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West Federal Taxation Individual Income Taxes 2004, Professional Version,9780324275162

West Federal Taxation Individual Income Taxes 2004, Professional Version

by ; ;
Format: Hardcover
Pub. Date: 4/29/2003
Publisher(s): South-Western College/West
Availability: This title is currently not available.

Table of Contents

Preface iii
PART ONE Introduction and Basic Tax Model
An Introduction to Taxation and Understanding the Federal Tax Law
1(1)
History of U.S. Taxation
3(1)
Early Periods
3(1)
Revenue Acts
3(1)
Historical Trends
4(1)
Criteria Used in the Selection of a Tax Structure
4(1)
The Tax Structure
5(1)
Tax Base
5(1)
Tax in the News: Adam Smith Stopped Too Soon
5(1)
Tax Rates
6(1)
Incidence of Taxation
6(1)
Major Types of Taxes
6(13)
Property Taxes
6(2)
Transaction Taxes
8(1)
Tax in the News: How Much Tax Will Make Me Quit?
9(2)
Tax in the News: The Wrong Way to Buy Artwork
11(1)
Death Taxes
11(2)
Gift Taxes
13(1)
Income Taxes
14(2)
Tax in the News: When to Tax the Visitor
16(1)
Employment Taxes
16(1)
Other U.S. Taxes
17(1)
Proposed U.S. Taxes
18(1)
Tax Administration
19(6)
Internal Revenue Service
19(1)
The Audit Process
19(2)
Statute of Limitations
21(1)
Interest and Penalties
22(1)
Tax Practice
23(1)
Ethical Considerations: Do You Sign or Not?
24(1)
Ethical Considerations: Getting Extra Use Out of a Client List!
25(1)
Understanding the Federal Tax Law
25(10)
Revenue Needs
25(1)
Economic Considerations
26(1)
Social Considerations
27(1)
Equity Considerations
28(2)
Political Considerations
30(2)
Influence of the Internal Revenue Service
32(1)
Influence of the Courts
33(1)
Summary
34(1)
Problem Materials
35
Working with the Tax Law
1(1)
Tax Sources
2(20)
Tax in the News: Small Is Beautiful?
3(1)
Statutory Sources of the Tax Law
3(4)
Administrative Sources of the Tax Law
7(1)
Global Tax Issues: Tax Treaties
8(1)
Ethical Considerations: The President and the IRS
8(5)
Tax in the News: Potpourri of News about the IRS
13(1)
Judicial Sources of the Tax Law
13(2)
Tax in the News: The U.S. Tax Court
15(7)
Working with the Tax Law---Tax Research
22(10)
Identifying the Problem
24(1)
Refining the Problem
24(1)
Locating the Appropriate Tax Law Sources
25(2)
Assessing the Validity of the Tax Law Sources
27(1)
Tax in the News: Internal Revenue Code: Interpretation Pitfalls
28(3)
Arriving at the Solution or at Alternative Solutions
31(1)
Communicating Tax Research
31(1)
Working with the Tax Law---Tax Planning
32(11)
Nontax Considerations
32(2)
Tax Avoidance and Tax Evasion
34(1)
Tax in the News: The Disappearing Taxpayers
35(1)
Ethical Considerations: I Hate the IRS
35(1)
Follow-up Procedures
35(1)
Tax Planning---A Practical Application
36(1)
Electronic Tax Research
36(3)
Global Tax Issues: Data Warehousing Reduces Global Taxes
39(4)
Problem Materials
43
Tax Determination; Personal and Dependency Exemptions; An Overview of Property Transactions
1(1)
Tax Formula
3(7)
Components of the Tax Formula
3(2)
Global Tax Issues: Citizenship Is Not Tax-Free
5(3)
Application of the Tax Formula
8(1)
Individuals Not Eligible for the Standard Deduction
9(1)
Special Limitations for Individuals Who Can Be Claimed As Dependents
9(1)
Personal and Dependency Exemptions
10(7)
Personal Exemptions
10(1)
Dependency Exemptions
11(1)
Ethical Considerations: Should a Dependent Pay Her Own Way?
12(3)
Ethical Considerations: A Change of Residence Can Be Rewarding
15(1)
Phaseout of Exemptions
15(1)
Tax in the News: How to Subtly Pluck the Chicken
16(1)
Ethical Considerations: Who Can Claim the Exemption?
16(1)
Child Tax Credit
17(1)
Tax Determination
17(6)
Tax Table Method
17(1)
Tax Rate Schedule Method
18(1)
Computation of Net Taxes Payable or Refund Due
19(1)
Tax in the News: Do You Plan for That Big Refund? Uncle Sam Loves You!
19(1)
Unearned Income of Children Under Age 14 Taxed At Parents' Rate
20(3)
Filing Considerations
23(7)
Filing Requirements
23(2)
Tax in the News: An IRS Dilemma That Will Not Go Away
25(1)
Tax in the News: Free E-Filing!
