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Matthew Hutchens

This course examines the U.S. federal tax system as it relates to property transactions of business owners and shareholders. Topics include cost recovery, such as depreciation, amortization, and depletion; calculation of realized versus recognized gains and losses; evaluation of the potential tax effects of nontaxable exchanges; and the combining, or netting, gains and losses that are different in nature. Assignments facilitate self-discovery of knowledge and development of a variety of professional skills.

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Syllabus

INTRODUCTION TO THE COURSE
In this module, you will become familiar with the course, your instructor and your classmates, and our learning environment. This orientation will also help you obtain the technical skills required to navigate and be successful in this course.
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Module 1: Introduction to Cost Recovery and Depreciation
In this module, you will be introduced to concepts of cost recovery used by U.S. Taxpayers. The nature of property will be discussed designating the difference between realty and personalty. The Modified Accelerated Cost Recovery System (MACRS) will be explained along with its classification of both real and personal assets as well as applicable conventions used in depreciating property. Finally, learners will discover how to use the tax depreciation tables to aid in the determination of allowable cost recovery deductions.
Module 2: Accelerated Depreciation, Amortization, and Depletion
In this module, you will take a deeper dive into concepts of cost recovery used in the U.S. Federal tax structure. This deeper dive begins with a discussion about the two different types of additional first year depreciation, known as Section 179 depreciation and "bonus" depreciation. Next, you will learn about listed property, which faces limitations on the deductibility. You will learn how intangible personal and real property costs are recovered through amortization, and which kinds of intangible property are eligible to be amortized. You will also learn how natural resource costs are recovered through depletion deductions.
Module 3: Gains, Losses, and Adjusted Basis
In this module, you will take a deep dive into property transactions, specifically disposals, and their tax consequences under U.S. federal tax law. First, we’ll begin by discussing the economic concept of amount realized. Next, we’ll discuss differences between the amount and gains or losses realized versus recognized, such as deferred or postponed gains and disallowed losses. Last, we’ll discuss the three main ways property basis is established, namely cost basis, gift basis, and inheritance basis.
Module 4: Disallowed Losses, Like-kind Exchanges, and Involuntary Conversions
In this module, you will learn about unique property transactions where gains and/or losses are deferred. First, we’ll discuss circumstances where certain losses on the disposal of property are not allowed to be recognized. Next, we’ll discuss a type of non-taxable exchange called “like-kind exchange,” which allows properties to be exchanged with no tax recognition, and the rules governing its tax deferred status. Next, we’ll discuss specific circumstances where part of the non-taxable transaction actually becomes taxable due to receipt of non-like-kind property, called boot. Last, we’ll talk about what basis the newly exchanged property should have, and what the holding period should be. We'll then continue our discussion regarding non-taxable exchanges and discuss involuntary conversions. You will learn the earliest and latest dates to involuntarily exchange an asset after a casualty loss or condemnation. Next, we discuss paths for conversion, direct and indirect, and their tax consequences. We discuss two tests governing the involuntary conversion rules, specifically the functional use test and the taxpayer use test.
Module 5: Special Gain/Loss Provisions
In this module, we start off by discussing the rules governing the non-taxation of the sale of a taxpayer’s primary residence. We'll discover special nonrecognition rules for the contribution of property to business entities. Next, we’ll learn what wash sales are and the dates that determine whether or not the losses can be recognized. Finally, we'll learn about the special treatment of worthless securities and gains and losses on certain small business stock.
Module 6: Character and the Netting Process
In this module, we discuss the character and applicable tax rates for gains and losses on the disposal of property. Gains and losses are categorized into ordinary, Section 1231, and long-term capital “preferential” rates. Next, the importance of the holding period and its determination of whether an asset is designated as short-term versus long-term is discussed. The netting of gains and losses from different characterizations is discussed. Last, we discuss what a Section 1231 asset is and how it gets treated in the netting process.
Module 7: Depreciation Recapture and Other Items in the Netting Process
In this module, you will take a deeper dive into two categories within Section 1231 assets, Section 1245 assets and Section 1250 assets. You will learn about both depreciation recapture and depreciation unrecapture, and the varying special tax rates for gains that are recaptured or unrecaptured. You will discover how other gains and losses fit into the netting process. You will learn about a special rule that applies to the sale of depreciable property between related parties. Last, you will learn about the Net Investment Income Tax.
Module 8: Final Comprehensive Exam
In this final module, you will apply the tax rules you have learned throughout this course to a series of problems. When presented with hypothetical taxpayer situations, you will identify potential tax issues and determine appropriate tax treatments.

