Description
South-Western Federal Taxation 2017: Essentials of Taxation: Individuals and Business Entities by William A. Raabe EBOOK PDF Instant Download
Table of Contents
Preface
Table of Contentss
Part 1: The World of Taxation
Chapter 1: Introduction to Taxation
The Structure Of Tax Systems
Tax Rates
Tax Fact: Carrying the Tax Burden
Tax Bases
Incidence Of Taxation
Types Of Taxes
Taxes On The Production And Sale Of Goods
Global Tax Issues: Why Is Gasoline Expensive? It Dependson Where You Live
Employment Taxes
Taxes At Death
Gift Tax
Property Taxes
Tax Fact: A Profile of Tax Collections
Taxes On Privileges And Rights
Tax in the News: The Backdoor Tax Increase
Income Taxes
Tax Fact: What Is the U.S. Tax Burden?
Bridge Discipline: Bridge to Political Science and Sociology
Concept Summary: Overview of Taxes in the United States
Financial Disclousre Insights: What Do You Mean by “Income”Anyway?
Income Taxation Of Business Entities
Proprietorships
C Corporations
Partnerships
S Corporations
Limited Liability Companies And Limited Liability Partnerships
Dealings Between Individuals And Entities
Financial Disclosure Insights: Book-Tax Differences
Tax Planning Fundamentals
Overview Of Tax Planning And Ethics
A General Framework For Income Tax Planning
Tax Minimization Strategies Related To Income
Tax Minimization Strategies Related To Deductions
Tax Fact: The Rewards of Tax Planning
Tax Minimization Strategies Related To Tax Rates
Tax Fact: The U.S. Federal Income Tax
Tax Minimization Strategies Related To Credits
Thinking Outside The Framework
Bridge Discipline: Bridge to Political Science, Economics, Health Care
Understanding The Federal Tax Law
Revenue Needs
Economic Considerations
Social Considerations
Equity Considerations
Political Considerations
Influence Of The Internal Revenue Service
Tax Fact: The Costs of Complexity
Influence Of The Courts
Summary
Refocus on the Big Picture: A Typical Tax Year for a Modern Family
Chapter 2: Working with the Tax Law
The Big Picture: Researching Tax Questions
Tax Law Sources
Statutory Sources Of The Tax Law
Tax Fact: Scope of the U.S. Tax System
Tax in the News: Origin of the April 15 Tax Day
Administrative Sources Of The Tax Law
Judicial Sources Of The Tax Law
Concept Summary: Federal Judicial System: Trial Courts
Bridge Discipline: Bridge to Public Policy
Working With The Tax Law—Tax Research
Identifying The Problem
Refining The Problem
Locating The Appropriate Tax Law Sources
Bridge Discipline: Bridge to Business Law
Assessing Tax Law Sources
Arriving At The Solution Or At Alternative Solutions
Communicating Tax Research
Following Up
Conducting Online Tax Research
Tax Research On The CPA Examination
Financial Disclourse Insights: Where Does GAAP Come From?
Bridge Discipline: Bridge to Regulation and Oversight
Refocus on the Big Picture: Researching Tax Questions
Chapter 3: Taxes on the Financial Statements
The Big Picture: Taxes on the Financial Statements
Book-Tax Differences
Different Reporting Entities
Tax in the News: The Watchdog is Watching
Different Taxes
Different Methods
Financial Disclourse Insights: Supersized Goodwill
Tax Return Disclosures
Concept Summary: Income Reporting: Book versus Tax
Income Taxes In The Financial Statements
GAAP Principles
Financial Disclourse Insights: The Book-Tax Income Gap
Global Tax Issues: Accounting for Income Taxes in International Standards
Valuation Allowance
Tax Planning Strategies: Releasing Valuation Allowances
Tax Disclosures In The Financial Statements
Financial Disclosure Insights: Tax Losses and the Deferred Tax Asset
Financial Disclourse Insights: Valuation Allowances for NOLs
Tax Fact: Effective Tax Rates for Selected Fortune 100 Companies
Concept Summary: Steps in Determining the Book Tax Expense
Tax Fact: Effective Tax Rates Examined
Special Issues
Tax Planning Strategies: Tax Savings Are Not Always Created Equal
Concept Summary: Disclosures Under ASC 740-10 (FIN 48)
Financial Disclouse Insights: Corporate Tax Rate Cuts: Be Careful What You Wish For
Tax Planning Strategies: Reducing Effective Tax Rates withASC 740-30 (APB 23) Can Backfire
Tax in the News: The APB 23 Deferral
Summary
Benchmarking
Dynamic Benchmarking
Bridge Discipline: Bridge to Financial Analysis
Refining The Analysis
Sustaining The Tax Rate
Uses Of Benchmarking Analysis
Concept Summary: Benchmarking Analysis
Refocus on the Big Picture: Taxes on the Financial Statements
Part 2: Structure of the Federal Income Tax
Chapter 4: Gross Income
The Big Picture: Just What is Included in Gross Income?
