Table of Contents. Introduction... 1 Worker Classification Hobby Loss Rules Specialty Occupations... 33

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1 Table of Contents Introduction... 1 Worker Classification Employee vs. Independent Contractor... 3 Factors...4 Misclassified Employees...9 Worker Classification Review Questions...11 Worker Classification Review Question Answers...13 Hobby Loss Rules Presumption of Profit...16 Nine Relevant Factors...16 Manner in Which the Taxpayer Carries on the Activity...17 Expertise of Taxpayer or Advisors...19 Time and Effort Expended by Taxpayer in Carrying on Activity...20 Expectation That Assets Used in Activity May Appreciate in Value...21 Success of Taxpayer in Carrying on Other Similar or Dissimilar Activities..22 Taxpayer s History of Income or Losses with Respect to Activity...23 Amount of Occasional Profits Earned...24 Financial Status of the Taxpayer...25 Elements of Personal Pleasure or Recreation...26 IRC 183 Examples...26 Tax Reporting...28 Hobby Loss Rules Review Questions...29 Hobby Loss Rules Review Question Answers...31 Specialty Occupations Transportation Industry...33 Hours of Service...34 Employee vs. Independent Contractor Travel Expense Deductions...41 Equipment and Expense Deductions...47 Heavy Highway Vehicle Use Tax...51 Illegal Activities...56 Tax Reporting...57 Gross Income...57 Cost of Goods Sold...58 NATP vii

2 Gambling...63 Gambling Income and Losses...64 Reporting Requirements...67 Professional Gambler...70 Casual or Recreational Gambler...75 Slots...77 Salon Owners...80 Employee vs. Independent Contractor Reporting Obligations...82 Booth Rental Income...82 Tipped Employees...84 Tip Income...84 Withholding on Tips Large Food or Beverage Establishment...90 Allocated Tips...94 IRS Voluntary Compliance Programs FICA Tax Tip Credit Employer Furnished Meals Sharing or Gig Economy Ridesharing Airbnb Flipping Houses Expenses Sale of Property Direct Selling Single-level Marketing vs. Multi-level Marketing Employee vs. Independent Contractor Income and Expenses Tax Reporting Military Military Pay Combat Pay Adjustments to Income, Itemized Deductions, Extensions of Time Earned Income Tax Credit (EITC) Section 121 Exclusion Service Member s Civil Relief Act viii NATP

3 Tax Forgiveness Clergy Qualifications Housing Allowance Employment Taxes Withholding or Estimated Taxes Form W-2 vs. Form 1099-MISC SE Taxes Exemption from SE Tax Claiming an Exemption Vow of Poverty Comprehensive Illustrations Specialty Occupations Review Questions Specialty Occupations Review Answers Life Estates Overview Implied Life Estate Enhanced Life Estate Deed Benefits of Life Estates Pitfalls of Life Estates Valuation Actuarial Tables Basis Adjustments Acquired by Purchase Transfer by Death Transfer by Gift Selling Life Estate Property Home Sale With Single Life Tenant Home Sale With Two Life Tenants Life Estates Review Questions Life Estates Review Answers NATP ix

4 Working Abroad Definitions U.S. Citizens Resident Aliens Nonresident Aliens Foreign Income Translating Foreign Currency Foreign Tax Treaties Tax Treaties Foreign Earned Income Exclusion U.S. Travel Restrictions Foreign Tax Home Foreign Country Presence Tests Foreign Earned Income Foreign Housing Exclusion/Deduction Housing Expenses Excludable Amount Claiming Exclusion(s) Voluntary Election Revoking the Exclusion Extension of Time to Qualify Sample Problem Part-year Exclusion Sample Problem Federal Income Tax Withholding (FITW) Totalization Agreements Dual Coverage Eliminating Dual Coverage Certificate of Coverage Benefits Social Security and Medicare Tax (FICA) Self-Employment Tax (SE tax) U.S. Possessions x NATP

5 Foreign Tax Credit (FTC) Tax Credit or Deduction Qualifying Foreign Taxes Limitations on Some Foreign Taxes Foreign Tax Redeterminations Income for Purposes of FTC Income Categories Credit Limitation Claiming the Credit Foreign Taxes Paid or Accrued FTC vs. Foreign Earned Income Exclusion Foreign Social Security Exemptions, Deductions, and Credits Charitable Contributions Personal Exemptions Foreign Asset Information Reporting Working Abroad Review Questions Working Abroad Review Answers Appendix Appendix A: Form 8919, Uncollected Social Security and Medicare Tax on Wages Appendix B: Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding Appendix C: Trucker Deductible Expense List Appendix D: Form W-2G Instructions Appendix E: Pub. 3148, Tips on Tips Appendix F: Uber Taxing Reporting Document from Appendix G: Section 7520 Rates Appendix H: Table S Sample Appendix I: FBAR and Form 8938 Comparison Chart NATP xi