26(1)
Tax in the News: ``Charge It''---Convenient But Not Cheap!
27(1)
Filing Status
27(1)
Global Tax Issues: Filing a Joint Return
28(2)
Gains and Losses from Property Transactions---In General
30(1)
Gains and Losses from Property Transactions---Capital Gains and Losses
31(2)
Definition of a Capital Asset
31(1)
Taxation of Net Capital Gain
32(1)
Determination of Net Capital Gain
32(1)
Treatment of Net Capital Loss
33(1)
Tax Planning Considerations
33(3)
Taking Advantage of Tax Rate Differentials
33(1)
Income of Minor Children
34(1)
Dependency Exemptions
34(1)
Ethical Considerations: Manipulating Deductions
35(1)
Problem Materials
36
PART TWO Gross Income
Gross Income: Concepts and Inclusions
1(1)
Global Tax Issues: From ``All Sources'' Is a Broad Definition
3(1)
Gross Income---What Is It?
3(3)
Definition
3(1)
Economic and Accounting Concepts
3(2)
Comparison of the Accounting and Tax Concepts of Income
5(1)
Tax in the News: Frequent-Flyer Miles Yield Taxable Income That Is Not Taxed
5(1)
Form of Receipt
6(1)
Recovery of Capital Doctrine
6(1)
Year of Inclusion
6(8)
Taxable Year
6(1)
Accounting Methods
7(1)
Ethical Considerations: The Client's Error
8(1)
Exceptions Applicable to Cash Basis Taxpayers
9(3)
Exceptions Applicable to Accrual Basis Taxpayers
12(1)
Global Tax Issues: Tax Credit Neutralizes Foreign Income Taxes
12(2)
Income Sources
14(5)
Personal Services
14(1)
Income from Property
14(2)
Ethical Considerations: Enhancing Lottery Winnings
16(1)
Income Received by an Agent
16(1)
Income from Partnerships, S Corporations, Trusts, and Estates
16(1)
Income in Community Property States
17(2)
Items Specifically Included in Gross Income
19(16)
Alimony and Separate Maintenance Payments
19(3)
Imputed Interest on Below-Market Loans
22(2)
Ethical Considerations: A Concealed Loan
24(1)
Tax in the News: Loans to Executives Prohibited
25(2)
Income from Annuities
27(3)
Prizes and Awards
30(2)
Group Term Life Insurance
32(1)
Unemployment Compensation
33(1)
Social Security Benefits
33(1)
Tax in the News: A Taxpayer Learns about the ``Quirky'' Social Security Benefits Taxation Formula
34(1)
Tax Planning Considerations
35(4)
Nontaxable Economic Benefits
35(1)
Tax Deferral
35(2)
Shifting Income to Relatives
37(1)
Accounting for Community Property
38(1)
Alimony
38(1)
Problem Materials
39
Gross Income: Exclusions
1(1)
Items Specifically Excluded from Gross Income
2(2)
Statutory Authority
4(1)
Gifts and Inheritances
4(2)
General
4(1)
Gifts to Employees
5(1)
Employee Death Benefits
5(1)
Tax in the News: Begging as a Tax-Disfavored Occupation
5(1)
Life Insurance Proceeds
6(3)
General Rule
6(1)
Tax in the News: Frequent-Flyer Miles Will Not Be Taxed
6(1)
Accelerated Death Benefits
7(1)
Ethical Considerations: Should the Terminally Ill Pay Social Security Taxes?
8(1)
Transfer for Valuable Consideration
8(1)
Scholarships
9(2)
General Information
9(1)
Timing Issues
10(1)
Disguised Compensation
10(1)
Qualified Tuition Reduction Plans
10(1)
Compensation for Injuries and Sickness
11(2)
Damages
11(1)
Ethical Considerations: Damage Allocation with a View toward the Tax Consequences
12(1)
Workers' Compensation
13(1)
Accident and Health Insurance Benefits
13(1)
Employer-Sponsored Accident and Health Plans
13(3)
Medical Reimbursement Plans
14(1)
Tax in the News: Medical Savings Accounts: Questions and Answers
15(1)
Long-Term Care Insurance Benefits
15(1)
Meals and Lodging
16(3)
Furnished for the Convenience of the Employer
16(2)
Ethical Considerations: ``Employer Required'' Lodging
18(1)
Other Housing Exclusions
18(1)
Other Employee Fringe Benefits
19(7)
Specific Benefits
19(1)
Cafeteria Plans
19(1)
Flexible Spending Plans
20(1)
General Classes of Excluded Benefits
20(5)
Taxable Fringe Benefits
25(1)
Foreign Earned Income
26(2)
Interest on Certain State and Local Government Obligations
28(1)
Global Tax Issues: U.S. Taxpayers Abroad Are Gone but Not Forgotten
28(1)
Dividends
29(1)
General Information
29(1)
Stock Dividends
30(1)
Educational Savings Bonds
30(1)
Qualified Tuition Programs
31(1)
Tax in the News: Financial Planners See Growth Potential for College Savings Plans
32(1)
Tax Benefit Rule
32(1)
Income from Discharge of Indebtedness
33(1)
Tax Planning Considerations
34(2)
Life Insurance
34(1)
Employee Benefits
34(1)
Investment Income
35(1)
Problem Materials
36
PART THREE Deductions
Deductions and Losses: In General
1(1)
Classification of Deductible Expenses
2(7)
Deductions for Adjusted Gross Income
3(1)
Tax in the News: Home Schooling: Who Is a Teacher?