The Tax Formula
Components Of The Tax Formula
Global Tax Issues: From “All Sources” Is a Broad Definition
Gross Income—What Is It?
Concepts Of Income
Financial Disclourse Insights: What Does “Income” Mean to You?
Comparing Accounting And Tax Concepts Of Income
Form Of Receipt
Concept Summary: Gross Income Concepts
Year Of Inclusion
Taxable Year
Tax in the News: Academy Awards Participants Have a Tax Problem
Accounting Methods
Tax Planning Strategies: Cash Receipts Method
Bridge Discipline: Bridge to Economics and Finance
Special Rules For Cash Basis Taxpayers
Tax in the News: Congress Rescues Lottery Winners from Constructive Receipt Problems
Special Rules For Accrual Basis Taxpayers
Tax Planning Strategies: Prepaid Income
Concept Summary: Income Tax Accounting
Income Sources
Personal Services
Income From Property
Tax Fact: How Much and What Type of Income?
Global Tax Issues: Which Foreign Dividends Get the Discounted Rate?
Tax Fact: Business Income and Loss
Income Received By An Agent
Tax Planning Strategies: Techniques for Reducing Investment Income
Specific Items Of Gross Income
Gains And Losses From Property Transactions
Interest On Certain State And Local Government Obligations
Bridge Discipline: Bridge to Public Economics
Life Insurance Proceeds
Tax Planning Strategies: Life Insurance
Income From Discharge Of Indebtedness
Tax Benefit Rule
Imputed Interest On Below-market Loans
Financial Discloure Insights: Loans to Executives Prohibited
Improvements On Leased Property
Concept Summary: Income Recognition Rules
Refocus on the Big Picture: Just What is Included in Gross Income?
Chapter 5: Business Deductions
The Big Picture: Calculating Deductible Expenses
Overview Of Business Deductions
Ordinary And Necessary Requirement
Reasonableness Requirement
Tax Planning Strategies: Unreasonable Compensation
The Timing Of Expense Recognition
Cash Method Requirements
Tax Planning Strategies: Time Value of Tax Deductions
Accrual Method Requirements
Expenses Accrued To Related Parties
Disallowance Possibilities
Public Policy Limitations
Global Tax Issues: Overseas Gun Sales Result in Large Fines
Political Contributions And Lobbying Activities
Excessive Executive Compensation
Tax in the News: Do Deduction Limits Affect Executive Compensation?
Investigation Of A Business
Transactions Between Related Parties
Expenses And Interest Related To Tax-Exempt Income
Other Disallowance Possibilities
Research And Experimental Expenditures
Expense Method
Deferral And Amortization Method
Domestic Production Activities Deduction
Calculation Of The Domestic Production Activities Deduction
Qualified Production Activities Income
Eligible Taxpayers
Charitable Contributions
Property Contributions
Limitations Imposed On Charitable Contribution Deductions
Other Business Expenses
Interest Expense
Taxes
Cost Recovery Allowances
Overview
Cost Recovery: In General
Tax Fact: Cost Recovery by Any Other Name
Bridge Discipline: Bridge to Finance
Modified Accelerated Cost Recovery System (MACRS)
Concept Summary: MACRS: Class Lives, Methods, and Conventions
MACRS For Personal Property
MACRS For Real Estate
Straight-Line Election
Additional First-Year Depreciation
Financial Disclosure Insights: Tax and Book Depreciation
Election To Expense Assets (§ 179)
Tax in the News: Cost Segregation
Bridge Discipline: Bridge to Economics and the Business Cycle
Business And Personal Use Of Automobiles And Other Listed Property
Concept Summary: Listed Property Cost Recovery
Bridge Discipline: Bridge to Finance and Economics
Alternative Depreciation System (ADS)
Amortization
Tax Planning Strategies: Structuring the Sale of a Business
Depletion
Intangible Drilling And Development Costs (IDCs)
Depletion Methods
Tax Planning Strategies: Switching Depletion Methods
Cost Recovery Tables
Refocus on the Big Picture: Calculating Deductible Expenses
Chapter 6: Losses and Loss Limitations
The Big Picture: Receiving Tax Benefits from Losses
Bad Debts
Specific Charge-Off Method
Tax Fact: Just How Good Is Your Credit?
