There are no prerequisites.

Course Description

This valuable course brings you 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. This course also explores the various types of interest and their required allocation. For the economically troubled client, special attention is devoted to debt cancellation, repossession, discounts, and foreclosure. You'll also learn about installment sales, equity participation debt, taxable interest, and bad debts.


Danny Santucci, JD

Danny Santucci, BA, JD, is a prolific author of tax and financial books and articles. His legal career started with the business and litigation firm of Edwards, Edwards, and Ashton. Later he joined the Century City entertainment firm of Bushkin, Gaims, Gaines, and Jonas working for many well-known celebrities. In 1980, Danny established the law firm of Santucci, Potter, and Leanders in Irvine, California. With increasing lecture and writing commitments, Danny went into sole practice in 1995. His practice emphasizes business taxation, real estate law, and estate planning. Speaking to more than 100 groups nationally each year, he is known for spicing up his extensive expertise with an incredible sense of humor.

Course Specifics

Nov 16, 2017
There are no prerequisites.

Compliance Information

IRS Provider #: 0MYXB
IRS Course ID: 0MYXB-T-00637-14-S
IRS Federal Tax Law Credits: 15
CTEC Provider #: 2071
CTEC Course ID: 2071-CE-0655
CTEC Federal Tax Law Credits: 15
Qualifies for CA Fraud: No

Learning Objectives

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

Chapter 1

  • Identify whether interest is tax deductible under §163.
  • List incentives to use corporate debt instead of equity.
  • Categorize deductible interest.
  • Identify provisions that deny or restrict the deduction of interest.
  • Cite the special elections applicable to and treatment of carrying charges under §266.

Chapter 2

  • Identify how to allocate deductible interest based on the use and repayment of the loan proceeds.
  • Identify special rules to the allocation of interest expense in connection with debt-financed acquisitions of, and distributions from, partnerships and S corporations.

Chapter 3

  • Identify categories of mortgages and characteristics of secured debt that influence the deductibility of interest.
  • Define 'qualified home.'
  • Identify when a stock in a cooperative housing corporation owned by a tenant-stockholder is a qualified home.

Chapter 4

  • Distinguish dividends from interest.
  • List the types of U.S. savings bonds.
  • Identify the tax treatment of bonds sold between interest dates.
  • Categorize state or local government debt obligations.

Chapter 5

  • Identify the importance of the installment method.
  • Define basic terminology associated with using the installment method.
  • Identify the basic regulations governing like-kind exchanges.
  • Identify how to allocate payments for a single sale of several assets among different classes according to R.R. 76-110.
  • Identify circumstances when dispositions of installment obligations occur.

Chapter 6

  • Identify the variables that determine which §1038 rules for repossessions apply.
  • Calculate basis and gain or loss resulting from repossession of personal property using installment method and the noninstallment method sales.
  • Make a distinction between the rules, calculations, and effects of repossessions of personal and real property.
  • Determine when a §166 bad debt deduction may be taken if the seller repossesses real property.

Chapter 7

  • Identify the effect that debt cancellation has on net worth and potential income inclusion from cancellation of indebtedness income.
  • List exceptions to the general income inclusion rule.
  • Cite the special basis reduction rules.
  • Identify variables that are considered in determining whether shares of stock issued to a creditor are nominal or token.
  • Identify the hidden income tax danger of directly or indirectly acquiring one's own debt at a discount.

Chapter 8

  • Identify the mechanics of equity participation debt.
  • List examples of equity participation loans.
  • Identify common elements and characteristics of shared appreciation loans.
  • Identify the tax treatment of shared appreciation mortgages based on the hybrid concept and R.R. 83-51.
  • Compare and contrast the two basic types of equity participation debt.

Chapter 9

  • Identify the general tax treatment of interest received from sources within the United States.
  • Identify the tax treatment of foreign interest.

Chapter 10

  • Classify bad debts into two categories.
  • Identify the tax treatment of bad debts.
  • List the various forms on which a bad debt deduction should be taken, depending on the entity type.

Choose Your Preferred Format

Online Access

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Hard Copy

Our self-study materials are authored by top-quality, industry experts. You’ll receive a bound notebook of all the course materials, shipped to you within one business day. In addition, you’ll also have full online access. Each self-study package includes a robust collection of learning and reference materials to help you cover the information efficiently and put it into practice immediately.

hard copy
Self-Study Video

Experience high-quality instruction with our Self-Study Videos, available to you 24/7. With more than 80+ videos currently in the Western CPE Self-Study Video library, you can see and hear our expert instructors deliver the information you need in a dynamic way that allows you to immediately apply your learning. Unlike a live course or webcast, you can complete the course on your own time, playing and pausing as needed. Self-Study Videos allow you to complete your CPE requirements on your own time.

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