Good to know

Know what's good
, what to watch for
, and possible dealbreakers
Examines the U.S. federal tax system. This is useful for tax professionals, accountants, auditors, and law professionals who need this expertise
Real estate professionals, such as agents, brokers, and developers, may find this course helpful for understanding tax implications of real estate transactions
Teaches accelerated depreciation, amortization, and depletion. These are critical concepts for understanding various depreciation deductions under the U.S. federal tax structure
Useful for investment professionals, including financial advisors and portfolio managers, who advise their clients on the tax implications related to property transactions
Taught by an instructor who is an expert in their field. This is a positive sign, as the instructor likely has a deep understanding of the subject matter
This course could possibly be used as a refresher or review. Refreshers and reviews are sometimes useful for knowledge retention, even if you know the subject matter quite well

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Reviews summary

Highly-rated federal taxation ii

Learners say that this Federal Taxation II course has great content and is a wonderful learning experience. They say that the instructors are fantastic. Students will be able to learn important concepts related to business property taxation. There are video transcripts of the lessons, which many find helpful for revision. The real-life examples in the course make everything easier to understand, and students also appreciate the clear explanations of complex topics.
Learners appreciate the inclusion of real-life examples.
"The course content was great and the instructor presented things very clearly."
"real-life examples made everything crystal clear."
This course teaches complex topics in a clear way.
"Great bite size information that is relevant and applicable."
"Great deal of knowledge, great explanation of difficult topics."
"The exposition of the many complex topics was clear."
Students highly rate the quality of course content.
"Great course!"
"Great content, awesome instructors."
"Excellent overview of the relevant taxes applicable to property transactions. Great content and well presented!"
Learners say this course has fantastic instructors.
"The best Instructors in Coursera!"
"Great both in terms of substance and structure."
"The exposition of the many complex topics was clear."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Federal Taxation II: Property Transactions of Business Owners and Shareholders with these activities:
Review Federal Tax Guide
This book provides a comprehensive overview of the US Federal tax system and will help orient you to the bigger picture and basic vocabulary.
Show steps
  • Read the first three chapters of the Federal Tax Guide.
  • Review the key concepts covered in each chapter.
  • Take notes on the key concepts.
Show all one activities