Concept Summary: The Tax Treatment of Bad Debts Using the Specific Charge-Off Method
Business Versus Nonbusiness Bad Debts
Loans Between Related Parties
Worthless Securities And Small Business Stock Losses
Worthless Securities
Small Business Stock (§ 1244 Stock) Losses
Tax Planning Strategies: Maximizing the Benefits of Small Business(§ 1244 Stock) Losses
Casualty And Theft Losses
Definition Of Casualty
Deduction Of Casualty Losses
Tax Planning Strategies: Documentation of Related-Taxpayer Loans, Casualty Losses, and Theft Losses
Definition Of Theft
Tax in the News: The Tax Consequences of Lost Bitcoins
Loss Measurement
Casualty And Theft Losses Of Individuals
Concept Summary: Casualty Gains and Losses
Net Operating Losses
Introduction
Carryback And Carryover Periods
The Tax Shelter Problem
Bridge Discipline: Bridge to Finance
At-risk Limitations
Concept Summary: Calculation of At-Risk Amount
Passive Activity Loss Limits
Classification And Impact Of Passive Activity Income And Loss
Tax in the News: “Passive” under the Tax Law May Not Be “Passive”in the Real World
Tax in the News: If You Can’t Trust Your Tax Preparer, Who Can You Trust?
Taxpayers Subject To The Passive Activity Loss Rules
Rules For Determining Passive Activities
Material Participation
Concept Summary: Tests to Determine Material Participation
Tax in the News: The Passive Activity Loss Rules Are a Trap for the Novice Landlord
Rental Activities
Concept Summary: Passive Activity Loss Rules: Key Issues and Answers
Interaction Of At-Risk And Passive Activity Loss Limits
Concept Summary: Treatment of Losses Subject to the At-Risk and Passive Activity Loss Limitations
Special Rules For Real Estate
Tax in the News: Full-Time Employees May Face Difficulty Showing Real Estate Professional Status
Disposition Of Passive Activities
Tax Planning Strategies: Utilizing Passive Activity Losses
Refocus on the Big Picture: Receiving Tax Benefits from Losses
Part 3: Property Transactions
Chapter 7: Property Transactions: Basis, Gain and Loss, and Nontaxable Exchanges
The Big Picture: Calculating Basis and Recongnized Gain for Property Transactions
Determination Of Gain Or Loss
Realized Gain Or Loss
Bridge Discipline: Bridge to Financial Accounting
Tax in the News: Tax Implications of Virtual Currency (Bitcoin)
Recognized Gain Or Loss
Concept Summary: Realized and Recognized Gain or Loss
Nonrecognition Of Gain Or Loss
Basis Considerations
Determination Of Cost Basis
Gift Basis
Tax Planning Strategies: Gift Planning
Property Acquired From A Decedent
Tax Planning Strategies: Property Acquired from a Decedent
Disallowed Losses
Concept Summary: Wash Sale Rules
Tax Planning Strategies: Avoiding Wash Sales
Conversion Of Property From Personal Use To Business Or Income-Producing Use
Tax in the News: Triple the Misery!
