Federal Taxation Essay

D. Dale bowleg is prof Emeritus in the School of Accounting at the University of Central Florida. He received a B.S. from the University of Tulsa, an M.B.A. from the University of Arkansas, and a Ph.D. from the University of Texas at Austin. He helped to establish the operate of Science in evaluateation syllabuss at the University of Central Florida and California province University, Fullerton, where he previously taught. In 1985, he was adopted by the California cab art of Certified Public Accountants as the Accounting pedagog of the year. prof Bandy has published 8 defends and to a greater extent than 30 articles in accounting system and taskation. His articles hire advanceed in the ledger of revenue enhancementation, the ledger of Accountancy, Advances in revenue enhancementation, the assess Adviser, The CPA daybook, precaution Accounting, and a number of other journals. N. Allen Ford is the Larry D. Homer/KPMG Peat Marwick Distinguished teaching method pr of of Professional Accounting at the University of Kansas.He received an undergrad degree from Centenary College in Shreveport, Louisiana, and both the M.B.A. and Ph.D. in Business from the University of Arkansas. He has published everyplace 40 articles think to revenue enhancementation, financial accounting, and accounting reading in journals such as The Accounting Review, The diary of the Ameri washbasin Taxation familiarity, and The Journal of Taxation. He served as president of the American Taxation connection in 197980. Professor Ford has received numerous teaching awards at the college and university levels.In 1993, he received the Byron T. Shutz Award for Distinguished Teaching in Economics and Business. In 1996 he received the Ray M. Sommerfeld swell Tax Educator Award, which is jointly sponsored by the American Taxation Association and Ernst & green and in 1998 he received the Kansas Society of CPAs Outstanding Education Award. Robert L. Gardner is the Robert J. smith Professor of Accounting in the School of Accountancy at Brigham preadolescent University (BYU). He received a B.S. and M.B.A. from the University of Utah and a Ph.D. from the University of Texas at Austin. He has authored or coauthored two books and everywhere 25 articles in journals such as The Tax Advisor, Journal of Corporate Taxation, Journal of Real Estate Taxation, Journal of Accounting Education, Journal of Taxation of S Corporations, and the International Tax Journal.Professor Gardner has received several teaching awards. In 2001, he received the Outstanding Faculty Award in the Marriott School of Management at BYU. He has served on the Board of Trustees of the American Taxation Association and served as chairman of the ATA in 19992000. Richard J. Joseph is the Provost of Hult International Business School in Cambridge, Massachusetts. He is a current ph eitherus of the Hult Accounting Faculty and a former member of the measure strength of The University of Texas at Austin.A graduate magna cum laude of Harvard College (B.A.), Oxford University (M.Litt.), and The University of Texas at Austin School of Law (J.D.), he has taught individual, corporate, international, state and local appraiseation, tax research methods, and the fundamentals of financial and managerial accounting. Before embarking on his donnish career, Provost Joseph worked as an investment banker and securities trader on Wall Street and as a mergers and acquisitions lawyer in Texas. He is co-editor of the Oxford Handbook on Mergers and Acquisitions and has write numerous commentaries in the fiscal Times, The Christian Science Monitor, Tax Notes, and Tax Notes International. His book, The Origins of the American Income Tax, explores the original intent, rationale, and effect of the early American income tax. LeAnn Luna is an Associate Professor of Accounting at the University of Tennessee. She is a C.P.A. and holds an undergraduate degree from Southern Methodist University, a M.T. from the University of Denver College of Law, and a Ph.D. from the University of Tennessee.She has taught introductory taxation, corporate and partnership taxation, tax research, and professional standards. Professor Luna to a fault holds a joint appointment with the core for Business and Economic Research at the University of Tennessee, where she interacts frequently with state policymakers on a variety of policy related issues. She has published articles in the subject area Tax Journal, The Journal of the American Taxation Association, Tax Adviser, produce Tax Notes, and a number of other journals. xiiAbout the Authors Individuals xiiitimothy J. Rupert is a Professor and the Golemme Administrative Chair in the College of Business brass at Northeastern University. He received his B.S. in Accounting and his prevail of Taxation from the University of Akron. He to a fault get his Ph.D. from Penn conjure University. Professor Ruperts research has been published in such journals as The Journal of the American Taxation Association, Behavioral Research in Accounting, Advances in Taxation, Applied cognitive Psychology, Advances in Accounting Education and Journal of Accounting Education.He is presently the co-editor of Advances in Accounting Education. In 2010, he