Interest: A Tax Analysis

Course Information

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Title: Interest: A Tax Analysis
Category: Taxation
Field of Study: Taxes
Course Code: T022-0156
CPE Credits: 2.0
Price: 19.95



This course focuses on tax issues affecting the treatment of interest and debt. It covers the definition of bona fide debt, the impact of related parties, the avoidance of equity and lease characterization, and deductible versus nondeductible interest factors. Sticky cross issues such as the impact of at-risk rules under Section 465, passive loss restrictions of Section 469, and below-market rate loans under Section 7278 are examined. In addition, the accounting method treatment of interest, points, prepaid interest, and discounted loans are reviewed. Particular attention is given to imputed interest and original issue discount.

Delivery Method: Online Interactive Self Study

Level: Overview

Prerequisites: None

Advanced Preparation: None

Course Details

Category: Taxation

Field of Study: Taxes

Passing Score: 70%

Technical Details: Taxes: Technical

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1. Determine “interest” and select how much is tax deductible under Section 163 by: a. Identifying what constitutes bona fide debt considering economic substance and purpose and the differences that such debt has from installment sales, long-term & leveraged leases, and annuities; b. Specifying how transactions with family members and controlled corporations can recharacterize alleged indebtedness into gift or business equity naming the factors used in this recharacterization and; c. Recognizing incentives to use corporate debt instead of equity and the special treatment of failed equity investment under Section 1244. 2. Identify deductible interest and special calculation concepts and procedures by: a. Recognizing the allocation of interest based on the debt’s business or personal purpose specifying the application of any carryover rules; b. Determining net investment income including its impact on the deductibility of investment interest; c. Recognizing the special tax treatment given to student loans, marg

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QAS: Yes

CPA: Suitable for all CPAs

IRS: IRS credit for Enrolled Agents.

Profession Identifiers: CPA, EA