Summary Of Basis Adjustments
Concept Summary: Adjustments to Basis
General Concept Of A Nontaxable Exchange
Like-Kind Exchanges—§ 1031
Tax Planning Strategies: Like-Kind Exchanges
Like-Kind Property
Exchange Requirement
Boot
Basis And Holding Period Of Property Received
Bridge Discipline: Bridge to Economics
Involuntary Conversions—§ 1033
Involuntary Conversion Defined
Replacement Property
Concept Summary: Involuntary Conversions: Replacement Property Tests
Time Limitation On Replacement
Nonrecognition Of Gain
Tax Planning Strategies: Recognizing Involuntary Conversion Gains
Other Nonrecognition Provisions
Transfer Of Assets To Business Entity—§§ 351 And 721
Exchange Of Stock For Property—§ 1032
Certain Exchanges Of Insurance Policies—§ 1035
Exchange Of Stock For Stock Of The Same Corporation—§ 1036
Rollovers Into Specialized Small Business Investment Companies—§ 1044
Sale Of A Principal Residence—§ 121
Transfers Of Property Between Spouses Or Incident To Divorce—§ 1041
Refocus on the Big Picture: Calculating Basis and Recognized Gain for Property Transactions
Chapter 8: Property Transactions: Capital Gains and Losses, Section 1231, and Recapture Provisions
The Big Picture: Capital Gains and Losses § 1231 Gains and Losses, and Recapture
General Scheme Of Taxation
Capital Assets
Definition Of A Capital Asset
Statutory Expansions
Sale Or Exchange
Worthless Securities And § 1244 Stock
Tax in the News: Bankruptcy and Worthless Stock
Retirement Of Corporate Obligations
Options
Concept Summary: Options: Consequences to the Grantor and Grantee
Patents
Franchises, Trademarks, And Trade Names
Concept Summary: Franchises: Consequences to the Franchisor and Franchisee
Lease Cancellation Payments
Holding Period
Special Holding Period Rules
Short Sales
Tax Planning Strategies: Timing Capital Gains
Tax Treatment Of Capital Gains And Losses Of Noncorporate Taxpayers
Capital Gains
Tax Planning Strategies: Gifts of Appreciated Securities
Global Tax Issues: Capital Gain Treatment in the United States and Other Countries
Concept Summary: Capital Gains of Noncorporate Taxpayers Type of Asset
Capital Losses
Capital Gain And Loss Netting Process
Tax Planning Strategies: Matching Gains with Losses
Small Business Stock
Tax Treatment Of Capital Gains And Losses Of Corporate Taxpayers
Section 1231 Assets
Tax Fact: Capital Gains for the Wealthy?
Relationship To Capital Assets
Property Included
Property Excluded
Tax in the News: Loss from Cattle Rustling
Casualty Or Theft And Nonpersonal-Use Capital Assets
General Procedure For § 1231 Computation
Concept Summary: Section 1231 Netting Procedure
Section 1245 Recapture
Bridge Discipline: Bridge to Financial Accounting
Section 1245 Property
Observations On § 1245
Tax Planning Strategies: Depreciation Recapture and § 179
Section 1250 Recapture
Tax in the News: Building or Tangible Personal Property?
Concept Summary: Comparison of § 1245 and § 1250 Depreciation Recapture
Unrecaptured § 1250 Gain (Real Estate 25% Gain)
Additional Recapture For Corporations
Tax Planning Strategies: Selling Depreciable Real Estate
Exceptions To §§ 1245 And 1250
Gifts
Death
Charitable Transfers
Certain Nontaxable Transactions
Like-Kind Exchanges And Involuntary Conversions
Reporting Procedures
Tax Planning Strategies: Timing of Recapture
Refocus on the Big Picture: Capital Gains and Losses, § 1231 Gains and Losses and Recapture
Part 4: Taxation of Individuals
Chapter 9: Individuals as the Taxpayer
The Big Picture: A Divided Household
The Individual Tax Formula
Concept Summary: Individual Income Tax Formula
Components Of The Tax Formula
Standard Deduction
Basic And Additional Standard Deduction
Special Limitations On The Standard Deduction For Dependents
Personal Exemptions
Dependency Exemptions
Qualifying Child
Concept Summary: Tiebreaker Rules for Claiming Qualifying Child
Qualifying Relative
Tax Planning Strategies: Multiple Support Agreements and the Medical Expense Deduction
Other Rules For Dependency Exemptions
Tax Planning Strategies: Problems with a Joint Return
Comparison Of Categories For Dependency Exemptions
Phaseout Of Exemptions
Concept Summary: Tests for Dependency Exemption
Filing Status And Filing Requirements
Tax in the News: How to Subtly Pluck the Chicken
Filing Status
Bridge Discipline: Bridge to Equity or Fairness
Global Tax Issues: Filing a Joint Return
Filing Requirements
Tax Determination
Tax Table Method
Tax Rate Schedule Method
Tax Planning Strategies: Shifting Income and Deductions across Time
Computation Of Net Taxes Payable Or Refund Due
Tax in the News: Same-Sex Couples May Face a Tax Filing Nightmare
Additional Taxes For Certain Individuals
Kiddie Tax—Unearned Income Of Children Taxed At Parents’ Rate
Tax Planning Strategies: Income of Certain Children
Tax Return Filing Procedures
Selecting The Proper Form
Tax Fact: What Form of Tax Compliance Is Right for You?
