Description
South-Western Federal Taxation 2018: Corporations, Partnerships, Estates and Trusts Edition 41 by William H. Hoffman EBOOK PDF Instant Download
Table of Contents
Title Page
Copyright Page
Preface
The South-Western Federal Taxation Series
Brief Contents
Contents
Part 1: Introduction
Chapter 1: Understanding and Working with the Federal Tax Law
The Big Picture: Importance of Tax Research
THE WHYS OF THE TAX LAW
Revenue Needs
Economic Considerations
Social Considerations
Equity Considerations
Political Considerations
Influence of the Internal Revenue Service
Influence of the Courts
SUMMARY
RECONCILING ACCOUNTING CONCEPTS
WORKING WITH THE TAX LAW—TAX SOURCES
Statutory Sources of the Tax Law
Administrative Sources of the Tax Law
Judicial Sources of the Tax Law
Concept Summary: Federal Judicial System
Concept Summary: Judicial Sources
Other Sources of the Tax Law
WORKING WITH THE TAX LAW—LOCATING AND USING TAX SOURCES
Commercial Tax Services
Financial Disclosure Insights: Where Does GAAP Come From?
Using Electronic (Online) Tax Services
Noncommercial Electronic (Online) Tax Sources
WORKING WITH THE TAX LAW—TAX RESEARCH
Identifying the Problem
Locating the Appropriate Tax Law Sources
Assessing the Validity of Tax Law Sources
Ethics & Equity: Choosing Cases for Appeal
Arriving at the Solution or at Alternative Solutions
Communicating Tax Research
WORKING WITH THE TAX LAW—TAX PLANNING
Nontax Considerations
Components of Tax Planning
Follow-Up Procedures
Tax Planning—A Practical Application
TAXATION ON THE CPA EXAMINATION
Preparation Blueprints
Regulation Section
Part 2: Corporations
Chapter 2: Corporations: Introduction and Operating Rules
The Big Picture: A Half-Baked Idea?
TAX TREATMENT OF VARIOUS BUSINESS FORMS
Sole Proprietorships
Partnerships
Corporations
Concept Summary: Tax Treatment of Business Forms Compared
Global Tax Issues: U.S. Corporate Taxes and International Business Competitiveness
Limited Liability Companies
AN INTRODUCTION TO THE INCOME TAXATION OF CORPORATIONS
An Overview of Corporate versus Individual Income Tax Treatment
Specific Provisions Compared
Accounting Periods and Methods
Capital Gains and Losses
Recapture of Depreciation
Passive Activity Losses
Charitable Contributions
Domestic Production Activities Deduction
Net Operating Losses
Deductions Available Only to Corporations
Ethics & Equity: Pushing the Envelope on Year-End Planning
Concept Summary: Income Taxation of Individuals and Corporations Compared
DETERMINING THE CORPORATE INCOME TAX LIABILITY
Corporate Income Tax Rates
Alternative Minimum Tax
Concept Summary: Special Rules Applicable to Personal Service Corporations (PSCs)
Tax Liability of Related Corporations
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
Schedule M–3—Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million
Effect of Taxes on the Financial Statements
Form 1120 Illustrated
Consolidated Returns
TAX PLANNING
Corporate versus Noncorporate Forms of Business Organization
Operating the Corporation
Refocus on the Big Picture: Cooked to Perfection
Chapter 3: Corporations: Special Situations
The Big Picture: Dealing with the DPAD and the AMT
DOMESTIC PRODUCTION ACTIVITIES DEDUCTION
Components of the Deduction
Ethics & Equity: A Proper Allocation for W–2 Wages Purposes?
