2017 NATIONAL INCOME TAX WORKBOOK™

2017 NATIONAL INCOME TAX WORKBOOK™

Editor

Lori B. Miller

Assistant Editor

Sonia Carter

Assistant Editor

Nina S. Collum

Associate Editor

Philip E. Harris

Land Grant University Tax Education Foundation, Inc.

FINAL COPYRIGHT 2017 LGUTEF

advice or opinions on specific facts or matters, and, accordingly, assume no liability whatsoever in connec-tion with its use or with future rulings that may affect the material presented. The information provided is for educational purposes only and nothing herein con-stitutes the provision of legal advice or services.

Editor Lori B. MillerAssistant Editor Sonia CarterAssistant Editor Nina S. CollumAssociate Editor Philip E. HarrisManaging Editor Robert P. Achenbach, Jr.Production Editor/Page Layout Foti Kutil, Foti Publishing SolutionsCopy Editing Gabriela FultonIndexer Gabriela FultonProject Assistant Margaret HennenPrinter Integ, Inc., Waco, TX

2017 National Income Tax Workbook™

©Copyright 2017 by Land Grant University Tax Education Foundation, Inc.

All rights reserved. No part of this book shall be repro-duced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the publisher.Land Grant UniversityTax Education Foundation, Inc.735 N. Maple Hill RoadKelso, WA 98626www.taxworkbook.comPrinted in the United States of AmericaFirst Printing: September 2017

Warning and DisclaimerThis publication is distributed with the understand-ing that the authors, publisher, and distributor are not rendering legal, accounting, IRS, or other professional

J C. Hobbs, Chair

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Land Grant University Tax Education Foundation, Inc. Officers and Directors


CONTENTS

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Editors, Authors, Reviewers, and Contributors . . . . . . . . . . vii

Cooperating Schools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xiv

1 Ethics, Part 1 (Confidentiality, Privilege, and Client Records) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2 Like-Kind Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

3 Loss Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

4 Trusts and Estates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

5 Ethics, Part 2 (Cybersecurity) . . . . . . . . . . . . . . . . . . . . . 153

6 Business Entity Issues . . . . . . . . . . . . . . . . . . . . . . . . . . 171

7 IRS Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205

8 Business Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

9 Retirement Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289

10 Individual Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327

11 Agricultural and Natural Resource Issues . . . . . . . . . . . 391

12 Foreign Tax Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435

13 New and Expiring Legislation . . . . . . . . . . . . . . . . . . . . 445

14 Tax Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505

15 Rulings and Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 551

16 Tax Rates and Useful Tables . . . . . . . . . . . . . . . . . . . . . 623

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655

CD-ROM Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 671


Corrections for all chapters and the 2017 National Income Tax Workbook Update ( January 2018) are posted as they become available at www.taxworkbook.com (user name: class2017; password: class2017).


v

INTRODUCTION

While anticipated new legislation for 2017 has not been enacted as of the date of publication, the 2017 National Income Tax Workbook explains important new developments implemented by regulations and procedures. It also focuses on tax issues that practitioners will encounter in prepar-ing 2017 returns for individual and business tax-payers, and trusts and estates.

The “Ethics, Part 1” chapter reviews impor-tant confidentiality and nondisclosure obliga-tions. It explains when and how to assert a tax practitioner-client privilege. In addition, the chapter reviews confidentiality and nondisclo-sure considerations when hiring independent contractors; when the tax practitioner suspects fraud or criminal activity; and when a tax practi-tioner sells, transfers, or discontinues a tax prac-tice. It includes 10 case studies to illustrate how to handle real-life ethical issues.

The “Like-Kind Exchanges” chapter explains how to structure a like-kind exchange to defer recognition of gain on the sale of property. It reviews when a taxpayer can exchange a vaca-tion residence, and other types of real property interests such as easements, long-term leaseholds, and undivided fractional interests. It includes comprehensive examples of reporting like-kind exchanges, including an exchange with an install-ment sale.

v

The “Loss Limitations” chapter uses the analogy of a baseball diamond to show the steps to determine whether a loss or a deduction is allowed. It provides a comprehensive review of hobby and vacation home loss limitations, basis limits, the at-risk and passive activity loss limits, and capital loss limits. It also explains the net operating loss (NOL) rules, and when the taxpayer can use a NOL from one tax year as a deduction in another year.

The “Trusts and Estates” chapter discusses electing portability of a decedent’s estate and gift tax exemption, including how to advise a taxpayer about whether to make the election or opt out. It explains the rules that require consis-tency between a recipient’s basis in certain prop-erty acquired from a decedent and the value of the property as finally determined for federal estate tax purposes. Finally, this chapter reviews key tax and nontax provisions of 10 types of trusts that a tax practitioner may commonly encounter.

The “Ethics, Part 2” chapter discusses the risk of a cyberattack; types of cybersecurity breaches; and how to protect computers, networks, pro-grams, and data from a cyberattack. It reviews the costs of a breach and details how a business can reduce those costs by adopting a response plan and carrying cybersecurity insurance.


reporting of alternative minimum tax and original issue discount. Finally, this chapter examines spe-cial tax rules for taxpayers in federally declared disaster areas and military taxpayers.

