1040 Preparation and Planning 7: Other Income and Exclusions (2024)

Author: Barbara Weltman, Sidney Kess, Greg White

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2026 to receive credits

This two-hour CPE course, the seventh in the 1040 Preparation and Planning series, covers various types of income not discussed in other courses in this series, as well as exclusions from gross income. Tax developments reflected in this course, including the Consolidated Appropriations Act, 2023 (including SECURE Act 2.0), the Inflation Reduction Act of 2022, and other tax legislation, IRS pronouncements, and court decisions, are extensive. They impact 2023 tax year returns that will be filed during the 2024 filing season and refund opportunities for earlier years; as well as point the way to strategic planning in 2024 and beyond. This course brings the tax preparer "up-to-speed" in preparing 2023 tax returns for the 2024 filing season.

Publication Date: September 2023

Topics Covered

• Commercial Annuities
• General Rule
• Expected Return
• Cashing in Annuities
• Penalties on Early Distributions
• IRA Distributions
• Reporting IRA Distributions
• SECURE 2.0
• Beneficiary Distributions
• Determining the Beneficiary
• Owner Dies after 2019
• Proposed Regs Individual Beneficiaries — 10-Year Rule
• Inherited IRAs — General Thoughts
• Owner Dies before 2020 and on or after the Required Beginning Date
• Qualified Charitable Distributions
• Annual Exclusion for QCDs
• Exclusions in General
• Gifts and Inheritances
• Insurance Proceeds
• Life Insurance
• Accelerated Death Benefits
• Surrender of Life Insurance Policy
• Death Benefits Paid by an Employer
• Death Benefits Paid to Military Personnel
• Proceeds from Accident and Health Insurance Policies
• Disability Policies
• Scholarships and Fellowships
• Workers' Compensation
• Damages for Injuries and Claims
• Miscellaneous Income
• Common Inclusions and Exclusions from Gross Income
• 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

Learning Objectives

• Explain how to report income from a commercial annuity
• Explain how to 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
• Recognize how to distinguish between taxable and tax-free damages

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None