Domestic Production Gross Receipts
Adjustments in Arriving at QPAI
Collateral Problems
Form 8903 Illustrated
ALTERNATIVE MINIMUM TAX
Small Corporation Exemption
An Overview of Corporate Adjustments and Preferences
AMT Adjustments
Concept Summary: An Overview of Corporate AMT Adjustments and Preferences
AMT Preferences
Computing Alternative Minimum Taxable Income
Adjusted Current Earnings (ACE)
Concept Summary: How Various Transactions Affect ACE and E & P
Financial Disclosure Insights: The Alternative Minimum Tax as Prepayment
Exemption
Form 4626 Illustrated
Minimum Tax Credit and Form 8827 Illustrated
Ethics & Equity: The Minimum Tax Credit One-Way Street
Other Aspects of the AMT
PENALTY TAXES ON CORPORATE ACCUMULATIONS
Accumulated Earnings Tax (§§ 531–537)
Personal Holding Company Tax (§§ 541–547)
TAX PLANNING
Domestic Production Activities Deduction
Alternative Minimum Tax
Selected MACRS Cost Recovery Tables
Refocus on the Big Picture: Dealing with the DPAD and the AMT
Chapter 4: Corporations: Organization and Capital Structure
The Big Picture: The Vehicle for Business Growth Is the Corporate Form
ORGANIZATION OF AND TRANSFERS TO CONTROLLED CORPORATIONS
Section 351 Rationale and General Rules
Global Tax Issues: Choice of Organizational Form When Operating Overseas
Concept Summary: Shareholder Consequences: Taxable Corporate Formation versus Tax-Deferred § 351 Tr
Property Defined
Stock Transferred
Control of the Corporation
Assumption of Liabilities—§ 357
Basis Determination and Related Issues
Concept Summary: Tax Consequences of Liability Assumption
Concept Summary: Tax Consequences to the Shareholders and Corporation: With and Without the Applicat
Global Tax Issues: Does § 351 Cover the Incorporation of a Foreign Business?
CAPITAL STRUCTURE OF A CORPORATION
Capital Contributions
Debt in the Capital Structure
INVESTOR LOSSES
Stock and Security Losses
Ethics & Equity: Can a Loss Produce a Double Benefit?
Business versus Nonbusiness Bad Debts
Section 1244 Stock
GAIN FROM QUALIFIED SMALL BUSINESS STOCK
TAX PLANNING
Working with § 351
Selecting Assets to Transfer
Debt in the Capital Structure
Investor Losses
Refocus on the Big Picture: The Vehicle for Business Growth Is the Corporate Form
Chapter 5: Corporations: Earnings & Profits and Dividend Distributions
The Big Picture: Taxing Corporate Distributions
CORPORATE DISTRIBUTIONS—OVERVIEW
EARNINGS AND PROFITS (E & P)—§ 312
Computation of E & P
Summary of E & P Adjustments
Concept Summary: E & P Adjustments
Current versus Accumulated E & P
Allocating E & P to Distributions
Concept Summary: Allocating E & P to Distributions
Ethics & Equity: Shifting E & P
DIVIDENDS
Rationale for Reduced Tax Rates on Dividends
Global Tax Issues: Corporate Integration
Qualified Dividends
Property Dividends
Concept Summary: Noncash Property Distributions
Constructive Dividends
Stock Dividends and Stock Rights
TAX PLANNING
Corporate Distributions
Planning for Qualified Dividends
Constructive Dividends
Refocus on the Big Picture: Taxing Corporate Distributions
Chapter 6: Corporations: Redemptions and Liquidations
The Big Picture: Family Corporations and Stock Redemptions
STOCK REDEMPTIONS—IN GENERAL
STOCK REDEMPTIONS—SALE OR EXCHANGE TREATMENT
Global Tax Issues: Foreign Shareholders Prefer Sale or Exchange Treatment in Stock Redemptions
Concept Summary: Tax Consequences of Stock Redemptions to Shareholders
Historical Background and Overview
Stock Attribution Rules
Not Essentially Equivalent Redemptions
Disproportionate Redemptions
Complete Termination Redemptions
Partial Liquidations
Redemptions to Pay Death Taxes
Concept Summary: Summary of the Qualifying Stock Redemption Rules
STOCK REDEMPTIONS—EFFECT ON THE CORPORATION
Recognition of Gain or Loss
Effect on Earnings and Profits
Redemption Expenditures
STOCK REDEMPTIONS—PREFERRED STOCK BAILOUTS
Background
Tax Consequences
Section 306 Stock
LIQUIDATIONS—IN GENERAL
The Liquidation Process
Liquidating and Nonliquidating Distributions Compared
LIQUIDATIONS—EFFECT ON THE DISTRIBUTING CORPORATION
The General Rule
Antistuffing Rules
Concept Summary: Summary of Antistuffing Loss Disallowance Rules