The “Agricultural Issues” chapter reviews income and expense issues that are unique to farmers, including the reporting of various types of farm income and expenses. It discusses the interaction between the net operating loss (NOL) rules and the farm income averaging rules, and reviews the extended NOL carryback periods that may be available to farmers. This chapter also discusses the calculation of gain on the sale of farmland and the impact of selling farmland that is subject to a Conservation Reserve Pro-gram (CRP) contract. It also reviews the tax con-sequences of leasing real and personal property and the tax consequences of demolished or aban-doned structures. Finally, this chapter explains how to report loss or gain on the sale of converted wetlands.

The “Foreign Tax Issues” chapter looks at reporting and withholding obligations that impact US taxpayers with income or assets abroad, or foreign individuals with US income or assets. It discusses the requirements for a taxpayer to claim the foreign income exclusion or the foreign hous-ing exclusion or deduction, and it explains how and when a nonresident alien spouse can elect to be treated as a US resident. Finally, this chapter briefly describes new reporting and recordkeep-ing requirements that apply to single-member limited liability companies (LLCs) taxed as a dis-regarded entity if the sole member of the LLC is a foreign person.

The “Tax Practice” chapter explains the substitute for a return and when and how a tax-payer should file a superseding return to replace a previously filed return. It explains how to help a nonfiler to file past-due returns, and how to reconstruct the records that are necessary to file the delinquent returns. This chapter covers three important collection issues: the collection statute of limitations and the events that suspend the run-ning of the statute; when a transferee, nominee, or alter ego of the taxpayer (or the taxpayer’s assets) is liable for the taxpayer’s tax liability; and how to determine if a taxpayer is eligible for an offer in compromise, and how the taxpayer calculate the minimum offer amount.

The “New and Expiring Legislation” chap-ter describes tax laws and regulations that were

The “Business Entity Issues” chapter explains how homeowners’ associations report and pay tax. It reviews two recent developments for non-profit organizations: the new IRS information document request procedure and the new Form 990-EZ. It also includes two important topics for partnerships: the new proposed partnership audit regulations, and the consequences of a change in partnership ownership, such as the change from a disregarded entity to a partnership, or from a partnership to a disregarded entity.

The “IRS Issues” chapter describes the recent use of private debt collection agencies to collect federal tax debts; and how to use the IRS audit technique guides to prepare complex tax returns, avoid an audit, or respond to an audit. It discusses identity theft, IRS e-Services tools, and the cur-rent status of the PTIN registration system follow-ing a court decision that prohibits the IRS from charging a fee for a PTIN.

The “Business Issues” chapter reviews when taxpayers engaged in a joint activity have cre-ated a partnership and when they can elect out of partnership treatment under subchapter K. It explains the deduction and amortization of business start-up and organizational expenses, expensing improvements to real property under the de minimis safe harbor and the qualified property improvement rules, depreciation, and the rules for claiming a domestic production activities deduction. This chapter also discusses guidance from the IRS on the taxation of mari-juana and commercial hemp businesses.

The “Retirement Issues” chapter discusses the taxation of retirement plan distributions, early distributions, and required minimum distri-butions. It explains how earned income impacts social security benefits and how income affects Medicare premiums. It also discusses different types of retirement plans, including defined ben-efit plans, defined contribution plans, and IRA-based plans.

The “Individual Issues” chapter details cur-rent developments under the Affordable Care Act (ACA). It explains the net investment income tax and how to calculate the tax, and discusses the tax consequences of providing or receiving shar-ing economy services. This chapter also explains qualifying charitable contributions, substantia-tion of contributions, limits on contributions, and how to report contributions on an individual income tax return. It explains the calculation and

vi INTRODUCTION


Editors vii

issued late in 2016 and in 2017. It also reports notices and procedures issued to provide guid-ance and clarification on recently enacted legisla-tion. It lists the expiration dates of tax provisions that expired in 2016 or are set to expire in 2017–2026. This chapter also includes reminders of prior-year legislation that takes effect or applies for the first time in 2017.

As always, the “Rulings and Cases” chapter summarizes court cases, new regulations, and IRS pronouncements that have been published since the 2016 book.

The “Tax Rates and Useful Tables” chapter provides a quick reference for the 2016, 2017, and 2018 tax years (to the extent that 2018 infor-mation is available).

The Land Grant University Tax Education Foundation, Inc. is pleased to provide this book to about 29,000 tax practitioners in tax schools taught in 32 states.

Lori B. MillerSonia Carter

Nina S. CollumPhilip E. Harris

Editors

EDITORS

LORI B. MILLERLori B. Miller, JD, LL.M in taxation, is an attorney in Whitefish, Montana. She is also licensed to prac-tice in California and Washington. Her legal practice emphasizes tax law, estate planning, and business law. She is the lead editor of the 2017 National Income Tax Workbook. She wrote the “Ethics, Part 1” chapter and the “New and Expiring Legislation” chapter, and she coauthored the “Business Issues” chapter, the “Agri-cultural and Natural Resource Issues” chapter, and several other chapters in the book.

SONIA CARTERSonia Carter, CPA, is a public accountant in Kalispell, Montana. She earned her master’s of accountancy from the University of Montana. Her work in account-ing focuses on the areas of individual, business, and nonprofit taxation. She wrote the “IRS Issues” chapter and coauthored the “Business Entity Issues” chapter. Sonia is the assistant editor of the 2017 National Income Tax Workbook.