The E-File Approach
When And Where To File
Modes Of Payment
Refocus on the Big Picture: A Divided Household
Chapter 10: Individuals: Income, Deductions, and Credits
The Big Picture: The Tax Implications of Life!
Overview Of Income Provisions Applicable To Individuals
Specific Inclusions Applicable To Individuals
Bridge Discipline: Bridge to Economics and Finance
Alimony And Separate Maintenance Payments
Tax in the News: Social Security Benefits as a Source of Federal Revenue
Prizes And Awards
Unemployment Compensation
Social Security Benefits
Specific Exclusions Applicable To Individuals
Gifts And Inheritances
Tax in the News: Complying with Documentation Requirements Is Critical, Even for IRS Agents
Scholarships
Damages
Concept Summary: Taxation of Damages
Workers’ Compensation
Accident And Health Insurance Benefits
Educational Savings Bonds
Itemized Deductions
Medical Expenses
Tax in the News: The Debate Continues over the Future of Itemized Deductions
Taxes
Tax Planning Strategies: Timing the Payment of Deductible Taxes
Interest
Concept Summary: Deductibility of Personal, Student Loan, Investment, and Mortgage Interest
Charitable Contributions
Global Tax Issues: Choose the Charity Wisely
Concept Summary: Determining the Deduction for Contributions of Property by Individuals
Miscellaneous Itemized Deductions Subject To 2 Percent Floor
Other Miscellaneous Deductions
Overall Limitation On Certain Itemized Deductions
Tax Planning Strategies: Effective Utilization of Itemized Deductions
Individual Tax Credits
Adoption Expenses Credit
Child Tax Credit
Credit For Child And Dependent Care Expenses
Education Tax Credits
Earned Income Credit
Affordable Care Act Provisions
Individual Shared Responsibility Payment
Premium Tax Credit
Refocus on the Big Picture: The Tax Implications of Life!
Chapter 11: Individuals as Employees and Proprietors
The Big Picture: Self-Employed Versus Employee—Whats the Difference?
Employee Versus Self-Employed
Factors Considered In Classification
Bridge Discipline: Bridge to Equity or Fairness and Business Law
Tax Planning Strategies: Self-Employed Individuals
Exclusions Available To Employees
Employer-Sponsored Accident And Health Plans
Medical Reimbursement Plans
Bridge Discipline: Bridge to Economic and Societal Needs
Long-Term Care Insurance Benefits
Meals And Lodging Furnished For The Convenience Of The Employer
Group Term Life Insurance
Qualified Tuition Reduction Plans
Other Employee Fringe Benefits
Tax in the News: Frequent-Flyer Miles Will Not Be Taxed
Cafeteria Plans
Flexible Spending Plans
Concept Summary: Employee Fringe Benefits
General Classes Of Excluded Benefits
Concept Summary: General Classes of Fringe Benefits
Foreign Earned Income
Employee Expenses
Transportation Expenses
Travel Expenses
Tax Planning Strategies: Transportation and Travel Expenses
Moving Expenses
Concept Summary: Meeting and Not Meeting the Distance Test
Global Tax Issues: Expatriates and the Moving Expense Deduction
Tax Planning Strategies: Moving Expenses
Education Expenses
Tax Planning Strtegies: Education Expenses
Targeted Tuition Deduction
Entertainment Expenses
Tax Planning Strategies: Entertainment Expenses
Other Employee Expenses
Classification Of Employee Expenses
Tax Planning Strategies: Unreimbursed Employee Business Expenses
Contributions To Individual Retirement Accounts
Concept Summary: Traditional IRAs and Roth IRAs Compared
Individuals As Proprietors
Income Of A Proprietorship
Deductions Related To A Proprietorship
Retirement Plans For Self-Employed Individuals
Tax Planning Strategies: Important Dates Related to IRAs and Keogh Plans
Tax Planning Strategies: Factors Affecting Retirement Plan Choices
Accounting Periods And Methods
Estimated Tax Payments
Hobby Losses
General Rules
Presumptive Rule Of § 183
Determination Of The Deductible Amount
Refocus on the Big Picture: Self-Employed Versus Employee—What’s the Difference?
