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2016/2017 Federal andCalifornia Tax Update SeminarFinal VersionSpidell Publishing, Inc. Experienced . Trusted . Connected!www.caltax.com
SlideshowUse the following link to access the slideshow from this /slides/16fedcalslideshow.pdfElectronic copy of seminar manualand follow-up letterAs part of your registration fee, we will e-mail you a link to download a completely updated copy ofyour seminar manual and follow-up letter in February 2017.Stay informed with Spidell’s Flash E-MailTo sign up for Spidell’s free Flash E-Mail service, go to www.caltax.com and log in (or create an accountif you don’t already have one). Then go to the “My Account” page, scroll to the bottom, and click the linkunder “Spidell’s Mailing Lists” to go to the Flash E-Mail page where you can manage your subscription.You can also access an archive of past Flash E-Mail messages at www.caltax.com. Click the “News”button and then click “Flash E-Mail.”
Your Presenters:Lynn Freer, EATim Hilger, CPAWayne Otchis, CPARenée Rodda, J.D.Mark Seid, CPA, EASteve Yukelson, CPAPublisher:Lynn Freer, EAEditor-in-Chief:Tim Hilger, CPASpidell Publishing, Inc.P.O. Box 61044Anaheim, CA 92803-61441134 N. Gilbert StreetAnaheim, CA 92801-1401Phone: (714) 776-7850Fax: (714) 776-9906Website: www.caltax.comE-mail: subscriptions@spidell.comCalifornia Editor:Renée Rodda, J.D.Contributing Editors:Michael Giangrande, J.D., LL.M.Sandy Weiner, J.D. Spidell Publishing, Inc.Third EditionFebruary 2017
This publication is distributed with the understanding that theauthors and publisher are not engaged in rendering legal, accountingor other professional advice and assume no liability in connectionwith its use. Tax laws are constantly changing and are subject todiffering interpretation. In addition, the facts and circumstances inyour particular situation may not be the same as those presented here.Therefore, we urge you to do additional research and ensure that youare fully informed before using the information contained in thispublication. Federal law prohibits unauthorized reproduction of thematerial in Spidell’s 2016/2017 Federal and California Tax UpdateSeminar manual. All reproduction must be approved in writing bySpidell Publishing, Inc. This is not a free publication. Purchase of this electronic publicationentitles the buyer to keep one copy on his/her computer and toprint out one copy only. Printing out more than one copy — andany electronic distribution of this publication — is prohibited byinternational and United States copyright laws and treaties. Illegaldistribution of this publication will subject the purchaser to penaltiesof up to 100,000 per copy distributed.
Table of Contents
List of ChaptersChapter 1:IndividualsChapter 2:Foreign ReportingChapter 3:Affordable Care ActChapter 4:BusinessChapter 5:Practice and ProceduresChapter 6:RetirementChapter 7:Estates and GiftsChapter 8:Real EstateChapter 9:Tax Reform: Comparison and California ReactionChapter 10:California Legislation and ConformityChapter 11:California Filing IssuesChapter 12:California IndividualsChapter 13:California BusinessChapter 14:California MiscellaneousChapter 15:Practitioner Aids
2016/2017 Federal and California Tax Update SeminarChapter 1 — IndividualsPersonal exemptions and dependents — IRC §§151–153 .1-1Personal exemption phaseout .1-1Dependents .1-1Filing issues .1-3Filing deadline is April 18, 2017 .1-3Delayed refunds for Earned Income Tax Credit and Refundable Child Tax Credit .1-4IRS issued final regulations defining marital status .1-4Gross income .1-8Capital gains .1-8Other income .1-8Exclusions from income .1-11Aliso Canyon gas leak reimbursements.1-11New exclusion for Olympic medals and prizes — IRC §74(d) .1-12COD exclusion — IRC §108 .1-13Foster care — IRC §131.1-15Wrongfully incarcerated individuals — IRC §139F .1-17Foreign-earned income exclusion — IRC §911 .1-17Adjustments to gross income.1-18Educator expenses — IRC §62(a)(2)(D) .1-18Alimony — IRC §§71, 215 .1-18Student loan interest — IRC §221 .1-20Tuition deduction — IRC §222 .1-20Health savings accounts — IRC §223 .1-21Standard deduction and itemized deductions.1-22Standard deduction — IRC §63 .1-22Itemized deduction phaseout .1-23Medical expenses — IRC §213 .1-23Taxes — IRC §164.1-25Casualty and theft losses — IRC §165 .1-25Interest — IRC §163 .1-26Charitable contributions — IRC §170 .1-30Tax calculation .1-34Alternative minimum tax and credits .1-34Individual tax credits .1-35Adoption Credit — IRC §§23, 137.1-35Child Tax Credit — IRC §24 .1-36Earned Income Tax Credit — IRC §32 .1-38American Opportunity Tax Credit — IRC §25A .1-41 2016iSpidell Publishing, Inc.