received the Outstanding Educator Award from the Massachusetts Society of CPAs. He has to a fault received the Universitys Excellence in Teaching Award and the College of Business Administrations Best Teacher of the Year award multiple times. He is expeditious in the American Accounting Association and the American Taxation Association (ATA) and has served as the vice president and secretary of the ATA. Charlene Henderson is a member of the faculty in the Adkerson School of Accountancy at Mississippi State University.She earned her undergraduate and graduate degrees in accounting at Mississippi State University. After working in public and private accounting, she completed the doctorial program at Arizona State University. Her teaching and research interests admit both tax and financial accounting.Her research has appeared in several journals, including Journal of the American Taxation Association, Journal of Accounting Auditing and finance, and Journal of Business Finance and Accounting. Michael S. Schadewald, Ph.D., CPA, is on the faculty of the University of WisconsinMilwaukee where he teaches graduate and undergraduate persists in work taxation. A graduate of the University of Minnesota, Professor Schadewald is a co-author of several books on multistate and international taxation and has published more than 40 articles in faculty member and professional journals, including The Accounting Review, Journal of Accounting Research, Contemporary Accounting Research, The Journal of the American Taxation Association, CPA Journal, Journal of Taxation, and The Tax Adviser. Professor Schadewald also has served on the editorial boards of The Journal of the American Tax ation Association, Journal of State Taxation, International Tax Journal, The International Journal of Accounting, Issues in Accounting Education, and Journal of Accounting Education.PR E F A C EWhy is the pontiff/Anderson series the best prime(a) for you and your students? The Pope/Anderson 2013 serial publication in Federal Taxation is appropriate for use in each first course in federal taxation, and comes in a choice of three chromas Federal Taxation 2013 Individuals Federal Taxation 2013 Corporations, Partnerships, Estates & Trusts (the companion book to Individuals) Federal Taxation 2013 Comprehensive (includes 29 chapters 14 chapters from Individuals and 15 chapters from Corporations) ** For a customized edition of any of the chapters for these textual matterbooks, fit your Pearson representative and they can create a custom text for you. The Corporations, Partnerships, Estates & Trusts and Comprehensive batchs contain three complete tax return bothers whose data cha nge with each edition, thereby keeping the problems fresh. puzzle C3-66 contains the oecumenical corporate tax return, Problem C9-58 contains the comprehensive partnership tax return, and Problem C11-64 contains the comprehensive S crapper tax return, which is establish on the same facts as Problem C9-58 so that students can compare the returns for these two entities. The Corporations, Partnerships, Estates & Trusts and Comprehensive volumes contain sections called Financial Statement Implications, which discuss the implications of Accounting Standards Codification (ASC) 740. The main discussion of accounting for income taxes appears in Chapter C3. The financial statement implications of other transactions appear in Chapters C5, C7, C8, and C16 (Corporations volume altogether). We want to stress that all entities are coered in the Individuals volume although the treatment is often briefer than in the Corporations and Comprehensive volumes. The Individuals volume, therefore, is a ppropriate for colleges and universities that require only one semester of taxation as well as those that require more than one semester of taxation. Further, this volume adapts the suggestions of the Model Tax Curriculum as promulgated by the American Institute of Certified Public Accountants.Whats impertinent to this Edition?Individuals Complete integration of the mod laws contained in the Temporary paysheet Tax Cut Continuation Act of 2011. Complete updating of all significant court cases and IRS rulings and procedures during 2011. Discussion of the extension of many itemized deductions through 2011 or 2012. Discussion of all sunset provisions applicable after celestial latitude 31, 2011 and December 31, 2012. All tax rank schedules have been updated to reflect the rates and inflation ad exceptments for 2012. Thorough revision and update of all homework questions and problems. Whenever immature updates become open, they will be accessible via MyAccountingLab. Corpor ations The comprehensive corporate tax return, Problem C3-66, has all modernistic numbers for the 2011 forms. The comprehensive partnership tax return, Problem C9-58, has all new numbers for the 2011 forms. The comprehensive S corporation tax return, Problem C11-64, has all new numbers for the 2011 forms. Changes affecting 2012 tax law, including inflation ad honorablements, have been incorporated into the text where appropriate. All tax rate schedules have been updated to reflect the rates and inflation adjustments for 2012. Whenever new updates become available, they will be accessible via