Dealing with Debt and Interest ON DEMAND

Overview

This course brings the practitioner up-to-date information on tax issues affecting interest and debt. It covers the definition of bona fide debt, the avoidance of equity and lease treatment, imputed interest rates, and debt modification. The various types of interest and their required allocation are explored and reviewed. For the economically troubled client, special attention is devoted to debt cancellation, repossession, discounts, and foreclosure. The program also discusses installment sales, equity participation debt, taxable interest, and bad debts.

Highlights

Deductible interest and debt. Allocation of deductible interest. Home mortgage interest. Taxable interest. Installment sales. Repossession. Debt cancellation and foreclosure. Equity participation debt. Foreign interest withholding. Bad debts.

Prerequisites

None.

Designed For

CPAs, financial professionals, enrolled agents, and attorneys.

Objectives

Determine “interest” and select how much is tax deductible under Section 163, identify what constitutes bona fide debt, specify how transactions with controlled corporations can recharacterize alleged indebtedness into business equity, and differentiate debt from leveraged leases, and annuities. Identify deductible interest and applicable business interest limitations and determine net investment income and its relationship to the investment interest deduction. Specify nondeductible interest and the provisions that deny, restrict, or require capitalization, and recognize the Section 465 at-risk limitations and the application of the Section 469 passive loss rules. Recognize the deduction of interest using either the cash method or accrual method and determine the special elections applicable to and treatment of carrying charges under Section 266, below-market loans, imputed interest, and original issue discount, and more.

Preparation

None.

Notice

None.