2016/2017 Federal and California Tax Update SeminarPreparers are required to file revised due diligence checklist .1-44Saver’s Credit — IRC §25B .1-47Nonbusiness energy credits — IRC §25C .1-48Residential Energy Efficient (solar) Property Credit — IRC §25D .1-48Solar energy credit .1-50Qualified Plug-in Electric Drive Vehicles Credit — IRC §30D .1-60Self-employment tax .1-62Retirement payments from Mary Kay were subject to self-employment tax .1-62Oil and gas interest subject to self-employment tax .1-63Elder abuse case is cracked open by Vanguard customer service representative .1-64Disposal of assets was not a trade or business .1-65Household employees (“nanny tax“) .1-65Nanny tax threshold .1-65Chapter 2 — Foreign ReportingFBAR .2-1Due dates for report of foreign bank and financial accounts (FBAR) changing in 2017 .2-1Guidance issued on offshore streamlined account compliance for eligible retired Canadians .2-2Online gambling accounts not subject to FBAR.2-4Foreign asset disclosure — FATCA — Form 8938 .2-5Entities will be required to file Form 8938 with 2016 returns .2-5FATCA and FBAR requirements .2-8Chapter 3 — Affordable Care ActIndividuals .3-1Individual shared responsibility payments (penalties) go up again in 2016 .3-1Taxpayers who marry during the taxable year .3-2Business .3-13Shared responsibility for employers in full swing in 2016 .3-13Recent news .3-15Deadline for providing health coverage forms extended.3-15President signs bill giving relief to health reimbursement accounts .3-15Spidell Publishing, Inc. ii 2016
2016/2017 Federal and California Tax Update SeminarChapter 4 — BusinessBusiness filing .4-1Due dates for business returns changing.4-1IRC §179 and depreciation .4-4Bonus depreciation .4-4IRC §179 .4-5Antiques not depreciable .4-6PATH Act enhances deductions for qualified real property .4-7Automobile expenses .4-15Standard mileage rate .4-15Business income .4-17Cash basis taxpayer allowed to accrue certain income .4-17Business deductions .4-18Trade or business expenses, generally — IRC §162 .4-18Hobby losses — IRC §183 .4-22Compensation paid to shareholder-officers was reasonable .4-26Shareholder’s personal expenses paid by S corporation are loan repayments .4-28Costs to acquire domain names for business use .4-30Litigation costs found to be ordinary and necessary .4-32Lapsed contract is not worthless .4-32Transportation fringe benefits — IRC §132 .4-32Corporations .4-34Small business stock .4-34Built-in gains .4-35Partnerships .4-35Partnership loss disallowed because taxpayer had no basis.4-35IRS allows late §754 election .4-35Repair regulations.4-36IRS issues audit technique guide for repair regulations .4-36De minimis safe harbor election — big boost for 2016 .4-37Change in accounting method .4-39Business credits .4-41Credit for increasing research activities — IRC §41 .4-41Crowdfunding .4-48What’s included in taxable income.4-48When to include the income .4-48Other business provisions of PATH Act .4-49Expiring in 2016 .4-4950% expensing of mine safety equipment .4-49 2016iiiSpidell Publishing, Inc.
2016/2017 Federal and California Tax Update SeminarS corporation shareholder basis adjustment for charitable contributions .4-49Enhanced deduction for food inventory .4-49Differential wage payments.4-50Work Opportunity Tax Credit.4-50New Markets Credit .4-50Indian Employment Credit .4-50Alternative Fuel Vehicle Refueling Property Credit .4-50Credit for Two-Wheeled Electric Plug-In Vehicles .4-50New Energy Efficient Home Credit.4-50Credit for fuel cell vehicles .4-50Employee versus independent contractor .4-51Coldwell Banker settles with misclassified employees .4-51Judge rejects Uber settlement .4-51Costs of misclassification .
Your Presenters: Lynn Freer, EA Tim Hilger, CPA Wayne Otchis, CPA Renée Rodda, J.D. Mark Seid, CPA, EA Steve Yukelson, CPA Spidell Publishing, Inc.
