Shop Courses > Tax Guide to Bankruptcy

Tax Guide to Bankruptcy #491626

Course Overview

Credit

Amount

CPA

EA / OTRP

Course Author: Danny Santucci, J.D. Field of Study (CPA): Taxes Field of Study (EA/OTRP): Federal Tax Law

Course Description

Course publication/revision date: This course was updated on 8/6/2026 (covers 2026 tax year).

The Bankruptcy Abuse Prevention and Consumer Protection Act was enacted to minimize abuse of the bankruptcy system. Included in this Act were tax law changes and other changes that individuals, partnerships, and corporations will see in the bankruptcy procedures and qualifications. This mini-course both examines these changes that debtors will face when filing for federal bankruptcy and also explores the many tax issues of bankruptcy. Practitioners will also learn about other issues such as homesteading and garnishment by creditors.

Table of Contents

Federal Bankruptcy1

Means Testing	2
State Median Income Test	2
Means Test	2
Credit Counseling	3
Tax Law Changes	3
Chapter 13 "Super discharge"	3
Subordination of Ad Valorem Tax Liens	3
Interest on Tax Claims	3
Tax Returns	3
Bankruptcy Types	3
Chapter 7 - Liquidation	5
Exempt Assets	5
Availability	6
Trustee Appointment	6
Chapter 11- Reorganization	8
Availability	8
Creditors' Committee	8
Reorganization Plan	8
Chapter 13 - Wage-Earner Plan	9
Availability	9
Repayment Plan	9
Trustee Appointment	10
Automatic Stay	10
Tax Assessment	11
Suspension of Statute of Limitation	12
Immediate Assessment	12
Levy	12
Tax Court	13
Tax Court Petition	13
Preferences	14
Trust Fund Taxes	15
Allocation of Tax Payments	15
Priorities	15
Super Priority Claims	15
Secured Claims	15
Federal Tax Liens	15
Priority Claims	16
Tax Claim Determination	19
Refunds	19
Priority of Tax Claims	20
Second Priority Administrative Expense Tax Claims	20
Third Priority Gap Period Tax Claims	21
Fourth Priority Wage Claims Generate Eight Tax Claims	21
Eighth Priority Prepetition Tax Claims	21
Debt Discharge	22
Chapter 7 Discharge	22
Chapter 11 Discharge	24
Chapter 13 Discharge	24
Discharge of Taxes	25
Tax Liens	25
Individual Bankruptcy Estate	28
Separate Entity	28
Tax Attribute Carryovers	29
Termination of the Estate	29
Filing Requirements	30
Disclosure of Return Information	31
Taxable Income	32
Taxable Year	32
Gross Income	32
Deductions & Credits	33
Administrative Expenses	33
Net Operating Loss Carryback	34
Transfers to Debtor	34
Partnership & S Corporation Interests	34
Request for Prompt Determination of Liability	34
Tax Liability	35
Individual Debtor	35
Tax Year Election	35
Annualizing Taxable Income	36
Making the Election	36
Later Bankruptcy of Spouse	37
Election Considerations	38
Transfers between Debtor & Estate	39
Net Operating Loss Carryback Limitation	39
Partnership Bankruptcy	39
No Separate Estate	39
Discharge of Debts	39
Corporate Bankruptcy	40
Exemption Return Filing	40
Personal Holding Company Tax	40
Tax-free Reorganizations	40
§354, §355, & §356	41
Corporate Liquidations under Chapter 7	41
Carryover of Tax Items - §381 & 382	42
Bankruptcy Exception	43
Reduction of Carryforwards	43
Section 269 Presumption	44

Homesteading44

Types of Homesteads	44
Property & Equity Covered	45
Who Can Homestead?	45
Excluded Debts	46

Garnishment46

Course Details

Author: Danny Santucci, J.D.

Danny earned his Bachelor of Arts in Political Science from the University of California at Irvine in 1969. He received his Juris Doctorate from Boalt Hall School of Law, University of California at Berkeley in 1972, at which time he began practice as a tax attorney in Southern California. His legal career was initiated with the business and litigation firm of Edwards, Edwards and Ashton. Later he joined the Century City entertainment firm of Bushkin, Gaims, Gaines & Jonas working for many well-known celebrities. In 1980, Danny established the law firm of Santucci, Potter and Leanders, in Irvine, California. With increasing lecture and writing commitments, Danny went into sole practice in 1995. His practice emphasizes business taxation, real estate law and estate planning. Danny has been an officer and active member in various organizations including the Glendale Bar Association, Century City Bar Association, Orange County and Los Angeles County Bar Associations, California State Bar Association, Toastmasters and Lions Club. He also avidly supports the American Association for the Advancement of Science. He has been admitted to practice before all California and federal courts including the United States Tax Court and the United States Supreme Court. Serving as a lecturer for the Continuing Education of the Bar of California, Golden Gate University, and numerous state C.P.A. societies, Danny teaches a variety of tax, business and real estate courses. Danny has been in demand all across the country as a speaker for all levels of professional and civic organizations and numerous major seminar circuits. Danny spoke to over 2,000 people per month and traveled more than 150,000 miles annually. In 2015, he withdrew from the lecture circuit to devote himself to tax research and writing. The author of numerous texts, he is listed in "Who’s Who in Creative Real Estate" and is admitted to the American Exchangor’s Hall of Fame.

Publication/Revision Date: 8/6/2026

Course Exam Questions (online): 10 (multiple-choice)

Program Delivery Method: Self-Study (NASBA QAS Self-Study)

Available Formats of Course Text: PDF or PDF plus printed copy sent in the mail

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Overview	None	None
EA/OTRP	Overview	None	None

* This program is appropriate for professionals at all organizational levels.

Sponsor ID Numbers

National Registry of CPE Sponsors ID: 107615

IRS Qualified Sponsor ID: FWKKO — Course ID: FWKKO-T-00792-26-S

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Identify changes made by the 2005 Bankruptcy Act and the common types of bankruptcy.
Determine the treatment of preferential transfers, the priority of claims, and the discharge of debts.
Recognize the creation and taxation of an individual bankruptcy estate specifying partnership & corporate bankruptcy differences.
Identify the scope of and special rules for homesteading and garnishment.