4(1)
Itemized Deductions
5(1)
Trade or Business Expenses and Production of Income Expenses
5(1)
Tax in the News: Forward to the Future
6(2)
Tax in the News: Janitor Dies and Employer Profits
8(1)
Business and Nonbusiness Losses
9(1)
Reporting Procedures
9(1)
Deductions and Losses---Timing of Expense Recognition
9(4)
Importance of Taxpayer's Method of Accounting
9(2)
Cash Method Requirements
11(1)
Accrual Method Requirements
11(2)
Disallowance Possibilities
13(18)
Public Policy Limitation
13(2)
Political Contributions and Lobbying Activities
15(1)
Excessive Executive Compensation
15(1)
Investigation of a Business
16(1)
Hobby Losses
17(3)
Rental of Vacation Homes
20(1)
Tax in the News: Investing in Real Estate: An Alternative to the Stock Market?
20(4)
Ethical Considerations: A Golf Widow's Dream
24(1)
Expenditures Incurred for Taxpayer's Benefit or Taxpayer's Obligation
24(2)
Ethical Considerations: How the Payment Is Made
26(1)
Disallowance of Personal Expenditures
26(1)
Disallowance of Deductions for Capital Expenditures
27(1)
Transactions Between Related Parties
28(1)
Substantiation Requirements
29(1)
Expenses and Interest Relating to Tax-Exempt Income
30(1)
Tax Planning Considerations
31(3)
Time Value of Tax Deductions
31(1)
Unreasonable Compensation
31(2)
Excessive Executive Compensation
33(1)
Shifting Deductions
33(1)
Hobby Losses
33(1)
Capital Expenditures
34(1)
Problem Materials
34
Deductions and Losses: Certain Business Expenses and Losses
1(1)
Bad Debts
3(3)
Specific Charge-Off Method
3(1)
Business versus Nonbusiness Bad Debts
4(1)
Loans Between Related Parties
5(1)
Worthless Securities
6(2)
Small Business Stock
6(1)
Tax in the News: When Is Enron Stock Worthless?
6(2)
Losses of Individuals
8(8)
Ethical Considerations: What Is a Casualty Loss?
8(1)
Events That Are Not Casualties
9(1)
Tax in the News: Losses Caused by the Southern Pine Beetle
9(1)
Theft Losses
10(1)
When to Deduct Casualty Losses
10(1)
Measuring the Amount of Loss
11(3)
Statutory Framework for Deducting Losses of Individuals
14(1)
Personal Casualty Gains and Losses
14(2)
Ethical Considerations: The Amount of a Casualty Loss
16(1)
Research and Experimental Expenditures
16(2)
Expense Method
17(1)
Deferral and Amortization Method
17(1)
Net Operating Losses
18(6)
Global Tax Issues: Reducing the Cost of Government Incentives for Investors
18(1)
Carryback and Carryover Periods
19(1)
Computation of the Net Operating Loss
20(1)
Tax in the News: Compromises Made to Reach Accord on California Budget
20(3)
Recomputation of Tax Liability for Year to Which Net Operating Loss is Carried
23(1)
Calculation of the Remaining Net Operating Loss
24(1)
Tax Planning Considerations
24(3)
Tax Consequences of the Groetzinger Case
24(1)
Documentation of Related-Taxpayer Loans, Casualty Losses, and Theft Losses
25(1)
Small Business Stock
25(1)
Casualty Losses
26(1)
Net Operating Losses
26(1)
Problem Materials
27
Depreciation, Cost Recovery, Amortization, and Depletion
1(1)
Overview
3(1)
Accelerated Cost Recovery System (ACRS and MACRS)
4(17)
General Considerations
4(1)
Eligible Property Under ACRS or MACRS
5(1)
Personalty: Recovery Periods and Methods
5(3)
Tax in the News: Repercussions from Additional First-Year Depreciation
8(1)
Realty: Recovery Periods and Methods
9(2)
Straight-Line Election Under ACRS and MACRS
11(1)
Election to Expense Assets
12(1)
Global Tax Issues: Will Changing a Depreciation Rule Sink Boat Builders?
