​​​​​​​​​​​​​​​​​​​​​​​​​​Kentucky Chapter Education

2025 KY NATP Annual Meeting

This event will host Les Marti and will offer the following education:

• Passive Activities – Including QBID for Rental Activities
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  The Tax Reform Act of 1986 limited the ability of taxpayers to deduct losses from passive activities against other sources of income. Rather than allow a current deduction, Code Section 469 forces a taxpayer to suspend these losses until certain events occur. Due to the various tax codes applying to these activities, confusion still exists as to how to properly apply the passive activity loss rules. Additionally, there are opportunities to mitigate the consequences of these rules. This session will look at these opportunities and how grouping activities may allow a current deduction for losses otherwise subject to suspension. The Tax Cuts and Jobs Act brought about a safe harbor rule for claiming the QBID for rental activities. However, do tax rules allow for QBID of rental activities even if this safe harbor is not met? In this session, we will review even more code sections to learn how to apply the tax code to rental activities.
• Clergy Returns
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  (Tax law allows certain tax breaks for taxpayers who qualify as clergy. Many religious orders of clergy are treated as “dual-status” taxpayers. They are employees for income tax purposes, however, they are self-employed for self-employment tax purposes. Additionally, qualifying clergy are able to treat a portion of their income as a tax-free housing allowance. Not only are members of clergy able to exclude their housing allowance from income tax, they are allowed to “double dip” certain expenses. This session will cover the rules for determining who qualifies for the tax breaks, and also review the proper income and self-employment tax reporting for clergy.
• Like-Kind Exchanges
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  Like-Kind Exchange rules allow a taxpayer to defer taxability of selling real property if the property is exchanged for other real property. There are specific rules to follow in order to be sure the deferral of tax will be allowed. This session will cover the rules to achieve successful tax-deferral, as well as how to fill in the Form 8824 which is used for these exchanges. This course will go through the form line-by-line, as it is common to miss the finer points of the form, causing a preparer to complete the Form 8824 improperly. The Tax Cuts and Jobs Act eliminated tax deferral for personal property. This session will also cover the tax benefits as well as the pitfalls of the elimination of personal property like-kind exchanges.
• Hobby Losses
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  Taxpayers are often tempted to treat their recreational hobby as a business in order to reduce their tax liability from other sources of income. The IRS has specific rules regarding the determination of what qualifies as a legitimate business for tax purposes. This course will cover the nine factors the IRS and the tax courts consider when determining whether an activity qualifies as a business. Discussions will include actions a taxpayer may take to prevent the activity being classified as a hobby. This session will also cover the tax consequences of an activity being classified as a hobby
• KY/IN Reciprocal States
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  This session will explore the nuances of the reciprocal states of KY and IN. KY and IN specific reciprocal state rules will be discussed and examples of how to prepare the reciprocal return will be given. This session is important for preparers that live in areas that work with taxpayers who may live in one state, but work in the other. The course will show how to handle these specific criteria. Presented by Martha Nest & Daniel Valcarcel.
• Employee vs Independent Contractor
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  The classification of a worker as an independent contractor or an employee determines how they will be treated for income tax and labor law purposes. A proper determination must be made by the employing entity at the time the worker is hired to avoid negative consequences by the IRS and other labor agencies later. The entity may be subject to back taxes as well as substantial penalties for misclassifying a worker. For legal purposes, there are two classifications of workers, independent contractors or employees. The determination of either of these status’s can have large consequences later if the IRS or other agency reclassifies the worker. In this course, you’ll learn the differences between an independent contractor and an employee, as well as how to correct a misclassification of employees.

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