NINA S. COLLUMNina S. Collum, PhD, CPA, is an assistant profes-sor in the School of Accountancy at Louisiana Tech University. She has previously written chapters on automobiles, construction contractors, natural resources, AMT, recapture, real estate issues, divorce, estate and gift taxes, trade or business, and related party issues, and she has assisted in the workbook edit-ing process since 2005. Nina is the assistant editor of the 2017 National Income Tax Workbook.

PHILIP E. HARRIS Philip E. Harris is an emeritus professor in the Depart-ment of Agricultural and Applied Economics at the University of Wisconsin-Madison/Extension, where he researched and taught farm tax and business plan-ning. Phil coauthored chapters of the Farm Income Tax Workbook from 1980 through 1998, when he became the lead author and editor of that book. He was the lead author and editor of the National Income Tax Work-book from 2002 through 2015. Phil is the associate edi-tor of the 2017 National Income Tax Workbook.


viii AUTHORS

the “Like-Kind Exchanges” chapter and coauthored the “Agricultural and Natural Resource Issues” and “Business Issues” chapters of the 2017 National Income Tax Workbook.

CHARLES CUYKENDALLCharles Cuykendall is retired from Cornell University in Ithaca, New York, where he was the income tax educational program director. He has been an instruc-tor at the New York Income Tax Schools for the past 20 years. He specializes in tax law pertaining to small businesses and agriculture. Charlie is the author of the “Tax Rates and Useful Tables” chapter of the 2017 National Income Tax Workbook. He has also reviewed all the chapters of this book for mathematical accuracy.

THEODORE A. FEITSHANSTheodore A. Feitshans, JD, is an extension profes-sor emeritus in the Department of Agricultural and Resource Economics at North Carolina State Univer-sity. Ted has authored or coauthored chapters of the Farm Income Tax Workbook from 2004 through 2016. He teaches courses in agricultural law and environmental law in the department’s undergraduate program and has taught estate planning and farm transition in the North Carolina Cooperative Extension program. Ted authored the “Trusts and Estates” chapter of the 2017 National Income Tax Workbook.

CHRISTOPHER F. HAWTHORNEChris Hawthorne, CPCU, CIC, LIA, is a licensed insurance broker and advisor representing Cleary Insurance located in Boston, Massachusetts. He specializes in the coordination of commercial and personal insurance programs for business owners, including tax and accounting professionals. He is an annual presenter for the University of Massachusetts Tax School for Practitioners and Salem State Univer-sity’s Continuing Education Institute for Accountants. Chris wrote the “Ethics, Part 2: Cybersecurity” chap-ter of the 2017 National Income Tax Workbook.

C. ROBERT HOLCOMBRob Holcomb is an enrolled agent who has been an extension educator with the University of Minnesota since 2004. Rob works on the development and deliv-ery of educational programs in the area of agricultural risk management, with emphasis on farm analysis, business planning, and taxation. Rob has been an instructor for the Minnesota Income Tax Short Course since 2010, and in 2011, he began serving as the tax school faculty director. Rob coauthored the “Busi-ness Issues” and “Agricultural and Natural Resource

AUTHORS

ROBERT P. ACHENBACH, JR.Robert Achenbach, JD, is the chief administrative offi-cer of the Land Grant University Tax Education Foun-dation (LGUTEF) and co-owner of the Agricultural Law Press, for which he works as the publisher, writer, and editor of the biweekly newsletter Agricultural Law Digest, the Agricultural Law Manual, and Harl Farm Estate and Business Planning. Robert has been a writer and editor for the 14-volume treatise Harl, Agricultural Law (Matthew Bender) for over 36 years. He wrote the “Rulings and Cases” chapter of the 2017 National Income Tax Workbook.

SETH ANDERSONSeth E. Anderson is in private practice as a principal of Birch Tree Tax, LLC, located in Shelburne, Vermont. His practice focuses on the areas of individual tax prep-aration, business tax preparation, and financial analy-sis/planning for individuals and small businesses. He is an enrolled agent and coordinator of the University of Vermont Extension Income Tax Schools. Seth was one of the authors for the “Individual Issues” chapter of the 2017 National Income Tax Workbook.

KARI A. APELKari A. Apel, CPA, is the CEO and founder of Apel Associates, Inc. and Apel Financial Group of Prairie du Sac and Johnson Creek, Wisconsin, specializing in business, agricultural, and individual tax and financial needs across generational aspects. Kari has coauthored and edited several tax and accounting publications, including the US Department of Agriculture Farm Tax Management publication and multiple National Income Tax Workbooks. Kari specializes in small business and agricultural management, from tax law to strategic business planning. Apel Associates was named among the top three of the community’s small businesses of the year for 3 of the past 5 years, and Kari was awarded the Outstanding Alumni Award from her alma mater University of Wisconsin-Platteville. Kari coauthored the “Individual Issues” chapter of the 2017 National Income Tax Workbook.