12(2)
Tax in the News: Stimulating the Economy by Changing the Depreciation Rules
14(1)
Business and Personal Use of Automobiles and Other Listed Property
15(4)
Ethical Considerations: Substantiating Business Usage of an Automobile
19(1)
Alternative Depreciation System (ADS)
19(2)
Amortization
21(1)
Depletion
22(4)
Intangible Drilling and Development Costs (IDC)
22(1)
Depletion Methods
23(1)
Ethical Considerations: Computing Cost Depletion
24(2)
Reporting Procedures
26(4)
Tax Planning Considerations
30(2)
Cost Recovery
30(1)
Amortization
31(1)
Depletion
31(1)
Tables
32(7)
Problem Materials
39
Deductions: Employee and Self-Employed-Related Expenses
1(1)
Employee versus Self-Employed
3(1)
Employee Expenses---In General
4(1)
Tax in the News: Caddies or Golf Carts?
4(1)
Transportation Expenses
5(2)
Qualified Expenditures
5(1)
Computation of Automobile Expenses
6(1)
Travel Expenses
7(4)
Definition of Travel Expenses
7(1)
Away-From-Home Requirement
7(2)
Restrictions on Travel Expenses
9(1)
Combined Business and Pleasure Travel
10(1)
Moving Expenses
11(2)
Distance Test
11(1)
Global Tax Issues: Conventions in Faraway Lands
11(1)
Time Test
12(1)
Treatment of Moving Expenses
12(1)
Ethical Considerations: How Much Is That House Really Worth?
13(1)
Education Expenses
13(4)
General Requirements
13(1)
Requirements Imposed by Law or by the Employer for Retention of Employment
14(1)
Maintaining or Improving Existing Skills
14(1)
Classification of Specific Items
15(1)
A Limited Deduction Approach
15(1)
Other Provisions Dealing with Education
16(1)
Entertainment Expenses
17(3)
Cutback Adjustment
17(1)
Ethical Considerations: Your Turn or Mine?
18(1)
Classification of Expenses
18(1)
Restrictions Upon Deductibility
19(1)
Other Employee Expenses
20(4)
Office in the Home
20(2)
Miscellaneous Employee Expenses
22(1)
Tax in the News: One Side Effect of 9/11
22(2)
Contributions to Retirement Accounts
24(1)
Employee IRAs
24(1)
Self-Employed Keogh (H.R. 10) Plans
24(1)
Classification of Employee Expenses
25(2)
Accountable Plans
25(1)
Nonaccountable Plans
26(1)
Reporting Procedures
27(1)
Limitations on Itemized Deductions
27(2)
Miscellaneous Itemized Deductions Subject to the 2 Percent Floor
27(1)
Miscellaneous Itemized Deductions Not Subject to the 2 Percent Floor
28(1)
Tax Planning Considerations
29(3)
Self-Employed Individuals
29(1)
Shifting Deductions Between Employer and Employee
29(1)
Tax in the News: Self-Employed or Employed? Misclassification Can Be Costly!
29(1)
Transportation and Travel Expenses
30(1)
Moving Expenses
30(1)
Global Tax Issues: Expatriates and the Moving Expense Deduction
30(1)
Education Expenses
31(1)
Entertainment Expenses
31(1)
Unreimbursed Employee Business Expenses
31(1)
Problem Materials
32
Deductions and Losses: Certain Itemized Deductions
1(1)
General Classification of Expenses
2(1)
Medical Expenses
3(8)
General Requirements
3(1)
Tax in the News: Average Itemized Deductions
3(1)
Medical Expenses Defined
4(1)
Tax in the News: Weight Reduction Programs
5(1)
Ethical Considerations: Pigging Out to Get a Deduction
6(1)
Capital Expenditures for Medical Purposes
6(1)
Medical Expenses Incurred for Spouse and Dependents
7(1)
Transportation, Meal, and Lodging Expenses for Medical Treatment
7(1)
Amounts Paid for Medical Insurance Premiums
8(1)
Year of Deduction
9(1)
Reimbursements
9(1)
Medical Savings Accounts
10(1)
Taxes
11(4)
Deductibility as a Tax
12(1)
Property Taxes
12(2)
State and Local Income Taxes
14(1)
Global Tax Issues: Deductibility of Foreign Taxes
14(1)
Interest
15(5)
Allowed and Disallowed Items
15(4)
Restrictions on Deductibility and Timing Considerations
19(1)
Classification of Interest Expense
19(1)
Charitable Contributions
20(8)
Criteria for a Gift
21(1)
Qualified Organizations
22(1)
Time of Deduction
22(1)
Global Tax Issues: Choose the Charity Wisely
23(1)
Record-Keeping and Valuation Requirements
23(1)
Tax in the News: Spring Cleaning and Charitable Contributions
24(1)
Limitations on Charitable Contribution Deduction
24(4)
Miscellaneous Itemized Deductions
28(1)
Ethical Considerations: Job Hunting in Ski Country: A Deductible Expense?