Part 5: Business Entities
Chapter 12: Corporations: Organization, Capital Structure, and Operating Rules
The Big Picture: Growing into the Corporate Form
An Introduction To Corporate Tax
Double Taxation Of Corporate Income
Global Tax Issues: Choice of Organizational Form When Operating Overseas
Comparison Of Corporations And Other Forms Of Doing Business
Tax Fact: Corporations’ Reporting Responsibilities
Bridge Discipline: Bridge to Finance
Concept Summary: Tax Treatment of Business Forms Compared
Nontax Considerations
Limited Liability Companies
Entity Classification
Organization Of And Transfers To Controlled Corporations
General Rules
Transfer Of Property
Concept Summary: Shareholder Consequences: Taxable Corporate Formation versus Tax-Deferred § 351 Tr
Stock
Control Of The Corporation
Tax Planning Strategies: Utilizing § 351
Assumption Of Liabilities—§ 357
Global Tax Issues: Does § 351 Cover the Incorporation of a Foreign Business?
Concept Summary: Tax Consequences of Liability Assumption
Tax Planning Strategies: Avoiding § 351
Basis Determination And Other Issues
Concept Summary: Tax Consequences to the Shareholders and Corporation: With and Without the Applicat
Recapture Considerations
Tax Planning Strategies: Other Considerations When Incorporating a Business
Capital Structure Of A Corporation
Capital Contributions
Tax in the News: States Battle Each Other to Lure New Businesses (and Jobs)
Debt In The Capital Structure
Tax in the News: A Careful Evaluation May Be Required to Distinguish Debt from Equity
Corporate Operations
Deductions Available Only To Corporations
Tax Planning Strategies: Organizational Expenditures
Determining The Corporate Income Tax Liability
Tax Liability Of Related Corporations
Controlled Groups
Procedural Matters
Filing Requirements For Corporations
Estimated Tax Payments
Schedule M–1—Reconciliation Of Income (loss) Per Books With Income Per Return
Concept Summary: Conceptual Diagram of Schedule M–1 (Form 1120)
Schedule M–2—Analysis Of Unappropriated Retained Earnings Per Books
Bridge Discipline: Bridge to Financial Accounting
Schedule M–3—Net Income (loss) Reconciliation For Corporations With Total Assets Of $10 Million
Effect Of Taxes On Financial Statements
Refocus on the Big Picture: Growing into the Corporate Form
Chapter 13: Corporations: Earnings & Profits and Distributions
The Big Picture: Taxing Corporate Distributions
Corporate Distributions—overview
Earnings And Profits (E & P)
Tax Fact: Who Pays Dividends?
Computation Of E & P
Summary Of E & P Adjustments
Concept Summary: Computing E & P
Allocating E & P To Distributions
Bridge Discipline: Bridge to Finance
Tax Planning Strategies: Corporate Distributions
Concept Summary: Allocating E & P to Distributions
Bridge Discipline: Bridge to Investments
Noncash Dividends
Noncash Dividends—Effect On The Shareholder
Noncash Dividends—Effect On The Corporation
Bridge Discipline: Bridge to Finance
Constructive Dividends
Types Of Constructive Dividends
Global Tax Issues: A Worldwide View of Dividends
Tax in the News: Hard Work Pays Off!
Tax Treatment Of Constructive Dividends
Tax Planning Strategies: Constructive Dividends
Stock Dividends
Stock Redemptions
Bridge Discipline: Bridge to Finance
Global Tax Issues: Non-U.S. Shareholders Prefer Capital Gain Treatment in Stock Redemptions
Tax Planning Strategies: Stock Redemptions
Corporate Liquidations
The Liquidation Process
Liquidating And Nonliquidating Distributions Compared
Tax Planning Strategies: Corporate Liquidations
Restrictions On Corporate Accumulations
Refocus on the Big Picture: Taxing Corporate Distributions
Chapter 14: Partnerships and Limited Liability Entities
The Big Picture: The Tax Consequences of Partnership Formation and Operations
Overview Of Partnership Taxation
Forms Of Doing Business—Federal Tax Consequences
Tax Fact: Partnership Power
Definition Of A Partnership
Bridge Discipline: Bridge to Finance
Partnership Taxation And Reporting
Partner’s Ownership Interest In A Partnership
Bridge Discipline: Bridge to Business Law
Formation Of A Partnership: Tax Effects
Gain Or Loss On Contributions To The Partnership
Concept Summary: Partnership/LLC Taxation
Exceptions To Nonrecognition
Tax Issues Related To Contributed Property
Inside And Outside Bases
Tax Accounting Elections
Concept Summary: Partnership Formation and Basis Computation
Initial Costs Of A Partnership
Operations Of The Partnership
Schedules K And K–1
Global Tax Issues: Withholding Procedures Apply to Foreign Partners
Concept Summary: Tax Reporting of Partnership Activities
Partnership Allocations
Basis Of A Partnership Interest
Bridge Discipline: Bridge to Financial Accounting
Tax Fact: What Do Partnerships Do?