LIQUIDATIONS—EFFECT ON THE SHAREHOLDER
Ethics & Equity: Transferee Liability for Tax Deficiency of Liquidated Corporation
LIQUIDATIONS—PARENT-SUBSIDIARY SITUATIONS
Minority Shareholder Interests
Global Tax Issues: Basis Rules for Liquidations of Foreign Subsidiaries
Indebtedness of the Subsidiary to the Parent
Basis of Property Received by the Parent Corporation— The General Rule
Basis of Property Received by the Parent Corporation— § 338 Election
Concept Summary: Summary of Liquidation Rules
TAX PLANNING
Stock Redemptions
Disposing of § 306 Stock
Corporate Liquidations
Parent-Subsidiary Liquidations
Asset Purchase versus Stock Purchase
Refocus on the Big Picture: A Family Attribution Waiver Is a Valuable Tool in Succession Planning
Chapter 7: Corporations: Reorganizations
The Big Picture: Structuring Acquisitions
REORGANIZATIONS—IN GENERAL
Summary of the Different Types of Reorganizations
Summary of Tax Consequences in a Tax-Free Reorganization
Concept Summary: Gain and Basis Rules for Nontaxable Exchanges
Concept Summary: Basis to Acquiring Corporation of Property Received
TYPES OF TAX-FREE REORGANIZATIONS
Type A
Type B
Type C
Type D
Type E
Concept Summary: Summary of Type A Through Type D Reorganizations: Advantages and Disadvantages
Type F
Type G
JUDICIAL DOCTRINES
Sound Business Purpose
Continuity of Interest
Continuity of Business Enterprise
Global Tax Issues: Acquisition Prescription to Lower Taxes Has Expired
Step Transaction
Ethics & Equity: Voicing Ethical Values
TAX ATTRIBUTE CARRYOVERS
Financial Disclosure Insights: When an Acquisition Fails
Assumption of Liabilities
Allowance of Carryovers
Net Operating Loss Carryovers
Earnings and Profits
Concept Summary: Treatment of E & P Carried to Successor
Other Carryovers
TAX PLANNING
Assessing the Possible Benefits of Restructuring Options
Concept Summary: Summary of Carryover Rules
Concept Summary: Comprehensive Summary of Corporate Reorganizations
Refocus on the Big Picture: Structuring Acquisitions
Chapter 8: Consolidated Tax Returns
The Big Picture: A Corporation Contemplates a Merger
THE CONSOLIDATED RETURN RULES
Motivations to Consolidate
Source and Philosophy of Consolidated Return Rules
Ethics & Equity: Delegating Authority to the Nonelected
ASSESSING CONSOLIDATED RETURN STATUS
Financial Disclosure Insights: GAAP and Tax Treatment of Consolidations
ELECTING CONSOLIDATED RETURN STATUS
Concept Summary: The Consolidated Return Election
Affiliated Group
Affiliated versus Controlled Group
Eligibility for the Consolidation Election
Compliance Requirements
Concept Summary: The Consolidated Tax Return
STOCK BASIS OF SUBSIDIARY
COMPUTING CONSOLIDATED TAXABLE INCOME
Computational Procedure
Typical Intercompany Transactions
Global Tax Issues: Consolidated Returns and NOLs
Computation of Group Items
The Matching Rule
Financial Disclosure Insights: The Consolidated Group’s Deferred Tax Asset Accounts
Concept Summary: The Consolidated Taxable Income
TAX PLANNING
Choosing Consolidated Return Partners
Consolidation versus 100 Percent Dividends Received Deduction
Protecting the Group Members’ Liability for Tax Payments
Documentation Requirements
Refocus on the Big Picture: Should the Affiliated Group File a Consolidated Return?
Chapter 9: Taxation of International Transactions
The Big Picture: Going International
OVERVIEW OF INTERNATIONAL TAXATION
Global Tax Issues: Tax Reform Can Make Strange Bedfellows
TAX TREATIES
SOURCING OF INCOME AND DEDUCTIONS
U.S.-Source Income
Foreign-Source Income
Allocation and Apportionment of Deductions
Concept Summary: The Sourcing Rules
Transfer Pricing
Ethics & Equity: The Costs of Good Tax Planning
FOREIGN CURRENCY TRANSACTIONS
Tax Issues
Concept Summary: Recognition of Foreign Exchange Gain or Loss
Functional Currency
Branch Operations
Distributions from Foreign Corporations
Foreign Taxes
U.S. PERSONS WITH OFFSHORE INCOME
Export Property
Cross-Border Asset Transfers
Tax Havens
Global Tax Issues: Boom in Cross-Border Mergers but No Inversions
Offshore (Foreign) Corporations Controlled by U.S. Persons
Ethics & Equity: Exporting U.S. Jobs or Improving U.S. Competitiveness?
