including the following:

• Health savings accounts
• Section 529 plans
• Cancellation of debt income

 

New and Expiring Legislation

This chapter covers recently enacted tax legislation and procedures. It is organized by subject to help participants quickly find topics of interest and includes a table of tax provisions that expired or are set to expire.

 

Oklahoma Tax Law Update

A staff member of the Oklahoma Tax Commission will provide an update of important tax provisions and discuss the relevance to Oklahoma taxpayers.