Partner’s Basis, Gain, And Loss
Loss Limitations
Tax Planning Strategies: Make Your Own Tax Shelter
Concept Summary: Partner’s Basis in Partnership Interest
Transactions Between Partner And Partnership
Guaranteed Payments
Other Transactions Between A Partner And A Partnership
Partners As Employees
Tax Planning Strategies: Transactions between Partners and Partnerships
Concept Summary: Partner-Partnership Transactions
Limited Liability Companies
Taxation Of LLCs
Advantages Of An LLC
Disadvantages Of An LLC
Concept Summary: Advantages and Disadvantages of the Partnership Form
Summary
Refocus on the Big Picture: The Tax Consequences of Partnership Formation and Operations
Chapter 15: S Corporations
The Big Picture: Converting a C Corporation to an S Corporation
An Overview Of S Corporations
Qualifying For S Corporation Status
Definition Of A Small Business Corporation
Bridge Discipline: Bridge to Business Law
Tax Planning Strategies: When to Elect S Corporation Status
Tax Fact: The Business of S Corporations
Tax Planning Strategies: Beating the 100-Shareholder Limit
Making The Election
Shareholder Consent
Tax Planning Strategies: Making a Proper Election
Loss Of The Election
Tax Planning Strategies: Preserving the S Election
Operational Rules
Computation Of Taxable Income
Allocation Of Income And Loss
Tax Fact: A “Small” Business Corporation
Tax Planning Strategies: Salary Structure
Tax Treatment Of Distributions To Shareholders
Tax in the News: Some Guidelines for S Corporation Shareholder-Employee Compensation
Tax Planning Strategies: The Accumulated Adjustments Account
Concept Summary: Distributions from an S Corporation
Tax Treatment Of Noncash Distributions By The Corporation
Concept Summary: Consequences of Noncash Distributions
Shareholder’s Basis In S Stock
Tax Planning Strategies: Working with Suspended Losses
Treatment Of Losses
Tax Planning Strategies: Loss Considerations
Concept Summary: Treatment of S Corporation Losses
Other Operational Rules
Bridge Discipline: Bridge to Public Finance
Entity-Level Taxes
Tax On Pre-Election Built-In Gain
Tax Planning Strategies: Managing the Built-In Gains Tax
Tax Fact: No Double Taxation?
Passive Investment Income Penalty Tax
Tax in the News: The Self-Employment Income Advantage
Tax Planning Strategies: Avoid PII Pitfalls
Tax Fact: The S Corporation Economy
Summary
Refocus on the Big Picture: Converting a C Corporation to an S Corporation
Part 6: Special Business Topics
Chapter 16: Multijurisdictional Taxation
The Big Picture: Going International
The Multijurisdictional Taxpayer
U.S. Taxation Of Multinational Transactions
Bridge Discipline: Bridge to International Law
Sources Of Law
Tax Issues
Tax Fact: U.S. Income Tax Treaties in Force
Financial Disclosourse Insights: Effective Tax Strategies Using Overseas Operations
Tax Fact: Where Do We Stand?
Global Tax Issues: Deferral and Repatriation
Tax in the News: The IRS Watches from Abroad
Tax Planning Strategies: Sourcing Income from Sales of Inventory
Tax Fact: Corporate Use of the Foreign Tax Credit
Tax Planning Strategies: Utilizing the Foreign Tax Credit
Financial Disclourse Insights: Overseas Operations and Book-Tax Differences
Tax Planning Strategies: Avoiding Constructive Dividends
Tax in the News: Taxes Take a Smaller Bite Out of Apple
Tax Fact: The Inbound Sector
Financial Disclosure Insights: Tax Rates in Non-U.S. Jurisdictions
Concept Summary: U.S. Income Tax Treatment of a Non-U.S. Person’s Income
Crossing State Lines: State And Local Income Taxation In The United States
Tax Fact: State Tax Revenue Sources
Sources Of Law
Tax in the News: So Where Did You Work Today?
Tax Issues
Tax Planning Strategies: Nexus: To Have or Have Not
Financial Disclosure Insights: State/Local Taxes and the Tax Expense
Concept Summary: Corporate Multistate Income Taxation
Tax Planning Strategies: Where Should My Income Go?