Concept Summary: Subpart F Income and a CFC
Concept Summary: Income of a CFC That Is Included in Gross Income of a U.S. Shareholder
Foreign Tax Credit
Financial Disclosure Insights: Overseas Operations and Book-Tax Differences
Concept Summary: The Foreign Tax Credit
Ethics & Equity: When Is Cash Repatriated?
U.S. TAXATION OF NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
Nonresident Alien Individuals
Foreign Corporations
Foreign Investment in Real Property Tax Act
Expatriation to Avoid U.S. Taxation
REPORTING REQUIREMENTS
TAX PLANNING
The Foreign Tax Credit Limitation and Sourcing Provisions
The Foreign Corporation as a Tax Shelter
Planning under Subpart F
Using the Check-the-Box Regulations
Transferring Intangible Assets Offshore
Transfer Pricing
Refocus on the Big Picture: Going International
Part 3: Flow-Through Entities
Chapter 10: Partnerships: Formation, Operation, and Basis
The Big Picture: Why Use a Partnership, Anyway?
OVERVIEW OF PARTNERSHIP TAXATION
What Is a Partnership?
Concept Summary: Comparison of Partnership Types
Key Concepts in Taxation of Partnership Income
FORMATION OF A PARTNERSHIP: TAX EFFECTS
Contributions to the Partnership
Exceptions to the General Rule of § 721
Other Issues Related to Contributed Property
Concept Summary: Partnership Formation and Initial Basis Computation
Tax Accounting Elections
Initial Costs of a Partnership
Method of Accounting
Taxable Year of the Partnership
OPERATIONS OF THE PARTNERSHIP
Measuring and Reporting Partnership Income
Global Tax Issues: Withholding Requirements for non-U.S. Partners
Partner Allocations and Reporting
Concept Summary: Tax Reporting of Partnership Items
Ethics & Equity: Built-In Appreciation on Contributed Property
Partner’s Basis
Partner’s Capital Account
Loss Limitations
OTHER ISSUES
Self-Employment and Net Investment Income Tax
Transactions between a Partner and a Partnership
TAX PLANNING
Choosing Partnership Taxation
Concept Summary: Major Advantages and Disadvantages of the Partnership Form
Formation and Operation of a Partnership
Basis Considerations and Loss Deduction Limitations
Partnership Reporting Requirements
Transactions between Partners and Partnerships
Drafting the Partnership Agreement
Refocus on the Big Picture: Why Use a Partnership, Anyway?
Chapter 11: Partnerships: Distributions, Transfer of Interests, and Terminations
The Big Picture: The Life Cycle of a Partnership
DISTRIBUTIONS FROM A PARTNERSHIP
Distributions in General
Proportionate Current Distributions
Ethics & Equity: Arranging Tax-Advantaged Distributions
Proportionate Liquidating Distributions
Concept Summary: Proportionate Current Distributions (General Rules)
Property Distributions with Special Tax Treatment
Concept Summary: Proportionate Liquidating Distributions When the Partnership Also Liquidates (Gener
Disproportionate Distributions
SECTION 736—LIQUIDATING DISTRIBUTIONS TO RETIRING OR DECEASED PARTNERS
Treatment of Property/Income Payments
Property Payments
Income Payments
Concept Summary: Liquidating Distributions of Cash When the Partnership Continues
SALE OF A PARTNERSHIP INTEREST
General Rules
Effect of Hot Assets
Concept Summary: Sale of a Partnership Interest
OTHER DISPOSITIONS OF PARTNERSHIP INTERESTS
Transfers to a Corporation
Like-Kind Exchanges
Death of a Partner
Gifts
SECTION 754—OPTIONAL ADJUSTMENTS TO PROPERTY BASIS
Adjustment: Sale or Exchange of an Interest
Adjustment: Partnership Distributions
Concept Summary: Basis Adjustments under § 754
TERMINATION OF A PARTNERSHIP
OTHER ISSUES
Family Partnerships
Global Tax Issues: A Partnership Isn’t Always a Partnership—Complications in the Global Arena
Limited Liability Companies