29(1)
Other Miscellaneous Deductions
29(1)
Comprehensive Example of Schedule A
30(1)
Overall Limitation on Certain Itemized Deductions
30(3)
Tax Planning Considerations
33(4)
Effective Utilization of Itemized Deductions
33(1)
Utilization of Medical Deductions
33(1)
Timing the Payment of Deductible Taxes
34(1)
Protecting the Interest Deduction
34(1)
Assuring the Charitable Contribution Deduction
35(2)
Problem Materials
37
Passive Activity Losses
1(1)
The Tax Shelter Problem
2(1)
At-Risk Limits
3(3)
Tax in the News: Some Taxpayers' Deductions Are Too High, and Some Taxpayers' Deductions Are Too Low
4(2)
Passive Loss Limits
6(20)
Classification and Impact of Passive Income and Losses
6(3)
Taxpayers Subject to the Passive Loss Rules
9(1)
Passive Activities Defined
10(10)
Interaction of the At-Risk and Passive Activity Limits
20(1)
Special Passive Activity Rules for Real Estate Activities
21(1)
Tax in the News: Tax Breaks Make the Difference
22(2)
Ethical Considerations: Punching the Time Clock at Year-End
24(1)
Dispositions of Passive Interests
24(1)
Ethical Considerations: How Much Latitude Can a Taxpayer Take in Setting Fair Market Value?
25(1)
Tax Planning Considerations
26(2)
Utilizing Passive Losses
26(2)
Problem Materials
28
PART FOUR Special Tax Computation Methods, Payment Procedures, and Tax Credits
Alternative Minimum Tax
1(1)
Tax in the News: More Taxpayers Will Be Paying the AMT
3(1)
Individual Alternative Minimum Tax
3(24)
AMT Formula for Alternative Minimum Taxable Income (AMTI)
3(4)
AMT Formula: Other Components
7(1)
Tax in the News: Watch Out: The AMT May Get You
7(2)
Ethical Considerations: Minimizing the Tax Liability
9(1)
AMT Adjustments
10(12)
AMT Preferences
22(2)
Tax in the News: A Proposal to Reduce Complexity: The AMT Could Be a Big Hit
24(1)
Illustration of the AMT Computation
24(1)
AMT Credit
25(2)
Corporate Alternative Minimum Tax
27(6)
Repeal of AMT for Small Corporations
29(1)
Ethical Considerations: Avoiding the Corporate AMT
29(1)
AMT Adjustments
30(2)
TAX Preferences
32(1)
Exemption
32(1)
Other Aspects of the AMT
32(1)
Tax Planning Considerations
33(1)
Responding to Bob and Carol
33(1)
Avoiding Preferences and Adjustments
33(1)
Controlling the Timing of Preferences and Adjustments
33(1)
Taking Advantage of the AMT/Regular Tax Rate Differential
33(1)
Problem Materials
34
Tax Credits and Payment Procedures
1(1)
Tax Policy Considerations
3(1)
Overview and Priority of Credits
4(3)
Refundable versus Nonrefundable Credits
4(2)
General Business Credit
6(1)
Treatment of Unused General Business Credits
7(1)
Specific Business-Related Tax Credit Provisions
7(9)
Tax Credit for Rehabilitation Expenditures
7(2)
Business Energy Credits
9(1)
Work Opportunity Tax Credit
9(1)
Welfare-To-Work Credit
10(1)
Research Activities Credit
11(2)
Ethical Considerations: When Does ``Research'' Qualify as R & D?
13(1)
Low-Income Housing Credit
13(1)
Disabled Access Credit
14(1)
Credit for Small Employer Pension Plan Startup Costs
14(1)
Credit for Employer-Provided Child Care
15(1)
Other Tax Credits
16(11)
Earned Income Credit
16(1)
Ethical Considerations: Snagging the Earned Income Credit with the Aid of a Transient Child
17(1)
Tax in the News: It All Depends on What You Mean by ``Child''
18(1)
Tax Credit for Elderly or Disabled Taxpayers
18(2)
Foreign Tax Credit
20(1)
Adoption Expenses Credit
21(1)
Global Tax Issues: Sourcing Income in Cyberspace---Getting It Right When Calculating the Foreign Tax Credit
21(1)
Child Tax Credit
22(1)
Credit for Child and Dependent Care Expenses
23(2)
Education Tax Credits
25(1)
Credit for Certain Retirement Plan Contributions
26(1)
Payment Procedures
27(16)
Procedures Applicable to Employers
27(6)
Tax in the News: The IRS's Procedure for Assessing FICA Tax Liability Garners the Ultimate Approval
33(5)
Tax in the News: Continuing the Push into Cyberspace
38(1)
Procedures Applicable to Self-Employed Persons
39(1)
Global Tax Issues: Foreign ``Withholding Tax'' Performs an Important Role
39(4)
Tax Planning Considerations
43(3)
Foreign Tax Credit
43(1)
Credit for Child and Dependent Care Expenses
44(1)
Adjustments to Increase Withholding
45(1)
Adjustments to Avoid Overwithholding
45(1)
Problem Materials
46
PART FIVE Property Transactions
Property Transactions: Determination of Gain or Loss and Basis Considerations
1(1)
Determination of Gain or Loss
3(5)
Realized Gain or Loss
3(1)
Tax in the News: Watch Those Investments!