GREGORY J. BOUCHARDGregory J. Bouchard is the director of the Cornell Uni-versity income tax schools. He was formerly employed as a senior business consultant for Farm Credit East, ACA, where he was responsible for tax training as well as consulting directly with clients regarding their estate and business plans. Farm Credit is a major provider of tax services, and Greg’s specialty is partnership taxa-tion. He has been an instructor for the New York State Income Tax Schools for the last 19 years. Greg wrote


Authors ix

CPAs, LLC, located in Pittsford, New York, a provider of financial, tax, and advisory services to the small and medium market. He has more than 20 years of expe-rience in providing personalized financial, tax, and advisory services to closely held businesses and their owners, specializing in the agriculture, medical, real estate, and construction industries. He is an alumnus of the Leadership Academy of the New York State Soci-ety of CPAs and is a member of the American Institute of CPAs and New York State Society of CPAs. He is also a certified John Maxwell Team trainer and coach. Norm contributed to the “Business Issues” chapter of the 2017 National Income Tax Workbook.

CLAUDE R. SCHWESIGClaude R. Schwesig, CPA, BComm, is a shareholder of Herrick Ltd., CPAs in Burlington, Vermont. His focus is on US compliance issues when dealing with foreign income and activities, including US citizens living abroad and foreign nationals with tax obliga-tions in this country, and Canadian tax compliance and reporting for US citizens living in Canada. While many of his clients are in Canada, he serves others in over 30 countries worldwide. He is also an instruc-tor for the University of Vermont Tax School and an independent presenter of seminars related to foreign tax matters. Claude wrote the “Foreign Tax Issues” chapter of the 2017 National Income Tax Workbook. TERESA STEPHENSONTeresa Stephenson, CMA, MPA, PhD, is an associ-ate professor of accounting at the University of South Dakota. She has taught accounting and taxation at several schools including University of Wyoming, Indiana University, and University of Kentucky. She has over 25 publications appearing in journals such as the CPA Journal; Accounting Horizons; Advances in Taxa-tion; Tax Notes; Practical Tax Strategies; Strategic Finance; Journal of Legal, Ethical, and Regulatory Issues; Journal of Business Ethics; and Journal of Accounting Education. She is also a coauthor of Multistate Tax Guide to Pass-through Entities, published annually by CCH, Inc. She serves as an editorial review editor for the Journal of Account-ing Education and the IMA Educational Case Journal, as well as an ad hoc reviewer for other academic outlets. Teresa contributed to the “Individual Issues” chapter of the 2017 National Income Tax Workbook.

KRISTINE TIDGRENKristine Tidgren, JD, is the assistant director of the Center for Agricultural Law & Taxation at Iowa State University. She is a frequent writer and speaker on agricultural law and taxation topics and has authored chapters for Iowa’s past tax school workbooks. Kris-tine is an instructor for the Iowa Federal Income Tax Schools and a lecturer in ISU’s College of Agricul-ture. Kristine coauthored the “Individual Issues” and

Issues” chapters and reviewed the “Agricultural and Natural Resource Issues” chapter of the 2017 National Income Tax Workbook.

ROBERT W. JAMISONRobert W. Jamison, CPA, PhD, is professor emeritus of accounting at Indiana University, Purdue University, Indianapolis (IUPUI). His principal area of specializa-tion is S corporations. He is the author of S Corporation Taxation and coauthor of Multistate Tax Guide to Pass-Through Entities, both of which are published annually by CCH, a Wolters Kluwer business. He is curator of Wolters Kluwer Answerconnect topic “S Corpora-tions” and subtopics thereunder. He is a regular con-tributor to the National Income Tax Workbook and has contributed to the Federal Tax Workshop. He pres-ents advanced and update S corporation seminars for CPA societies and other professional organizations. Bob resides in Leesburg, Virginia. He is a member of the AICPA S Corporation Technical Resource Panel and the Washington, DC–based S Corporation Study Group. He consults on S corporation and other busi-ness entity problems. Bob wrote the “Loss Limitations” chapter of the 2017 National Income Tax Workbook and reviewed the “Business Entity Issues” chapter.

WILLIAM T. KRIESELWilliam T. Kriesel, CPA/PFS, CFP®, AEP®, is part-ner-in-charge: financial planning in the regional New York firm Bowers & Company, CPAs, PLLC. Bill has been a presenter on many tax topics, particularly as related to partnership taxation and advanced asset transfer techniques. He has authored four published articles, each appearing in the CPA Journal. He has been a reviewer and author in previous years for the National Income Tax Workbook, and he contributed to the “Business Entity Issues” chapter and wrote the “Retirement Issues” chapter of the 2017 National Income Tax Workbook.

KRISTY MAITREKristy S. Maitre is a tax specialist with the Center for Agricultural Law and Taxation at Iowa State Univer-sity in Ames, Iowa. Kristy serves as a resource for tax professionals and assists with IRS matters. A former Internal Revenue Service employee with 27 years of experience, she left the service in 2014. She now teaches at the Annual Farm and Urban Tax Schools in their forty-third year and conducts webinars, including the twice-a-month “Scoop,” to keep tax professionals up to date on current issues. Kristy contributed to the “Business Issues” chapter of the 2017 National Income Tax Workbook.