Common Challenges
Authority To Tax
Bridge Discipline: Bridge to Cost Accounting and ExecutiveCompensation
Division Of Income
Transfer Pricing
Bridge Discipline: Bridge to Economic Development and Political Science
Tax Havens
Interjurisdictional Agreements
Refocus on the Big Picture: Going International
Chapter 17: Business Tax Credits and Corporate Alternative Minimum Tax
The Big Picture: Dealing with Tax Credits and the AMT
Business-Related Tax Credit Provisions
General Business Credit
Tax Fact: Where Have All the Credits Gone?
Tax in the News: Many Taxpayers Become “Nonpayers” Because of Tax Credits
Bridge Discipline: Bridge to Finance
Tax Credit For Rehabilitation Expenditures
Work Opportunity Tax Credit
Research Activities Credit
Energy Credits
Disabled Access Credit
Credit For Small Employer Pension Plan Startup Costs
Global Tax Issues: Sourcing Income in Cyberspace—Getting It Right When Calculating the Foreign Ta
Credit For Employer-Provided Child Care
Foreign Tax Credit
Small Employer Health Insurance Credit
Concept Summary: Tax Credits
Corporate Alternative Minimum Tax
The AMT Formula
AMT Adjustments
Tax Preferences
Tax Planning Strategies: Avoiding Preferences and Adjustments
Adjusted Current Earnings (ACE)
Concept Summary: Determining the ACE Adjustment
Concept Summary: How Various Transactions Affect ACE and E & P
Alternative Tax Net Operating Loss Deduction
Computation Of Alternative Minimum Taxable Income
Tax Planning Strategies: Optimum Use of the AMT and Regular Corporate Income Tax Rate Difference
AMT Rate And Exemption
Tax Planning Strategies: Controlling the Timing of Preferences and Adjustments
Minimum Tax Credit
Other Aspects Of The AMT
Tax Planning Strategies: The S Corporation Option
Tax in the News: The Corporate AMT
Individual Alternative Minimum Tax
Refocus on the Big Picture: Dealing With Tax Credits and the AMT
Chapter 18: Comparative Forms of Doing Business
The Big Picture: Choosing a Business Form and Other Investments
Forms Of Doing Business
Tax in the News: Should You Check That Box?
Nontax Factors Affecting The Choice Of Business Form
Limited Liability
Tax Fact: Revenue Relevance of Corporate versus Individual Taxpayers
Other Factors
Capital Formation
Tax in the News: Professional Service Firms and Organizational Form
The Conduit And Entity Perspectives Of Legal Business Forms
Global Tax Issues: Do Corporations Pay Taxes?
Effect On The Taxation Of Business Operations
Tax in the News: Who Pays Corporate AMT?
Tax Planning Strategies: Planning for the AMT
Effect On The Ability To Specially Allocate Income Among Owners
Tax Fact: Profitability of Partnerships
Effect On The Tax Treatment Of Capital Contributions
Bridge Discipline: Bridge to Business Law and Financial Accounting
Effect On The Basis Of An Ownership Interest
Effect On The Application Of The At-risk And Passive Activity Loss Rules
Effect On The Tax Treatment Of Distributions
State Taxation
Minimizing Double Taxation
Making Deductible Distributions
Tax in the News: Changing the Tax Treatment of Debt
Deferring Distributions
Return-of-Capital Distributions
S Corporation Status
Tax Fact: Income Tax Returns Filed by Business Entities
Bridge Discipline: Bridge to Economics
Disposition Of A Business Or An Ownership Interest
Sole Proprietorships
Partnerships And Limited Liability Companies
C Corporations
S Corporations
Tax Planning Strategies: Selling Stock or Assets
Concept Summary: Tax Treatment of Disposition of a Business
Conversion To Other Entity Types
Sole Proprietorship
C Corporation
Partnership
Overall Comparison Of Business Forms
Concept Summary: Tax Attributes of Different Forms of Doing Business (Assume That Partners and Share
Refocus on the Big Picture: Choosing A Business Form and Other Investments
Appendixes
Tax Rate Schedules and Tables
Tax Forms
Glossary
Table of Code Sections Cited
Table of Regulations Cited
Table of Revenue Procedures and Revenue Rulings Cited
Table of Cases Cited
Present Value and Future Value Tables
Tax Formulas
Index