Limited Liability Partnerships
Anti-Abuse Regulations
Administrative Matters
TAX PLANNING
Planning Partnership Distributions
Sales and Exchanges of Partnership Interests
Comparing Sales to Liquidations
Other Partnership Issues
Refocus on the Big Picture: The Life Cycle of a Partnership
Chapter 12: S Corporations
The Big Picture: Deductibility of Losses and the Choice of Business Entity
CHOICE OF BUSINESS ENTITY
Concept Summary: Making an S Election
An Overview of S Corporations
QUALIFYING FOR S CORPORATION STATUS
Definition of a Small Business Corporation
Making the Election
Shareholder Consent
Loss of the Election
OPERATIONAL RULES
Computation of Taxable Income
Allocation of Income and Loss
Tax Treatment of Distributions to Shareholders
Concept Summary: Classification Procedures for Distributions from an S Corporation
Tax Treatment of Noncash Property Distributions by the Corporation
Concept Summary: Consequences of Noncash Distributions
Shareholder’s Basis in S Stock
Treatment of Losses
Tax on Pre-Election Built-In Gain
Passive Investment Income Penalty Tax
Other Operational Rules
TAX PLANNING
When the Election Is Advisable
Making a Proper Election
Preserving the Election
Planning for the Operation of the Corporation
Refocus on the Big Picture: Using a Flow-Through Entity to Achieve Deductibility of Losses
Part 4: Advanced Tax Practice Considerations
Chapter 13: Comparative Forms of Doing Business
The Big Picture: Selection of a Tax Entity Form
FORMS OF DOING BUSINESS
NONTAX FACTORS
Capital Formation
Limited Liability
Other Factors
SINGLE VERSUS DOUBLE TAXATION
Overall Effect on Entity and Owners
Alternative Minimum Tax
Global Tax Issues: Tax Rates and Economic Activity
State Taxation
CONTROLLING THE ENTITY TAX
Favorable Treatment of Certain Fringe Benefits
Minimizing Double Taxation
CONDUIT VERSUS ENTITY TREATMENT
Effect on Recognition at Time of Contribution to the Entity
Effect on Basis of Ownership Interest
Ethics & Equity: Income Tax Basis That Does Not Change?
Effect on Results of Operations
Effect on Recognition at Time of Distribution
Effect on Passive Activity Losses
Effect of At-Risk Rules
Effect of Special Allocations
FICA, SELF-EMPLOYMENT TAXES, AND NIIT
FICA
Self-Employment Tax
Net Investment Income Tax (NIIT)
Effect on the Entity and Its Owners
DISPOSITION OF A BUSINESS OR AN OWNERSHIP INTEREST
Sole Proprietorship
Partnership and Limited Liability Company
C Corporation
S Corporation
CONVERTING TO OTHER ENTITY TYPES
Sole Proprietorship
C Corporation
Partnership or LLC
OVERALL COMPARISON OF FORMS OF DOING BUSINESS
Concept Summary: Tax Attributes of Different Forms of Business (Assume That Partners and Shareholder
TAX PLANNING
Refocus on the Big Picture: Selection of a Tax Entity Form
Chapter 14: Taxes on the Financial Statements
The Big Picture: Taxes on the Financial Statements
BOOK-TAX DIFFERENCES
Different Reporting Entities
Different Taxes
Different Methods
Tax Return Disclosures
Financial Disclosure Insights: Supersized Goodwill
Concept Summary: Income AmountsBook versus Tax
INCOME TAXES IN THE FINANCIAL STATEMENTS
GAAP Principles
Global Tax Issues: Accounting for Income Taxes in International Standards
Financial Disclosure Insights: The Book-Tax Income Gap
Valuation Allowance
Global Tax Issues: Tax Losses and the Deferred Tax Asset
Tax Disclosures in the Financial Statements
Concept Summary: Steps in Determining the Book Tax Expense
Special Issues
Financial Disclosure Insights: Corporate Tax Rate Cuts: Be Careful What You Wish For
Concept Summary: Disclosures Under ASC 740-10 (FIN 48)
Summary
Global Tax Issues: Cash Stashed Overseas
Ethics & Equity: Disclosing Aggressive Tax Positions