NORMAN A. PROVVIDENZANorman A. Provvidenza, CPA, CGMA, is cofounder and a managing member of Provvidenza & Wright


x AUTHORS

DANIEL S. WELYTOKDaniel S. Welytok is a shareholder in the Milwaukee office of von Briesen & Roper, s.c., where he practices in the areas of exempt organizations and employee plans, including nonprofit organization and planning, 501(c) operational issues, lobbying and compensation practices, income reporting and recognition issues, cooperative and membership associations, federal and state tax issues, and tax controversy. He is the coauthor of Nonprofit Law and Governance for Dummies, a contributing author to the Wisconsin Guide to Nonprof-its, past editorial board member of the American Bar Association’s Tax Lawyer, and editorial board mem-ber of The Cooperative Accountant. Dan has served in various leadership roles in the American Bar Associa-tion as well as state and local bar associations, and is a past chair of the Great Lakes Area liaison group with the Tax Exempt/Government Entities Division of the Internal Revenue Service. Dan contributed to the “Business Entity Issues” chapter of the 2017 National Income Tax Workbook.

“Agricultural and Natural Resource Issues” chapters of the 2017 National Income Tax Workbook. She also reviewed the “New and Expiring Legislation” chapter.

PATRICIA UGOROWSKITrish Ugorowski retired from the IRS in 2012. During the last 5 years before her retirement, she served as a Large Business and International (LB&I) partnership technical adviser, providing guidance to IRS employ-ees on partnership, passive activity, and at-risk issues. Throughout her career, Trish was involved in training development and delivery for the IRS, the Michigan State University Tax Schools, and Lansing Commu-nity College. She is currently an enrolled agent. Trish is a coauthor of the “Individual Issues” chapter and the author of the “Tax Practice” chapter, and she contrib-uted to the “New and Expiring Legislation” chapter of the 2017 National Income Tax Workbook.

REVIEWERS

RICHARD J. BEASONRichard J. Beason, CPA, has been in public practice specializing in taxation for over 40 years and was pre-viously with the Internal Revenue Service for 2 years. He also holds the AICPA’s designations of CITP, CGMA, and PFS. He has been an instructor with the Virginia Tech Income Tax School since 2005. Rick reviewed the “New and Expiring Legislation” chapter of the 2017 National Income Tax Workbook.

CHRIS BIRDChris Bird is a national lecturer on individual income, corporate income, and real estate tax issues. His back-ground includes more than 17 years of experience as an IRS agent in St. Louis, Missouri, and Springfield, Illinois, serving as a field agent, a branch manager, and a training director. He is a certified financial plan-ner and is enrolled to practice before the IRS (EA). Chris has taught preparation courses for the registered tax return preparer and the enrolled agent examina-tions as well as courses on the Affordable Care Act. Chris previously was a contributor to the University of Illinois Tax School workbook and an instructor at the school’s seminars throughout Illinois. He uses the National Income Tax Workbook to conduct semi-nars involving more than 1,600 participants annually. Chris reviewed the “Like-Kind Exchanges” chapter of the 2017 National Income Tax Workbook.

JAMES BLANDFORDJames Blandford, CPA, is president of Klump & Blandford, PSC, a certified public accounting firm; and a managing member of Blandford Wealth Man-agement, LLC, a registered investment adviser—both located in Louisville, Kentucky. His practice provides tax, accounting, consulting, and financial planning ser-vices to individuals and closely held businesses. He is also an instructor for the University of Kentucky Income Tax Seminar Program. James reviewed the “Ethics, Part 2” chapter of the 2017 National Income Tax Workbook.

JAMES R. BREWERJames R. Brewer, CPA, MBA, is president of J & M Tax and Accounting, Inc., a CPA firm located in Law-renceburg, Tennessee. His firm is primarily devoted to income tax and bookkeeping for small businesses. Jim has been preparing taxes for 40 years, has been an accounting instructor for Columbia State Community College, and has been an instructor for the income tax schools sponsored by the University of Tennessee and Tennessee Farm Bureau since 2010. Jim reviewed the “Loss Limitations” and “Retirement Issues” chapters of the 2017 National Income Tax Workbook.

TEDDAR S. BROOKSTeddar S. Brooks is an attorney and senior partner of Brooks & Brooks, LLP in Little Valley, New York.


Reviewers xi

areas of interest include farm management, farm tran-sition planning, and income tax issues. J C. reviewed the “Agricultural and Natural Resource Issues” chap-ter of the 2017 National Income Tax Workbook.

JOHN A. JACOBSJohn A. Jacobs, CPA, retired from the Large Business and International Division of the IRS after 26 years of distinguished government service. His involvement with various projects and programs during his career afforded him the opportunity to present classroom training to revenue agents, present the government’s position before Appeals, and participate in GAO audits. Prior to his IRS career, John worked in the oil field services, manufacturing industry, and in public accounting. He received his accounting degree from the University of Saint Thomas in Houston, Texas, and is a member of the AICPA and TSCPA. John is also an instructor with the tax practitioner workshops in Texas. John reviewed the “Ethics, Part 2” chapter of the 2017 National Income Tax Workbook.

WILLIAM R. KLUMPWilliam R. Klump, CPA, formerly a shareholder in Klump & Blandford, PSC is a consultant primarily devoting his time to federal and Kentucky state income taxes. He has been an instructor for the income tax seminars sponsored by the University of Kentucky since 1997 and an instructor for the income tax semi-nars sponsored by Auburn University in Arkansas since 2013. Bill has participated in editing sessions for the National Income Tax Workbook for 16 years. He reviewed the “Business Issues” chapter of the 2017 National Income Tax Workbook.