4(2)
Recognized Gain or Loss
6(1)
Nonrecognition of Gain or Loss
7(1)
Recovery of Capital Doctrine
7(1)
Basis Considerations
8(16)
Determination of Cost Basis
8(1)
Tax in the News: Determining the Basis of Shares Sold
9(3)
Gift Basis
12(1)
Tax in the News: Frequent-Flier Miles and Basis
12(2)
Ethical Considerations: Looking a Gift Horse in the Eye
14(1)
Property Acquired From a Decedent
15(1)
Tax in the News: Effect of 2001 Tax Legislation on the Basis of Inherited Property: Bad News/Good News!
16(1)
Ethical Considerations: Helping a Friend Increase Basis
17(2)
Disallowed Losses
19(2)
Conversion of Property from Personal Use to Business or Income-Producing Use
21(1)
Tax in the News: Avoiding the Wash Sale Rules: The Stomach Test
21(2)
Additional Complexities in Determining Realized Gain or Loss
23(1)
Summary of Basis Adjustments
24(1)
Tax Planning Considerations
24(5)
Tax Consequences of Alice's Proposed Transaction
24(2)
Cost Identification and Documentation Considerations
26(1)
Selection of Property for Making Gifts
27(1)
Selection of Property for Making Bequests
27(1)
Disallowed Losses
28(1)
Problem Materials
29
Property Transactions: Nontaxable Exchanges
1(1)
General Concept of a Nontaxable Exchange
2(1)
Like-Kind Exchanges---§ 1031
3(7)
Like-Kind Property
4(1)
Tax in the News: What Happens When the Exchange Is Not Completed Soon Enough?
5(1)
Exchange Requirement
6(1)
Boot
6(1)
Basis and Holding Period of Property Received
7(3)
Involuntary Conversions---§ 1033
10(6)
Involuntary Conversion Defined
10(1)
Ethical Considerations: Purchasing Property in Expectation of Condemnation
11(1)
Computing the Amount Realized
11(1)
Tax in the News: How Eminent Is the Right of Eminent Domain?
12(1)
Replacement Property
12(1)
Time Limitation on Replacement
13(1)
Nonrecognition of Gain
14(1)
Involuntary Conversion of a Personal Residence
15(1)
Reporting Considerations
16(1)
Sale of a Residence---§ 121
16(7)
Tax in the News: Income Tax Consequences on the Sale of a Personal Residence: A Mixed Message
16(1)
Requirements for Exclusion Treatment
17(1)
Exceptions to the Two-Year Ownership Rule
17(2)
Calculation of the Amount of the Exclusion
19(2)
Ethical Considerations: Maximizing the § 121 Exclusion
21(1)
Principal Residence
22(1)
Involuntary Conversion and Using §§ 121 and 1033
22(1)
Other Nonrecognition Provisions
23(2)
Exchange of Stock for Property---§ 1032
23(1)
Certain Exchanges of Insurance Policies---§ 1035
23(1)
Exchange of Stock for Stock of the Same Corporation---§ 1036
23(1)
Certain Reacquisitions of Real Property---§ 1038
23(1)
Transfers of Property Between Spouses or Incident to Divorce---§ 1041
24(1)
Rollovers into Specialized Small Business Investment Companies---§ 1044
24(1)
Rollover of Gain from Qualified Small Business Stock into Another Qualified Small Business Stock---§ 1045
24(1)
Tax Planning Considerations
25(3)
Like-Kind Exchanges
25(1)
Involuntary Conversions
26(1)
Sale of a Principal Residence
26(2)
Problem Materials
28
Property Transactions: Capital Gains and Losses
1(1)
General Considerations
2(2)
Rationale for Separate Reporting of Capital Gains and Losses
2(1)
General Scheme of Taxation
3(1)
Tax in the News: Switching Funds Creates a Loss
3(1)
Capital Assets
4(4)
Definition of a Capital Asset
4(2)
Ethical Considerations: Capital Assets for a Song
6(1)
Effect of Judicial Action
6(1)
Statutory Expansions
7(1)
Sale or Exchange
8(8)
Worthless Securities and § 1244 Stock
9(1)
Special Rule---Retirement of Corporate Obligations
9(1)
Tax in the News: A Deal Too Good to Pass Up
9(1)
Options
10(2)
Patents
12(1)
Franchises, Trademarks, and Trade Names
13(2)
Lease Cancellation Payments
15(1)
Tax in the News: Cancellation of a Lease Agreement
16(1)
Holding Period
16(5)
Review of Special Holding Period Rules
16(2)
Global Tax Issues: Trading ADRs on U.S. Stock Exchanges
18(1)
Special Rules for Short Sales
18(3)
Tax Treatment of Capital Gains and Losses of Noncorporate Taxpayers
21(9)
Capital Gain and Loss Netting Process
21(4)
Ethical Considerations: Which Capital Gain Tax Rate Applies?