MyAccountingLab.Preface Individuals xvMyAccountingLab is web-based, tutorial and assessment software for accounting that non only progress tos students more I feel It moments, however gives instructors the flexibility to make technology an organic part of their course. It also is an excellent supplementary resource for students. To register, go to http//pearsonmylabandmastering.com.F or instructorsMyAccountingLab rears instructors with a rich and flexible set of course materials, along with course-management tools that make it sonant to deliver all or a portion of your course online. tidy Homework and Test Manager Create, import, and manage online homework and media assignments, quizzes, and tests. Create assignments from online questions today correlated to this and other textbooks. Homework questions include Help Me Solve This point solutions to help students understand and master concepts. You can choose from a broad(a) range of assignment options, including time limits,proctoring, and maximum number of attempts allowed. In addition, you can create your take questionsor copy and edit oursto customize your students acquisition path. Comprehensive Gradebook Tracking MyAccountingLabs online gradebook automatically tracks your students results on tests, homework, and tutorials and gives you control everywhere managing results and calculating grades.Al l MyAccountingLab grades can be exported to a spreadsheet program, such as Microsoft Excel. The MyAccountingLab Gradebook provides a number of student data views and gives you the flexibility to weight assignments, select which attempts to include when calculating scores, and omit or delete results for individual assignments. Department-Wide Solutions Get help managing multiple sections and working with Teaching Assistants using MyAccountingLab Coordinator courses. After your MyAccountingLab course is set up, it can be copied to create sections or member courses. Changes to the Coordinator Course flow down to all members, so changes only indispensability to be made once. We will add the most current tax randomness to MyAccountingLab as it becomes available.For StudentsMyAccountingLab provides students with a personalized interactive check offing environment, where they can learn at their own pace and measure their progress. Interactive Tutorial Exercises MyAccountingLabs homew ork and practice questions are correlated to the textbook, and similar to versions regenerate algorithmically to give students unlimited opportunity for practice and mastery.Questions offer helpful feedback when students enter ill-advised answers, and they include Help Me Solve This guided solutions as well as other learning back up for extra help when students need it. cartoon Plan for Self-Paced Learning MyAccountingLabs study plan helps students monitor their own progress, letting them see at a glance exactly which topics they need to practice. MyAccountingLab generates a personalized study plan for each student based on his or her test results, and the study plan links straight to interactive, tutorial exercises for topics the student hasnt yet mastered. Students can regenerate these exercises with new values for unlimited practice, and the exercises include guided solutions and multimedia learning aids to give students the extra help they need.View a guided spell of MyAcco untingLab at http//www.myaccountinglab.com/support/tours.xvi Individuals PrefaceStrong Pedagogical assist Appropriate blend of technical foul content of the tax law with a high level of readability for students. Focused on enabling students to keep tax principles within the chapter to real-life situations.What Would You Do in This patch? Unique to the Pope/Anderson series, these boxes place students in a decision-making role. The boxes include many current contr everywheresies that are as yet unresolved or are currently universe considered by the courts. These boxes make extensive use of Ethical Material as they represent choices that may put the practitioner at odds with the client. pulley & Think These speed bumps encourage students to pause and apply what they have just learned. Solutions for each issue are provided in the box. Ethical Point These comments provide the ethical implications of material discussed in the adjoining text. Apply what they have just learned. Tax d odge Tip These comments suggest tax planning ideas related to material in the adjoining text.Program ComponentsMaterials for the instructor may be accessed at the Instructors Resource Center (IRC) online, located at www.pearsonhighered.com/phtax or within the Instructor Resource section of MyAccountingLab. You may contact your Pearson representative for assistance with the registration process. TaxACT 2011 Software Available on CD to be packaged with Individuals and Comprehensive Texts This user-friendly tax eagerness program includes more than 80 tax forms, schedules, and worksheets. TaxACT calculates returns and alerts the user to possible errors or entries. Instructors Resource Manual Contains sample syllabi, instructor outlines, and information regarding problem areas for students. It also contains solutions to the tax form/tax return preparation problems. In addition to being available