EDITH F. MOATESEdith Moates, CPA, JD, retired from the IRS in 2006 and is in private practice with Moates & Associates, a tax-oriented legal and accounting firm located in Norman, Oklahoma. She represents numerous clients before the IRS Appeals Office and the US Tax Court. She has instructed the Oklahoma State University Tax Institutes since 1985 and has edited and reviewed numerous income tax chapters over the years. Edith reviewed the “Ethics, Part 1” chapter of the 2017 National Income Tax Workbook.

KELLY H. MYERSKelly H. Myers, MBA (with emphasis in accounting), is a tax professional in Huntsville, Alabama, provid-ing services via Myers Consulting Group, LLC. Upon his departure from the IRS in December 2017, he will direct his full-time efforts to providing a range of tax services to include lecturing, writing, contro-versy, litigation support, and tax planning. Kelly’s tax experience spans four decades, including 30 years with the IRS with the past 18 years as a senior

He concentrates his legal practice in the areas of trust and estate administration and tax and estate plan-ning. He is a frequent lecturer in the areas of trust and estate planning and administration and has written the TEdec Fiduciary Accounting System, a computerized program for the administration of trusts and estates. Teddar reviewed the “Trusts and Estates” chapter of the 2017 National Income Tax Workbook.

MICHAEL FERGUSONMichael Ferguson, CPA/PFS, CFP®, practices in Guntersville, Alabama, with a focus on financial plan-ning and taxation. He graduated from Mississippi State University with a bachelor’s in professional accoun-tancy in May 1985. Michael reviewed the “Tax Prac-tice” chapter of the 2017 National Income Tax Workbook.

RAY FLUEGEMAN Ray Fluegemen is a registered CPA and an IRS reve-nue agent fraud adviser. Over his 35 years with the IRS, he has instructed numerous training classes regarding income tax law for individuals and businesses. He is a former instructor of the Michigan State University income tax schools and Lansing Community College. Ray reviewed the “Foreign Tax Issues” chapter of the 2017 National Income Tax Workbook.

L. LEON GEYERLeon Geyer is a professor of agricultural and environ-mental law at Virginia Tech. He has been the director of the Virginia Tech Income Tax Schools for 23 years and teaches the farm tax section in the schools. He has both written and reviewed chapters for the National Income Tax Workbook in the past. Leon reviewed the “Ethics, Part 1” chapter of the 2017 National Income Tax Workbook.

SUSAN HARPERSusan Harper, treasurer of Pennsylvania Tax Insti-tutes, Inc. (PTI), is an instructor of the National Income Tax Workbook for both PTI (since 2004) and West Vir-ginia University (since 2000). Prior to PTI, she also instructed for Virginia Tech. She uses the National Income Tax Workbook to conduct seminars involving more than 1,500 students each year. Susan is also a fraud technical adviser, revenue agent for the IRS, where she has been employed since 1988. Prior to becoming an FTA, Susan served as a revenue agent in abusive-tax-avoidance transactions. She reviewed the “IRS Issues” chapter of the 2017 National Income Tax Workbook.

J C. HOBBSJ C. Hobbs is an extension specialist in the Depart-ment of Agricultural Economics at Oklahoma State University. He is the coordinator as well as an instruc-tor for the OSU Farm and Business Tax Institutes. His


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David A. Sutherland, CPA, is associated with the accounting firm of Junkermier, Clark, Campanella & Stevens, PC (JCCS) in Kalispell, Montana. Dave has over 30 years of experience in public accounting and has developed a niche practice working with interna-tional tax clients. He is a former member of the board of directors of the Montana Society of Certified Public Accountants and a former chair of their Continuing Professional Education Committee. Dave reviewed the “Foreign Tax Issues” chapter of the 2017 National Income Tax Workbook.

GUIDO VAN DER HOEVENGuido van der Hoeven is an extension specialist/senior lecturer for the Department of Agricultural and Resource Economics at North Carolina State University in Raleigh. He is also the director of the North Carolina Income Tax School and is enrolled to practice before the IRS as an enrolled agent. He has instructed in the 2-day intermediate tax school as well as in several 8-hour introductory and agricultural tax programs across North Carolina and six other states. Guido reviewed the “Agricultural and Natural Resource Issues” chapter of the 2017 National Income Tax Workbook.

WILL R. WALLACE, JR.Will R. Wallace, Jr., EA, MBA, NTPI fellow, is a certi-fied navigator in Lincoln, Nebraska. He assists low- to moderate-income taxpayers file their taxes, reply to IRS notices, and apply for health insurance through the Marketplace. Will reviewed the “Individual Issues” chapter in the 2017 National Income Tax Workbook.

ELLEN WALZEllen L. Walz has worked for Southwest Accounting, Inc. in Lancaster, Wisconsin, since 1994. She is an enrolled agent and specializes in partnership income taxes and information returns. Ellen reviewed the “Individual Issues” chapter of the 2017 National Income Tax Workbook.

SHIRLEY A. WOFFRDShirley Wofford, CPA, JD, retired from the IRS in September 2005, and is in private practice. Her prac-tice includes representing clients before IRS Exami-nation Division, IRS Appeals Office, US Tax Court, and US District Court. She has been an instructor for the Oklahoma State Tax Institute since 2011. She reviewed the “Business Issues” chapter of the 2017 National Income Tax Workbook.