25(1)
Alternative Tax on Net Capital Gain
25(1)
Treatment of Capital Losses
26(2)
Tax in the News: Increasing the Deduction for Net Capital Losses
28(1)
Reporting Procedures
29(1)
Tax Treatment of Capital Gains and Losses of Corporate Taxpayers
30(3)
Tax Planning Considerations
33(3)
Importance of Capital Asset Status
33(1)
Planning for Capital Asset Status
33(1)
Effect of Capital Asset Status in Transactions Other Than Sales
34(1)
Stock Sales
35(1)
Maximizing Benefits
35(1)
Global Tax Issues: Capital Gain Treatment in the United States and Other Countries
35(1)
Year-End Planning
36(1)
Problem Materials
36
Property Transactions: § 1231 and Recapture Provisions
1(1)
Section 1231 Assets
3(9)
Relationship to Capital Assets
3(1)
Tax in the News: A Definition for Unrecaptured § 1250 Gain
3(1)
Justification for Favorable Tax Treatment
4(1)
Property Included
5(1)
Property Excluded
5(1)
Special Rules for Certain § 1231 Assets
5(3)
Global Tax Issues: Canadian Slow Depreciation
8(1)
General Procedure for § 1231 Computation
8(4)
Section 1245 Recapture
12(3)
Ethical Considerations: Preparing Tax Returns without Proper Preparation
12(1)
Tax in the News: More Depreciation and More Depreciation Recapture
13(1)
Section 1245 Property
14(1)
Observations on § 1245
15(1)
Section 1250 Recapture
15(5)
Computing Recapture on Nonresidential Real Property
16(1)
Tax in the News: Demolition Creates Taxable Gain
16(1)
Computing Recapture on Residential Rental Housing
17(1)
Section 1250 Recapture Situations
18(1)
Unrecaptured § 1250 Gain (Real Estate 25% Gain)
18(2)
Considerations Common to §§ 1245 and 1250
20(2)
Exceptions
20(1)
Global Tax Issues: Exchange for Foreign Property Yields Recognized Recapture Gain
21(1)
Other Applications
22(1)
Special Recapture Provisions
22(2)
Special Recapture for Corporations
22(1)
Gain from Sale of Depreciable Property Between Certain Related Parties
22(2)
Global Tax Issues: Depreciation Recapture in Other Countries
24(1)
Intangible Drilling Costs
24(1)
Reporting Procedures
24(7)
Ethical Considerations: Lookback Required
31(1)
Tax Planning Considerations
31(1)
Timing of § 1231 Gain
31(1)
Timing of Recapture
31(1)
Postponing and Shifting Recapture
32(1)
Avoiding Recapture
32(1)
Problem Materials
32
PART SIX Accounting Periods, Accounting Methods, and Deferred Compensation
Accounting Periods and Methods
1(1)
Tax in the News: Tax Rate Reductions Create Tax Planning Opportunities
2(1)
Accounting Periods
3(7)
In General
3(1)
Specific Provisions for Partnerships, S Corporations, and Personal Service Corporations
4(3)
Making the Election
7(1)
Changes in the Accounting Period
7(1)
Taxable Periods of Less Than One Year
8(1)
Mitigation of the Annual Accounting Period Concept
9(1)
Ethical Considerations: Net Operating Loss Carryback Limits Can Put the Government Ahead of Creditors
10(1)
Accounting Methods
10(9)
Permissible Methods
10(1)
Cash Receipts and Disbursements Method---Cash Basis
11(1)
Tax in the News: The Horizontal-Severing Method
12(1)
Accrual Method
13(2)
Global Tax Issues: A Potential Tax Benefit from Moving Abroad
15(1)
Hybrid Method
16(1)
Change of Method
16(2)
Tax in the News: Trucking Company Permitted to Deduct Prepaid Licenses and Permits: What's the Big Deal?