Career center

Learners who complete Federal Taxation II: Property Transactions of Business Owners and Shareholders will develop knowledge and skills that may be useful to these careers:
Tax Accountant
Tax Accountants prepare and analyze individual, business, and organizational tax returns using knowledge of tax laws and regulations. Federal Taxation II: Property Transactions of Business Owners and Shareholders can be an integral part of becoming a Tax Accountant. The course can help familiarize you with the U.S. tax system as it pertains to real estate and personal property. This would be an advantage should you decide to specialize in taxes affecting real estate.
Auditor
Auditors examine and evaluate financial records to ensure accuracy and compliance with regulations. They may also perform risk assessments and make recommendations for improvements to internal controls. Taking Federal Taxation II will help you develop a strong foundation in property transactions, including cost recovery, depreciation, gains and losses, and nontaxable exchanges, all of which are relevant concepts in auditing.
Financial Analyst
Financial Analysts provide investment advice to individuals, businesses, and organizations. They also research and make recommendations on stocks, bonds, and other financial instruments. Those interested in specializing in real estate finance will find Federal Taxation II particularly helpful, as it delves into the tax implications of real estate transactions.
Real Estate Agent
Real Estate Agents represent buyers and sellers in real estate transactions. They provide advice on property values, negotiate contracts, and help clients navigate the legal and financial aspects of buying and selling real estate. Taking Federal Taxation II can enhance your understanding of the tax implications of real estate transactions, providing you with a competitive edge in the industry.
Tax Manager
Tax Managers oversee tax planning and compliance for organizations. They ensure that organizations comply with tax laws and regulations, and they may also provide advice on tax-efficient business strategies. Enrolling in Federal Taxation II can equip you with the knowledge and skills you need to excel in this role by providing you with a deeper understanding of property transactions and their tax implications.
Financial Advisor
Financial Advisors provide individuals and families with financial planning advice, including retirement planning, investment management, and estate planning. The course can be useful for Financial Advisors who want to expand their knowledge of tax implications related to property transactions.
Real Estate Appraiser
Real Estate Appraisers determine the value of real property for various purposes, such as mortgages, insurance, and property taxes. Taking Federal Taxation II may be useful for Real Estate Appraisers who want to gain a deeper understanding of the tax implications of property transactions, which can be a valuable asset when preparing appraisals.
Loan Officer
Loan Officers originate and process loans for individuals and businesses. They analyze financial information, assess risks, and make lending decisions. Understanding the tax implications of property transactions can be beneficial for Loan Officers who work with real estate-secured loans.
Property Manager
Property Managers oversee the day-to-day operations of residential and commercial properties. They may be responsible for collecting rent, maintaining the property, and dealing with tenants. Federal Taxation II can be useful for Property Managers who want to better understand the tax implications of property transactions and property ownership.
Estate Planner
Estate Planners help individuals and families plan for the distribution of their assets after death. They may also provide advice on estate taxes and other tax implications of estate planning. Taking Federal Taxation II can be useful for Estate Planners who want to gain a deeper understanding of the tax implications of property transactions, which can be a valuable asset when advising clients.
Tax Preparer
Tax Preparers prepare individual and business tax returns. They may also provide advice on tax planning and compliance. Federal Taxation II can be useful for Tax Preparers who want to expand their knowledge of property transactions and their tax implications.
Investment Banker
Investment Bankers provide financial advice to corporations and governments on mergers and acquisitions, capital raising, and other financial transactions. Federal Taxation II may be useful for Investment Bankers who want to gain a deeper understanding of the tax implications of property transactions, which can be a valuable asset when advising clients on mergers and acquisitions.
Real Estate Broker
Real Estate Brokers oversee real estate transactions and represent buyers and sellers. They may also provide advice on real estate investments. Federal Taxation II can be useful for Real Estate Brokers who want to gain a deeper understanding of the tax implications of property transactions, which can be a valuable asset when advising clients on real estate investments.
Mortgage Broker
Mortgage Brokers originate and process mortgages for individuals and businesses. They analyze financial information, assess risks, and make lending decisions. Understanding the tax implications of property transactions can be beneficial for Mortgage Brokers who work with real estate-secured loans.
Real Estate Developer
Real Estate Developers acquire, develop, and sell real estate. They may also be involved in the construction and management of real estate projects. Federal Taxation II can be useful for Real Estate Developers who want to gain a deeper understanding of the tax implications of property transactions, which can be a valuable asset when structuring real estate deals.

Reading list

We've selected eight books that we think will supplement your learning. Use these to develop background knowledge, enrich your coursework, and gain a deeper understanding of the topics covered in Federal Taxation II: Property Transactions of Business Owners and Shareholders.
Is the official compilation of the Internal Revenue Code. It valuable resource for anyone who needs to research the tax laws.
Is the official compilation of the federal tax regulations. It valuable resource for anyone who needs to research the tax laws.
Provides a comprehensive overview of the taxation of corporations and shareholders. It covers a wide range of topics, including the formation and operation of corporations, the taxation of corporate distributions, and the taxation of shareholders.
Provides a comprehensive overview of the federal income tax laws as they apply to property transactions. It covers a wide range of topics, including the taxation of sales, exchanges, and other dispositions of property.
Provides a comprehensive overview of the federal income tax laws as they apply to real estate transactions. It covers a wide range of topics, including the taxation of sales, exchanges, and other dispositions of real property.
This journal leading source of information on tax law and policy. It publishes articles on a wide range of tax topics, including property transactions, corporate formations and reorganizations, and mergers and acquisitions.
Provides a comprehensive overview of the federal income taxation of individuals. It covers a wide range of topics, including the taxation of income, deductions, and credits.
This journal leading source of information on tax law and policy. It publishes articles on a wide range of tax topics, including property transactions, corporate formations and reorganizations, and mergers and acquisitions.

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