electronically on the IRC online, it also is available in hardcopy. Solutions Manual Conta ins solutions to discussion questions, problems, and comprehensive and tax strategy problems. It also contains all solutions to the case study problems, research problems, and What Would You Do in This Situation? boxes. In addition to being available electronically on the IRC online, it is also available in hardcopy. Test Item File Offers a riches of true/false, multiple-choice, and calculative problems. A computerized program is available to adopters. PowerPoint Slides Include everyplace 300 full-color electronic transparencies available for Individuals and Corporations.AcknowledgmentsAdopters will nonice that John L. Kramers name does not appear on the 2013 edition as he has officially retired from the textbook. Jack was one of the founders and original editors of the Prentice-Hall Federal Taxation series, and the current editors and authors wish to thank him for his outstanding contri andions everyplace the years to this textbook and to tax education in general. Our policy is to provide annual editions and to prepare well timed(p) updated supplements when major tax revisions occur. We are most appreciative of the suggestions made by outside reviewers because these extensive review procedures have been valuable to the authors and editors during the revision process. We also are grateful to the various graduate assistants, doctoral students, and colleagues who have reviewed the text and supplementary materials and checked solutions to maintain a high level of technical accuracy.In particular, we would like to acknowledge the following colleagues who assisted in the preparation of supplemental materials for this text Ann Burstein Cohen SUNY at Buffalo Caroline Strobel University of South Carolina Craig J. Langstraat University of Memphis Kate Demarest Carroll corporation College Richard Newmark University of Northern Colorado In addition, we want to thank Myron S. Scholes, Mark A. Wolfson, merle Erickson, Edward L. Maydew, and Terry Shevlin for allowi ng us to use the model discussed in their text, Taxes and Business Strategy A Planning Approach, as the basis for material in Chapter I18. Please send any comments to Kenneth E. Anderson or Thomas R. Pope.TAX station SCHEDULESINDIVIDUAL TAXPAYERSSingle 1(c) If ratable income is The tax is Not everyplace $8,700 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10% of taxable income. everywhere $8,700 however not over $35,350 . . . . . . . . . . . . . . . . . $870.00, gain 15% of the sur incontrovertible over $8,700. oer $35,350 but not over $85,650 . . . . . . . . . . . . . . . . $4,867.50, asset 25% of the additional over $35,350. everywhere $85,650 but not over $178,650 . . . . . . . . . . . . . . . $17,442.50, plus 28% of the excess over $85,650. Over $178,650 but not over $388,350 . . . . . . . . . . . . . . $43,482.50, plus 33% of the excess over $178,650. Over $388,350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $112,683.50, plus 35% of the excess over $388,350. Head of Household 1(b) If taxable income is The tax is Not over $12,400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10% of taxable income. Over $12,400 but not over $47,350 . . . . . . . . . . . . . . . . $1,240.00, plus 15% of the excess over $12,400. Over $47,350 but not over $122,300 . . . . . . . . . . . . . . . $6,482.50, plus 25% of the excess over $47,350. Over $122,300 but not over $198,050 . . . . . . . . . . . . . . $25,220.00, plus 28% of the excess over $122,300. Over $198,050 but not over $388,350 . . . . . . . . . . . . . . $46,430.00, plus 33% of the excess over $198,050. Over $388,350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $109,229.00, plus 35% of the excess over $388,350. Married, file Joint and Surviving Spouse 1(a) If taxable income is The tax is Not over $17,400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10% of taxable income. Over $17,400 but not over $70,700 . . . . . . . . . . . . . . . . $1,740.00, plus 15% of the excess over $17,400. Over $70,700 but not over $142,700 . . . . . . . . . . . . . . . $9,735.00, plus 25% of the excess over $70,700. Over $142,700 but not over $217,450 . . . . . . . . . . . . . .$27,735.00, plus 28% of the excess over $142,700. Over $217,450 but not over $388,350 . . . . . . . . . . . . . . $48,665.00, plus 33% of the excess over $217,450. Over $388,350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $105,062.00, plus 35% of the excess over $388,350. Married, Filing Separate 1(d) If taxable income is The tax is Not over $8,700 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10% of taxableincome. Over $8,700 but not over $35,350 . . . . . . . . . . . . . . . . . $870.00, plus 15% of the excess over $8,700. Over $35,350 but not over $71,350 . . . . . . . . . . . . . . . . $4,867.50, plus 25% of the excess over $35,350. Over $71,350 but not over $108,725 . . . . . . . . . . . . . . . $13,867.50, pl us 28% of the excess over $71,350. Over $108,725 but not over $194,175 . . . . . . . . . . . . . . $24,332.50, plus 33% of the excess over $108,725. Over $194,175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52,531.00, plus 35% of the excess over $194,175.