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Cut Your Clients Tax Bill: Individual Tax Planning Tips and Strategies

Cut Your Clients Tax Bill: Individual Tax Planning Tips and Strategies

Bill Bischoff

ISBN: 978-1-119-51230-1

May 2018

272 pages



This title provides the latest techniques for building and conserving wealth through proactive tax-planning and investment strategies. Completely updated for tax law changes, this book will bring you up-to-date on the latest strategies that will keep more money in the hands of clients and make their accountant look like a hero!

This book will help:

  • Determine when selling capital assets, business assets, and real estate are to a client’s advantage
  • Apply like-kind exchange rules under Section 1031
  • Identify ways to advise clients on how to minimize taxes on employer stock options and employer stock held in qualified retirement plan accounts
  • Differentiate between incentive stock options (ISOs) and nonqualified stock options (NQSOs)
  • Determine ways to help clients obtain maximum tax savings from vacation home and timeshare properties
  • Differentiate between the rules for “regular” vacation homes, timeshares, and co-ownership deals
  • Determine appropriate federal income tax advice for clients who are separated, divorcing, or divorced
  • Recall ways to help middle-class clients identify college financing tax breaks
  • Identify tax-saving college financing manoeuvres for higher-income clients who are ineligible for the well-known education tax breaks
  • Identify strategies of husband-wife businesses that will reduce Social Security and Medicare taxes
  • Identify strategies for how parents can employ their children through their closely held business

Related Resources


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Chapter 1 Maximizing Tax Benefits for Sales of Capital Gain Assets and Real Property 1-1

Current Capital Gain and Dividend Tax Rates 1-3

Tax-Smart Strategies for Capital-Gain Assets 1-7

Tax-Smart Strategies for Fixed-Income Investments 1-11

Planning for Mutual Fund Transactions 1-13

Converting Capital Gains and Dividends into Ordinary Income to Maximize Investment Interest Write-Offs 1-18

Planning for Capital Gain Treatment for Subdivided Lot Sales via IRC Section 1237 Relief 1-21 Land Is Not Always a Capital Asset 1-28

Beneficial Capital Gain Treatment Allowed for Sale of Right to Buy Land and Build Condo Project 1-32

Escape Taxable Gains Altogether With Like-Kind Exchanges 1-34

Primer on the 3.8 Percent Net Investment Income Tax 1-48

Chapter 2 Planning for Employer Stock Options, Employer Stock Held in Retirement Accounts, and Restricted Stock 2-1

Planning for Employer Stock Options, Employer Stock Held in Retirement Accounts, and Restricted Stock Employer Stock Options: Tax Implications 2-2

How to Handle Employer Stock from Qualified Retirement Plan Distributions 2-12

Restricted Stock: Tax Implications 2-14

Chapter 3 Maximizing Tax Benefits for Personal Residence Transactions 3-1

Maximizing Tax Benefits for Personal Residence Transactions 3-1

Qualification Rules for Gain Exclusion Privilege 3-3

Excluding Gain from Sale of Land Next to Residence 3-13

Excluding Gains in Marriage and Divorce Situations 3-14

“Electing Out” of Gain Exclusion Privilege 3-18

Sale of Former Principal Residence “Freed Up” Suspended PALs from Rental Period Even Though Gain on Sale Was Excluded 3-19

Understanding the Tax Implications of Personal Residence Short Sales and Foreclosures 3-20

Tax Angles When Client Converts Personal Residence into Rental Property 3-28

Chapter 4 Tax Planning Opportunities with Vacation Homes,Timeshares,and Co-Ownership Arrangements 4-1

Rules for “Regular” Vacation Homes (as Opposed to Timeshares and Co-Ownership Deals) 4-2

Rules for Timeshares and Vacation Home Co-Ownership Arrangements 4-6

Playing the Gain Exclusion Game with Multiple Residences 4-9

Chapter 5 Tax Planning for Marital Splits and Married Same-Sex Couples 5-1

Separate Versus Joint Returns for Pre-Divorce Years 5-3

Avoiding Pre-Divorce Tax Fiascos with IRA and Qualified Retirement Plan Assets 5-11

Planning to Achieve Tax-Effective Splits of IRA and Qualified Retirement Plan Assets 5-12

Planning to Achieve Equitable After-Tax Property Divisions 5-18

Planning for Children’s Dependent Exemption Deductions 5-21

Planning to Qualify Payments as Deductible Alimony 5-22

Tax Developments Affecting Married Same-Sex Couples 5-30

Chapter 6 Tax-Saving Tips for Self-Employed Clients 6-1

“Heavy” SUVs, Pickups, and Vans Are Still Big Tax-Savers 6-2

Combine “Heavy” Vehicle with Deductible Home Office for Major Tax Savings 6-8

Home Office Deduction Options 6-10

What to Do When Spouses Are Active in the Self-Employment Activity 6-20

Simplified Compliance Rules for Unincorporated Husband-Wife Businesses in Non-Community Property States 6-27

Update on Tax-Smart Health Savings Accounts 6-30

Chapter 7 Tax-Smart College Financing Strategies 7-1

Education Tax Credits 7-2

Deduction for Higher Education Tuition and Fees 7-8

Deduction for Student Loan Interest 7-10

Coverdell Education Savings Accounts 7-12

Tax-Free Interest from U.S. Savings Bonds 7-13

Electing the Accrual Method for U.S. Savings Bonds 7-16

Splitting Investment Income with the Kids 7-18

How a Closely Held Business Can Deduct College Expenses Paid for the Owner’s Adult Child 7-30

“Last-Minute” Suggestions for Procrastinators 7-32

Tax Glossary Tax Glossary 1

Index Index 1

Solutions Solutions 1

Chapter 1 Solutions 1

Chapter 2 Solutions 4

Chapter 3 Solutions 5

Chapter 4 Solutions 6

Chapter 5 Solutions 7

Chapter 6 Solutions 9

Chapter 7.Solutions 11

Recent Developments

Users of this course material are encouraged to visit the AICPA website at to access supplemental learning material reflecting recent developments that may be applicable to this course. The AICPA anticipates that supplemental materials will be made available on a quarterly basis. Also available on this site are links to the various “Standards Trackers” on the AlCPA’s Financial Reporting Center which include recent standard-setting activity in the areas of accounting and financial reporting, audit and attest, and compilation, review and preparation.