BENCHMARKING
Refining the Analysis
Sustaining the Tax Rate
Uses of Benchmarking Analysis
Concept Summary: Benchmarking Analysis
TAX PLANNING
Releasing Valuation Allowances
Reducing Effective Tax Rates with ASC 740-30 (APB 23)
Comparing Tax Savings
Refocus on the Big Picture: Taxes on the Financial Statements
Chapter 15: Exempt Entities
The Big Picture: Effect of a For-Profit Business on a Tax-Exempt Entity
TYPES OF EXEMPT ORGANIZATIONS
REQUIREMENTS FOR EXEMPT STATUS
Serving the Common Good
Not-for-Profit Entity
Net Earnings and Members of the Organization
Political Influence
Concept Summary: Political Activities of Exempt Entities
TAXES ON EXEMPT ENTITIES
Prohibited Transactions
Ethics & Equity: For the Good of the People
Feeder Organizations
Concept Summary: Consequences of Exempt Status
PRIVATE FOUNDATIONS
Tax Consequences of Private Foundation Status
Concept Summary: Exempt Organizations: Classification
Taxes Imposed on Private Foundations
UNRELATED BUSINESS INCOME TAX
Unrelated Trade or Business
Unrelated Business Taxable Income
Concept Summary: Unrelated Business Income Tax
REPORTING REQUIREMENTS
Obtaining Exempt Organization Status
Annual Filing Requirements
Disclosure Requirements
TAX PLANNING
General Considerations
Maintaining Exempt Status
Private Foundation Status
Unrelated Business Income Tax
Refocus on the Big Picture: Effect of a For-Profit Business on a Tax-Exempt Entity
Chapter 16: Multistate Corporate Taxation
The Big Picture: Making a Multistate Location Decision
OVERVIEW OF CORPORATE STATE INCOME TAXATION
Computing State Income Tax
State Modifications
The UDITPA and the Multistate Tax Commission
Jurisdiction to Impose Tax: Nexus and Public Law 86–272
Nexus beyond P.L. 86–272
Concept Summary: Multistate Taxation
ALLOCATION AND APPORTIONMENT OF INCOME
The Apportionment Procedure
Apportionable Income
Apportionment Factors: Elements and Planning
Concept Summary: Apportionable Income
The Sales Factor
The Payroll Factor
The Property Factor
Financial Disclosure Insights: State/Local Taxes and the Tax Expense
THE UNITARY THEORY
What Is a Unitary Business?
Tax Effects of the Unitary Theory
Global Tax Issues: Water’s Edge Is Not a Day at the Beach
Concept Summary: Using Apportionment Formulas
Consolidated and Combined Returns
TAXATION OF S CORPORATIONS
Eligibility
State Tax Filing Requirements
TAXATION OF PARTNERSHIPS AND LLCS
OTHER STATE AND LOCAL TAXES
State and Local Sales and Use Taxes
Local Property Taxes
Other Taxes
Ethics & Equity: Encouraging Economic Development through Tax Concessions
TAX PLANNING
Selecting the Optimal State in Which to Operate
Restructuring Corporate Entities
Subjecting the Corporation’s Income to Apportionment
Ethics & Equity: Can You Be a Nowhere Adviser?
Planning with Apportionment Factors
Sales/Use Tax Compliance
Sales/Use Taxes on Capital Changes
Capital Stock Taxation
Refocus on the Big Picture: Making a Multistate Location Decision
Chapter 17: Tax Practice and Ethics
The Big Picture: A Tax Adviser’s Dilemma
TAX ADMINISTRATION
Organizational Structure of the IRS
IRS Procedure—Letter Rulings
IRS Procedure—Other Issuances
Ethics & Equity: Tax Compliance Costs
Administrative Powers of the IRS
The Audit Process
Ethics & Equity: Can the IRS Pretend to Be Your Friend?
The Taxpayer Appeal Process
Offers in Compromise and Closing Agreements
Ethics & Equity: Our Taxing System of Self-Assessment
Interest
Concept Summary: Working with the IRS
Taxpayer Penalties
Ethics & Equity: First-Time Tax Violators Can Get Off with Just a Warning
Statute of Limitations
THE TAX PROFESSION AND TAX ETHICS
The Tax Professional
Regulating Tax Preparers
Ethics & Equity: Who Cheats and Why?
