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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Wednesday, May 25, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will provide an in-depth explanation of depreciation recapture rules, focusing on the technical calculations and planning opportunities of the recapture provisions. The speakers will explore IRC 1245 and 1250, which set out the rules for recapture based on various types of assets.

Faculty

John T. Alfonsi
Managing Director
Cendrowski Corporate Advisors

Mr. Alfonsi has 25 years of tax consulting, business valuation, litigation support and forensic accounting experience. In the tax planning and consulting arena, he works primarily with partnerships and with private equity, venture capital and hedge funds.

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Charles Mullen
Chairman
Apple Growth Partners

Mr. Mullen, CPA, CMA, CGMA, MTax, is the Chairman of Apple Growth Partners (AGP), a regional CPA and Business Advisory firm headquartered in Northeast Ohio. In addition to his role as managing partner, he provides tax and accounting services to closely held companies and individuals, and assists with financial and strategic planning. Mr. Mullen’s extensive experience with privately held companies consists of auto dealership clients, providing tax structure advice for mergers and acquisitions, succession planning, preparing for sale, and business strategy. A frequently requested public speaker, he has presented at both internal and external events, including the Institute of Management Accountants, The University of Akron's National Tax Conference, the ICA Car Wash Show, and hosts Apple Growth Partners’ weekly business podcast, “Sliced.” Mr. Mullen holds a Bachelor of Science in Accounting and Master of Taxation degree from the University of Akron. Under his leadership, AGP has earned several prestigious regional and national awards recognizing employee culture and the firm has experienced 90% revenue growth during his six-year tenure thus far.

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Description

Depreciation recapture is the IRS process of recharacterizing tax on a gain that had previously provided a deduction against ordinary income. Business taxpayers experience unexpected income tax liabilities by failing to account for depreciation recapture provisions when selling business assets.

Depreciation recapture under IRC Sections 1245 and 1250 applies to sales of depreciable real estate, business tangible personal property, even the sale of a business. Tax advisers need to understand the recapture rules and to be able to advise decision makers of the tax effects of depreciation recapture on gains from asset sales in order to understand the tax consequences of the sale of capital assets.

By carefully considering the recapture rules, tax advisers can reduce the negative impact of depreciation recapture through planning. In any tax reduction scenario, the proper calculation of the recapture provisions is critical to minimizing taxes on business asset sale gains through the timing of transactions.

Listen as our expert panel provides a practical exploration into the depreciation recapture rules of Sections 1245 and 1250, providing best practices for calculating depreciation recapture as a planning tool for avoiding tax.

Outline

  1. Depreciation recapture provisions and rules
  2. Recapture against real estate
  3. Recapture against business equipment and other assets
  4. Planning opportunities
    1. Transaction timing opportunities
    2. Transaction structure
    3. Installment sales
    4. Like-kind (Section 1031) exchanges
    5. Component allocations

Benefits

The panel will address these and other notable issues:

  • Applicable depreciation recapture rules for Sections 1245 and 1250
  • The distinction between depreciation recapture and unrecaptured Section 1250 gains
  • Preparing calculations and estimates of recapture gains recharacterized as ordinary income or Section 1250 gains
  • Planning opportunities to manage and reduce the tax arising from recapture
  • Differences in treatment between structuring a business disposition as a stock sale vs. an asset sale

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify the applicable depreciation recapture rules for Sections 1245 and 1250
  • Decide how to prepare calculations and estimates of recapture gains recharacterized as ordinary income
  • Determine duties to assess the risk of material misstatement due to fraud
  • Establish planning opportunities to reduce the tax arising from recapture and distinguish between the differences in treatment between structuring a business disposition as a stock sale vs. an asset sale

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years plus business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules, supervising other preparers/accountants. Specific knowledge and understanding of depreciation recapture rules, the technical calculations and planning opportunities of the recapture provisions; familiarity with IRC Sections 1245 and 1250, which set out the rules for recapture based on various types of assets.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).