Tax Return Analysis Topic List

The following outline lists the main topics covered in the
Tax Return Analysis: Cash Flow & Beyond two-day live
seminar version of this course. For more about the online
version, contact me to take my e.learning demo.

For general information about who should take this course,
why, and what it will cost, visit the course description page.

Introduction of St Michael Case Study
Personalities
Business interests owned
Investment portfolio - real estate and other

Cash Flow Linkage
Linking of possible (probable) sources and uses
of cash from related business activities

General Theory of Tax Planning
Setting the stage for the tax planning opportunities
Translating effective tax planning into real cash flows

Compensation Issues
Compensation from the closely held business
Compensation planning for the owner/employee of a “C” corporation
Stock options
Compensation cash flow analysis using both the
No Questions Asked and Comprehensive cash flow models
The ROI Card - Relationship Opportunity Identifier - bank service/product selling opportunities associated with compensation

Interest and Dividend Income (Schedule B)
Noncash interest and dividends
“Pass-through” entity interest and dividend income
Converting the tax return interest and dividend income to cash flows
Interest and dividend income cash flow analysis using both the
No Questions Asked and Comprehensive cash flow models
The ROI Card - Relationship Opportunity Identifier - with respect
to interest and dividend income

Profit or Loss From Business (Schedule C)
Sole proprietorship (definition and application)
One owner limited liability company (LLC) (definition and application) Accounting methods used on Schedule C
“Related party transactions” - expect to see them; how to interpret them Schedule C cash flow analysis using both the
No Questions Asked and Comprehensive cash flow models
The ROI Card - Relationship Opportunity Identifier -
with respect to Schedule C activities

Capital Gains and Losses (Schedule D)
Predictable and one time cash flows from capital transactions
Installment Sales
Like-kind Exchanges

Definition
Qualifying Property Exchanges
'Boot' - what it is and how it can accelerate the tax paid
‘Related party exchanges’

Schedule D cash flow analysis using both the
No Questions Asked and Comprehensive cash flow models
The ROI Card - Relationship Opportunity Identifier -
with respect to Schedule D activities

Rental Real Estate and Royalty Transactions (Schedule E, Page 1)
Types of leases
Passive loss limitation rules - what they are and how they impact cash flow Planning in light of the passive loss limitations - tax shelters and passive income generators
Schedule E, Page 1 cash flow analysis using both the
No Questions Asked and Comprehensive cash flow models
The ROI Card - Relationship Opportunity Identifier -
with respect to Schedule E, Page 1 activities

Partnerships, S Corporations, Limited Liability Companies, Limited Liability Partnerships (Schedule E, Page 2)
Using Schedule K-1

How the pass-through concept works - chasing the numbers
Cash and other property distributions
Capital contributions - cash and other property
Share of liabilities - recourse and other

How the Schedule K-1 is used

by the IRS
by the banker - follow up questions the banker should ask

Schedule E, Page 2 cash flow analysis using both the
No Questions Asked and Comprehensive cash flow models

The ROI Card - Relationship Opportunity Identifier -
with respect to Schedule E, Page 2 activities

Alternative Minimum Tax (AMT)
What it is, and what it does
Tax planning around the AMT - not easy to do!
Banker’s use of the AMT

Personal Financial Statement
Using the client prepared personal financial statement (PFS)
in tandem with the individual income tax return
Net worth issues verses predictable and one time cash flows
“Shenanigans” played on the PFS - identify and undo them

Valuation issues

Unlisted securities
Closely held business interests

Controlling ownership interest
Minority interest
Banker’s concerns - discounting the value
Related party 'special purpose vehicles' - (SPVs)

Ownership of assets

Title issues
Title held in revocable trust legally, but included
on the grantor’s PFS
Liquidity concerns - “near cash” assets carry a premium

Liabilities unrecorded

Lease obligations
Off balance sheet financing concerns
Contingent obligations - personally guarantying
related entity debt

How estate planning can alter the owner’s personal financial statement

Asset valuations might not be close to
fair market value - by design
Transfer of assets as part of the estate plan

Case Study Resolution
Completing the cash flow analysis using both the
No Questions Asked and Comprehensive cash flow
models for the case study
Interpreting the results
Prioritizing the possible follow up questions for the client

 

 

 

 

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