IRS Rules Governing Tax Practice
Preparer Penalties
Privileged Communications
AICPA Statements on Standards for Tax Services
Concept Summary: Tax Profession and Ethics
TAX PLANNING
Strategies in Seeking an Administrative Ruling
Considerations in Handling an IRS Audit
Statute of Limitations
Litigation Considerations
Penalties
Privileged Communications
Refocus on the Big Picture: A Tax Adviser’s Dilemma
Part 5: Family Tax Planning
Chapter 18: The Federal Gift and Estate Taxes
The Big Picture: An Eventful and Final Year
TRANSFER TAXES—IN GENERAL
Nature of the Taxes
Global Tax Issues: U.S. Transfer Taxes and NRAs
Concept Summary: Formula for the Federal Gift Tax
Concept Summary: Formula for the Federal Estate Tax
Valuation for Federal Transfer Tax Purposes
Key Property Concepts
THE FEDERAL GIFT TAX
General Considerations
Ethics & Equity: It’s the Thought That Counts
Transfers Subject to the Gift Tax
Annual Exclusion
Deductions
Computing the Federal Gift Tax
Procedural Matters
Concept Summary: Federal Gift Tax Provisions
THE FEDERAL ESTATE TAX
Gross Estate
Concept Summary: Federal Estate Tax Provisions—Gross Estate
Taxable Estate
Estate Tax Credits
Global Tax Issues: Treaty Relief Is Not Abundant!
Procedural Matters
Concept Summary: Federal Estate Tax Provisions—Taxable Estate and Procedural Matters
THE GENERATION-SKIPPING TRANSFER TAX
The Problem
The Solution
TAX PLANNING
Refocus on the Big Picture: An Eventful and Final Year
Chapter 19: Family Tax Planning
The Big Picture: Lifetime Giving—the Good and the Bad
VALUATION CONCEPTS
Valuation in General
Valuation of Specific Assets
Ethics & Equity: One Way to Handle Loans to Troublesome In-Laws
Ethics & Equity: Can IRS Valuation Tables Be Disregarded?
Real Estate and the Special Use Valuation Method
Valuation Problems with a Closely Held Business
Concept Summary: Valuation Concepts
INCOME TAX CONCEPTS
Basis of Property Acquired by Gift
Basis of Property Acquired by Death
Concept Summary: Income Tax Concepts
GIFT PLANNING
Minimizing Gift Taxes
Minimizing Estate Taxes
Income Tax Considerations
ESTATE PLANNING
Probate Costs
Proper Handling of Estate Tax Deductions
Providing Estate Liquidity
Concept Summary: Estate and Gift Tax Planning
Refocus on the Big Picture: Lifetime Giving—The Good and the Bad
Chapter 20: Income Taxation of Trusts and Estates
The Big Picture: Setting Up a Trust to Protect a Family
AN OVERVIEW OF FIDUCIARY TAXATION
What Is a Trust?
What Is an Estate?
NATURE OF TRUST AND ESTATE TAXATION
Concept Summary: Tax Characteristics of Major Pass-Through Entities
Tax Accounting Periods and Methods
Tax Rates and Personal Exemption
Alternative Minimum Tax
Additional Tax on Net Investment Income
TAXABLE INCOME OF TRUSTS AND ESTATES
Entity Accounting Income
Gross Income
Ethics & Equity: To Whom Can I Trust My Pet?
Ordinary Deductions
Deductions for Losses
Charitable Contributions
Deduction for Distributions to Beneficiaries
Concept Summary: Uses of the DNI Amount
Tax Credits
Concept Summary: Principles of Fiduciary Income Taxation
TAXATION OF BENEFICIARIES
Distributions by Simple Trusts
Distributions by Estates and Complex Trusts
Character of Income
GRANTOR TRUSTS
Reversionary Trusts
Powers Retained by the Grantor
PROCEDURAL MATTERS
TAX PLANNING
A Trust or an Estate as an Income-Shifting Device
Income Tax Planning for Estates
Income Tax Planning with Trusts
Distributions of In-Kind Property
Ethics & Equity: Who Should Be a Trustee?
Deductibility of Fiduciary Expenses
Duties of an Executor
Additional Taxes on Capital Gains and Net Investment Income
Refocus on the Big Picture: Setting Up a Trust to Protect a Family
Appendix A: Tax Rate Schedules and Tables
Appendix B: Tax Forms
Appendix C: Glossary
Appendix D-1: Table of Code Sections Cited
Appendix D-2: Table of Regulations Cited
Appendix D-3: Table of Revenue Procedures and Revenue Rulings Cited
Appendix E: Table of Cases Cited
Appendix F: Present Value and Future Value Tables
Appendix G: Tax Formulas
Index