18(1)
Special Accounting Methods
19(11)
Installment Method
19(5)
Ethical Considerations: A Related-Party Installment Sale Has Unexpected Results
24(1)
Disposition of Installment Obligations
24(1)
Interest on Deferred Taxes
25(1)
Electing Out of the Installment Method
25(1)
Long-Term Contracts
26(4)
Ethical Considerations: Deliberate Deferral
30(1)
Inventories
30(7)
Determining Inventory Cost
31(2)
Tax in the News: WorldCom's Dilemma
33(1)
Global Tax Issues: Inventory Acquired from a Foreign Subsidiary
34(2)
The LIFO Election
36(1)
Tax Planning Considerations
37(2)
Taxable Year
37(1)
Cash Method of Accounting
37(1)
Installment Method
37(1)
Completed Contract Method
38(1)
Inventories
38(1)
Problem Materials
39
Deferred Compensation
1(1)
Qualified Pension, Profit Sharing, and Stock Bonus Plans
3(16)
Tax in the News: Compensation and Performance
4(1)
Types of Plans
5(2)
Ethical Considerations: Conversion to Cash Balance Plans
7(1)
Qualification Requirements
7(2)
Tax in the News: Underfunded Pension Plans
9(3)
Tax Consequences to the Employee and Employer
12(1)
Global Tax Issues: Covering Expatriate Employees
12(3)
Limitations on Contributions to and Benefits from Qualified Plans
15(2)
§ 401(k) Plans
17(2)
Retirement Plans for Self-Employed Individuals
19(1)
Coverage Requirements
19(1)
Contribution Limitations
19(1)
Individual Retirement Accounts (IRAs)
20(9)
General Rules
20(6)
Penalty Taxes for Excess Contributions
26(1)
Taxation of Benefits
26(3)
Nonqualified Deferred Compensation Plans
29(4)
Underlying Rationale for Tax Treatment
29(1)
Global Tax Issues: Moving Offshore
29(1)
Tax Treatment to the Employer and Employee
30(2)
Tax in the News: How Much Is Too Much?
32(1)
Ethical Considerations: Taxing Athletes' Huge Salaries
33(1)
Restricted Property Plans
33(3)
General Provisions
33(1)
Substantial Risk of Forfeiture
34(1)
Special Election Available
34(1)
Employer Deductions
35(1)
Stock Options
36(3)
In General
36(1)
Incentive Stock Options
36(2)
Nonqualified Stock Options
38(1)
Tax Planning Considerations
39(4)
Deferred Compensation
39(1)
Qualified Plans
39(1)
Self-Employed Retirement Plans
40(1)
Individual Retirement Accounts
40(1)
Comparison of § 401(k) Plan with IRA
40(1)
Nonqualified Deferred Compensation (NQDC) Plans
41(1)
Stock Options
42(1)
Flexible Benefit Plans
43(1)
Problem Materials
43
PART SEVEN Corporations and Partnerships
Corporations and Partnerships
1(1)
What Is a Corporation?
3(1)
Compliance with State Law
3(1)
Entity Classification Prior to 1997
3(1)
Entity Classification After 1996
4(1)
Income Tax Considerations
4(12)
General Tax Consequences of Different Forms of Business Entities
4(1)
Individuals and Corporations Compared---An Overview
5(1)
Ethical Considerations: Who Gets the Deduction?
5(1)
Specific Provisions Compared
6(4)
Deductions Available Only to Corporations
10(3)
Determination of Corporate Tax Liability
13(1)
Tax in the News: One Way to Reduce Taxes
13(1)
Corporate Filing Requirements
14(1)
Reconciliation of Corporate Taxable Income and Accounting Income
14(2)
Forming the Corporation
16(4)
Capital Contributions
16(1)
Transfers to Controlled Corporations
16(1)
Tax in the News: A Weird Twist on the Debt versus Equity Issue
17(3)
Operating the Corporation
20(3)
Dividend Distributions
20(1)
Global Tax Issues: Transferring Assets to Foreign Corporations---Forget § 351?
21(1)
Ethical Considerations: Year-End Bonuses That Serve a Purpose
22(1)
Stock Redemptions
23(1)
Liquidating the Corporation
23(2)
General Rule of § 331
23(1)
Exception to the General Rule
24(1)
Basis Determination---§§ 334 and 338
24(1)
Effect of the Liquidation on the Corporation
24(1)
The S Election
25(5)
Justification for the Election
25(1)
Tax in the News: Why No Salaries?
26(1)
Operational Rules
27(3)
Partnerships
30(5)
Nature of Partnership Taxation
30(1)
Partnership Formation
30(2)
Partnership Operation
32(3)
Tax Planning Considerations
35(3)
Corporate versus Noncorporate Forms of Business Organization
35(1)
Regular Corporation versus S Status
35(1)
Global Tax Issues: Taxing the Income of Foreign Corporations
36(1)
Use of an Entity to Reduce the Family Income Tax Burden
36(2)
Problem Materials
38
APPENDIXES
Tax Rate Schedules and Tables
1(1)
Tax Forms
1(1)
Glossary of Tax Terms
1(1)
Table of Code Sections Cited
1(9)
Table of Regulations Cited
10(3)
Table of Revenue Procedures and Revenue Rulings Cited
13
Citator Example
1(1)
Comprehensive Tax Return Problems
1(1)
Table of Cases Cited
1(1)
Depreciation
1(1)
Subject Index
1

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