TAP: Transactional Problems

General Description:

The objective of the Tax Accounting Series is for the participant to acquire a basic understanding as to how the various tax accounting rules apply in determining when an item is taxable or deductible and in what year an item is taxable and deductible. This seminar emphasizes what to do if the transaction turns out to be different than the way the item was treated in a prior taxable year.

Learning Objective:

After completing this course the participant will be able to determine and evaluate the options when a transaction was treated differently in a prior taxable year; specifically, whether to:

• File an amended return; due to a math error (addition, subtraction, multiplication, and division), transposition error, omission, mistake, or required by the Internal Revenue Code.
• Describe the tax benefit rule of §111 and its application to excess state revenues and an ERC refund.
• Calculate tax due under the rules of §1341 (see Form 1040, Schedule 3, Line 13(b)):
• Return of an item previously included in gross income;
• How to turn Workers' Compensation into taxable income.
• Wait until the transaction is completed:
• Options;
• Section 451(b) for business with an AFS;
• Section 451(c) and advance payments for services and inventoriable goods;
• Section 460, long-term contracts, and §460(e) for small construction contracts;
• Payment of contested liability;
• Section 404(a)(5), 2½-month rule for compensation;
• Section 461(h), economic performance;
• Rev. Proc. 2007-53, advance payments for volume orders (not available if cash basis).
• Do nothing: King Estate; Gmelin (Griffith and Unvert).
• Make an adjustment in reserve account:
• Section 448(d)(5), limited application; Rev. Proc. 2011-46, Book Reserve Method, Periodic Receivables System;
• Too much or too little depreciation?

Instructors:

Mark A. Vogel is a retired professor and director of the University of Denver Graduate Tax Program, where for 38 years he taught courses in individual, fiduciary, tax accounting, partnership, and corporate taxation. He is the author of Divorce Taxation Guide (John Wiley & Sons) and Individual Taxation (Shepards/McGraw-Hill). He received a J.D. and LL.M. in Taxation from the University of Denver College of Law and an undergraduate accounting degree from the University of Notre Dame. He is also a CPA licensed in Illinois.

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