1040 Preparation and Planning 7: Other Income and Exclusions (2023)

Author: Barbara Weltman, Sidney Kess, Greg White

This CPE course, the seventh in the series, covers various types of income not discussed in other courses in this 1040 Preparation and Planning series, as well as exclusions from gross income. The course reflects changes made by the Consolidated Appropriations Act, 2022, the Inflation Reduction Act of 2022, and other tax legislation, IRS pronouncements, and court decisions. This course brings the tax preparer "up-to-speed" in preparing 2022 tax returns for the 2023 filing season.

Publication Date: September 2022

Designed For
Tax practitioners

Topics Covered

• Commercial Annuities
• General Rule
• Expected Return
• Cashing in Annuities
• Partial Annuitization
• Penalties on Early Distributions
• Employee Annuities
• Employee Annuities Commencing Before November 19, 1996
• IRA Distributions
• Reporting IRA Distributions
• Required Minimum Distributions
• Figuring RMDs
• Beneficiary Distributions
• Determining the Beneficiary
• Owner Dies after 2019
• Owner Dies before 2020 and on or after the Required Beginning Date
• Distributions over Owner's Remaining Life for a pre-2020 Death
• Owner Dies before 2020 and before the Required Beginning Date
• Special Rule for Roth IRAs
• Qualified Charitable Distributions
• Annual Exclusion for QCDs
• Qualified HSA Funding Distribution
• Losses on IRAs
• Roth IRAs
• Withholding on Annuities, Retirement Plans, and IRAs
• Exclusions in General
• Exclusions
• Gifts and Inheritances
• Insurance Proceeds
• Life Insurance
• Pre-Death Distributions and Loans from Modified Endowment Contracts
• Rules
• Accelerated Death Benefits
• Limitations and Conditions
• Endowment Policies
• Surrender of Life Insurance Policy
• Death Benefits Paid by an Employer
• Death Benefits Paid to Military Personnel
• Proceeds from Accident and Health Insurance Policies
• Sickness and Accident Benefits
• Rebates Resulting from the Medical Loss Ratio
• Disability Policies
• Higher Education Emergency Relief Fund Payments
• Provider Relief Fund Payments
• Casualty Insurance and Other Reimbursements
• Taxation of Reimbursed Living Expenses
• Scholarships and Fellowships
• Workers' Compensation
• Medicare
• Damages for Injuries and Claims
• Miscellaneous Income
• Reporting Income and Exclusions
• Common Inclusions and Exclusions from Gross Income
• Coverdell Education Savings Accounts
• Contributions to Coverdell ESAs
• Qualified Education Expenses for Purposes of Coverdell ESAs
• Distributions
• Reporting for Coverdell Education Savings Accounts
• Qualified Tuition Plans
• Gift Tax Consequences for Contributions to 529 Plans
• ABLE Accounts
• ABLE Account Advantages
• Miscellaneous Exclusions
• Disaster Relief and Mitigation Payments
• Foster Care Payments
• Difficulty-of-Care Payments
• Public Assistance
• Qualified Medicaid Waiver Payments
• Union Benefits

Learning Objectives

• Report income from a commercial annuity
• Calculate required minimum distributions (RMDs)
• Explain distribution rules for Roth IRAs
• State the withholding rules for distributions from qualified retirement plans and IRAs
• Explain the concept of an exclusion
• Describe the tax treatment of gifts and inheritances
• Distinguish between taxable and tax-free damages
• List miscellaneous income that is tax free
• Identify the penalty percent that applies to the earnings portion of a distribution from a commercial annuity taken prior to age 59½
• Identify the maximum annual exclusion for QCDs for each spouse filing a joint return
• Identify at what percent insurance payments for property damage covered by an insurance policy are taxable
• Identify the maximum annual contribution to a Coverdell ESA per designated beneficiary

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None