CAROL GREGORY WRIGHTCarol Wright, CPA, lectures on partnership taxa-tion and has taught at Michigan State University Income Tax Schools for over 16 years. Her IRS career covered 36 years from tax auditor to senior

technical adviser for the National Office in Washing-ton, DC. Kelly supports all operating divisions in the IRS, including Chief Counsel on formal guidance and Field Counsel for litigation support. Kelly has spoken numerous years at the IRS Nationwide Tax Forum and other professional groups. Kelly was an instruc-tor for Auburn University’s 2-Day Tax Professional Seminar in 2016. (Note: Kelly’s engagement with LGUTEF and Auburn University is in his personal capacity and is not in connection with his official duties as an IRS employee.) Kelly reviewed the “Loss Limitations,” “IRS Issues,” and “Tax Practice” chap-ters of the 2017 National Income Tax Workbook. He also edited the “Business Issues” chapter.

ERIC NELSONEric Nelson is the president of the Eden Prairie, Min-nesota–based accounting firm Eric R. Nelson CPA, LLC. He is a CPA with a master’s degree in business taxation. Eric has been working with start-ups, small businesses, Fortune 500 companies, and individu-als for more than 22 years. Eric has been a presenter for courses offered through the Minnesota Society of CPAs, University of Minnesota College of Continu-ing Education, and the Minnesota Society of Enrolled Agents. Eric reviewed the “Trusts and Estates” chapter of the 2017 National Income Tax Workbook.

MARK RIBASMark Ribas was employed by the IRS for 38 years as a revenue agent assigned to the Large Business and International Division, where he conducted exami-nations of large corporations and partnerships. Mark is a CPA and has served as an adjunct professor of accounting for Fairmont State University for several years. During the past 16 years, he has served as an instructor at the Virginia Tech, Texas A&M, and West Virginia University Income Tax Schools. Mark cur-rently is the president of Pennsylvania Tax Institutes, Inc., which conducts income tax seminars throughout the states of Pennsylvania, New Jersey, and Delaware. Mark reviewed the “Business Entity Issues” chapter of the 2017 National Income Tax Workbook.

SUSAN SCIOLISusan Scioli is an enrolled agent and a principal of Scioli & Associates, PC, a tax firm specializing in compliance representation and advocacy in Saginaw, Michigan. Susan worked for the IRS as a senior tax specialist in the education division for 11 years. She has been an instructor at the income tax schools spon-sored by Michigan State University for 16 years and at Cornell University for 5 years, and now teaches around the country. Susan reviewed the “Like-Kind Exchanges” chapter of the 2017 National Income Tax Workbook.DAVID SUTHERLAND


Contributors xiii

Michigan State University Tax School and a frequent speaker for other tax, accounting, and financial plan-ning organizations. Mary Jane was a contributor to the editing sessions for the 2015 through 2017 National Income Tax Workbooks.

JOHN JONESJohn Jones is a faculty member of the Department of Agricultural, Food, and Resource Economics at Michigan State University. He is the manager of the Michigan State University (MSU) Telfarm Center and is co-coordinator of the Michigan State University (MSU) Income Tax School. His work concentrates on the capture and analysis of farm management data in the areas of farm records, farm and income tax man-agement, and economic intelligence.

F. JOHN SCHIFFERLIF. John Schifferli is a principal with Provvidenza & Wright, CPAs, in Pittsford, New York. He has been with Cornell University’s In-Depth Tax School, one of New York State’s largest tax schools, for the past 30 years, and is the senior instructor. John specializes in trusts and estates.

CONNIE SMOTEKConnie Smotek is an extension program specialist in the Department of Agricultural Economics at Texas A&M University. She has planned and coordinated numerous continuing education programs for tax professionals since 2001. In addition, Connie pro-vided administrative support to LGUTEF from 2002 through February 2009.

ALAN SPENCERAlan Spencer is a program developer of outreach programs in the Office of Professional and Continu-ing Education at Auburn University. He plans and facilitates numerous programs, courses, and confer-ences throughout the year. He began working with LGUTEF this year. He assists Claire Twardy with the Auburn University Accounting and Tax Train-ing Institute tax professional seminars in the states of

team coordinator. While there, she taught all phases of training for agents. She developed several courses and coordinated partnership and tax shelter training. She authored “IRS Income Tax Audits” for the fifth edition of Tools and Techniques of Income Tax Planning in 2016. Carol reviewed the “Loss Limitations” and “Retirement Issues” chapters of the 2017 National Income Tax Workbook.

CONTRIBUTORS

LARRY BORTONLarry Borton is the retired manager of the Michigan State University (MSU) Telfarm Center and is the co-coordinator of the MSU Tax School for the Depart-ment of Agricultural, Food, and Resource Economics. He specializes in agricultural economics and agricul-tural engineering.

MARK BURCHMark D. Burch is an enrolled agent and managing principal of Burch & Associates, Inc., located in Lin-coln, Nebraska. The family owned tax practice was established in 1971, and he joined his father in busi-ness in 1985 before graduating from of the University of Nebraska College of Business Administration in 1989. His practice focuses on local and regional small businesses and individual tax preparation and repre-sentation. He takes great pride in developing strong and caring relationships with clients and delivering high-level service. Developing staff and utilizing tech-nology along with practice management are areas of great importance to him. In 2013, Mark joined the University of Nebraska Tax Institute, where he is cur-rently the senior lead instructor.

CLARK GARLANDClark D. Garland is professor emeritus in the Agricul-tural and Resource Economics Department at the Uni-versity of Tennessee. Prior to his retirement in 2011, he served on the University of Tennessee faculty for 40 years with responsibilities in extension, special-izing in agricultural finance. He has been director of the University of Tennessee Income Tax Seminars for more than 20 years.

MARY JANE HOURANIMary Jane Hourani, MM, EA, NTPI fellow, has been practicing since 1993; her experience not only includes taxation of business and individuals, but also reconstruction of books and records, tax audit, analysis and consultation, as well as litigation support. Mary Jane is an enrolled agent with the IRS, allow-ing her to practice before all units of the IRS, except Tax Court litigation. She is an instructor of tax for


xiv CONTRIBUTORS

professional education programs/conferences and continuing education accreditation standards, poli-cies, and procedures. She began working with LGUTEF in 2009, when she assumed responsibility for the Nebraska Federal & State Income Tax Insti-tutes, with sites across the state of Nebraska, now in its sixty-second year.

BARRY WARDBarry Ward is currently leader, production business management, and assistant professor in the College of Food, Agriculture, and Environmental Sciences at Ohio State University (OSU). He serves as director of OSU Income Tax Schools and provides leadership for OSU Extension programs that provide managers of agricultural production businesses with tools, informa-tion, and analysis to manage their firms. He delivers educational programs for extension educators and industry clientele, conducts applied research, trains extension staff, and teaches undergraduate courses in farm business management.

Alabama, Arkansas, Georgia, Florida, Louisiana, and Nevada.

CLAIRE TWARDYClaire Twardy is the assistant director of conferences and professional programs at the Office of Professional and Continuing Education at Auburn University. She plans and facilitates numerous programs, courses, and conferences throughout the year. She began working with LGUTEF in 2007, when she assumed responsi-bility for the Auburn University Accounting and Tax Training Institute tax professional seminars in the states of Alabama, Arkansas, Florida, Georgia, Louisi-ana, and Nevada. She graduated from the University of Georgia with a BFA in graphic design.

VIRGINIA UZENDOSKIVirginia Uzendoski is the senior assistant director of professional programs in the College of Business at the University of Nebraska–Lincoln. She oversees the development and management of distance learning

COOPERATING SCHOOLS

Alabama/Arkansas/Florida/Louisiana/NevadaClaire Twardy–Outreach Program Office, Auburn University, Auburn, AlabamaGeorgiaClaire Twardy–Outreach Program Office, Auburn University, Auburn, AlabamaDan Kistler–RDF Education Group, Alpharetta, GeorgiaIllinoisTom Muldoon–TaxSeminars.com, Niles, IllinoisIndianaMichael Langemeier–Department of Agricultural Economics, Purdue University, West Lafayette, IndianaIowaKristine Tidgren–Center for Agricultural Law and Tax, Iowa State University, Ames, IowaKentuckyDr. Steve Isaacs–Department of Agricultural Economics, University of Kentucky, Lexington, KentuckyMassachusettsM.J. Alhabeeb–Department of Resource Economics, University of Massachusetts, Amherst, Masssachsetts

MichiganLarry Borton–Department of Agricultural, Food and Resource Economics, Michigan State University, East Lansing, MichiganMinnesotaC. Robert Holcomb–College of Continuing Education, University of Minnesota, MinnesotaMississippiPhilip E. Harris–Tax Insight, LLC, Edina, MinnesotaMissouriMary Sobba–University of Missouri Extension, University of Missouri, Columbia, MissouriNebraskaVirginia Uzendoski–University of Nebraska–Lincoln, Lincoln, NebraskaNew HampshireKarina Drumheller–Professional Development and Training, University of New Hampshire, Durham, New HampshireNew YorkGreg Bouchard–Cornell University, Ithaca, New York


Cooperating Schools xv

TexasConnie Smotek–Texas AgriLIFE Extension and Department of Agricultural Economics, Texas A&M University, College Station, TexasUtahTyler Bowles–Department of Economics and Finance, Utah State University, Logan, UtahVermontSeth Anderson–University of Vermont Extension, Shelburne, VermontVirginiaLeon Geyer–Virginia Tech, Blacksburg, VirginiaWest VirginiaBecky Casteel–Center for Agriculture and Natural Resources, WVU Extension Service, West Virginia University, Morgantown, West VirginiaWisconsinPhilip E. Harris–Tax Insight, LLC, Edina, Minnesota

North CarolinaGuido van der Hoeven–Department of Agricul-tural and Resource Economics, North Carolina State University, Raleigh, North CarolinaOhioBarry Ward–OSU Extension, The Ohio State University, Columbus, OhioBill Van Lokeren–College of Business, University of Cincinnati, Cincinnati, OhioOklahomaJ C. Hobbs–Cooperative Extension Service, Agricultural Economics Department, Oklahoma State University, Stillwater, OklahomaPennsylvania /Delaware/New JerseyMark Ribas–Pennsylvania Tax Institutes, Inc., State College, PennsylvaniaSouth CarolinaDavid Willis–Department of Applied Economics and Statistics, Clemson University, Clemson, South CarolinaTennesseeClark D. Garland–Extension, The University of Tennessee, Knoxville, Tennessee



Documents

2017 NATIONAL INCOME TAX WORKBOOK™