Book 9798214582238

704 sections

Front Matter
- Cover Pagei
- Title Pagei
- Copyright Pagei
- General Editorsi
- Contributing Authorsi
- ProConnect™ Taxi
- THOMSON REUTERS CHECKPOINT™ii
- Prefaceiv
- Acknowledgmentsxvi
- Special Thanksxvii
- The South-Western Federal Taxation Seriesxvii
- About the Editorsxix
Part 1. Introduction and Basic Tax Model1
- Chapter 1. An Introduction to Taxation and Understanding the Federal Tax Law1
  - 1-1. Approaching the Study of Taxation1-1
    - 1-1b. Taxation in Our Lives1-1
    - 1-1c. The Relevance of Taxation to Accounting and Finance Professionals1-2
    - 1-1d. How to Study Taxation1-3
  - 1-2. Understanding the Federal Tax Law1-4
    - 1-2a. Revenue Needs1-5
    - 1-2b. Economic Considerations1-5
    - 1-2c. Social Considerations1-6
    - 1-2d. Equity Considerations1-7
    - 1-2e. Political Influence1-9
    - 1-2f. Influence of the Internal Revenue Service1-10
    - 1-2g. Influence of the Courts1-11
    - 1-2h. Summary1-13
  - 1-3. A Brief History of U.S. Taxation1-13
    - 1-3b. Revenue Acts1-14
    - 1-3c. Trends1-14
  - 1-4. Tax System Design1-15
    - 1-4b. The Basic Tax Formula1-15
    - 1-4c. Tax Principles1-16
  - 1-5. Types of Taxes1-18
    - 1-5a. Property Taxes1-19
    - 1-5b. Transaction Taxes1-20
    - 1-5c. Wealth Transfer Taxes1-22
    - 1-5d. Income Taxes1-24
    - 1-5e. Employment Taxes1-26
    - 1-5f. Other Current Taxes1-28
    - 1-5g. Proposed U.S. Taxes1-29
  - 1-6. Tax Administration1-31
    - 1-6b. The Audit Process1-31
    - 1-6c. Statute of Limitations1-33
    - 1-6d. Interest and Penalties1-34
    - 1-6e. Tax Practice1-35
  - Key Terms1-38
  - Discussion Questions1-38
  - Research Problems1-43
  - Becker CPA Review Questions1-44
- Chapter 2. Working with the Tax Law1-45
  - 2-1. Tax Law Sources2-1
    - 2-1a. Statutory Sources of the Tax Law2-1
    - 2-1b. Administrative Sources of the Tax Law2-4
    - 2-1c. Judicial Sources of the Tax Law2-8
    - 2-1d. Other Sources of the Tax Law2-16
  - 2-2. Working with the Tax Law—Tax Research Tools2-17
    - 2-2a. Commercial Tax Services2-17
    - 2-2b. Using Commercial Tax Services2-18
    - 2-2c. Using Noncommercial Tax Services2-18
  - 2-3. Working with the Tax Law—Tax Research2-19
    - 2-3a. Identifying the Problem2-20
    - 2-3b. Refining the Problem2-21
    - 2-3c. Locating the Appropriate Tax Law Sources2-21
    - 2-3d. Assessing the Validity of Tax Law Sources2-21
    - 2-3e. Arriving at the Solution or at Alternative Solutions2-24
    - 2-3f. Communicating Tax Research2-25
    - 2-3g. Use of Generative AI for Tax Research2-27
  - 2-4. Working with the Tax Law—Tax Planning2-27
    - 2-4a. Nontax Considerations2-28
    - 2-4b. Components of Tax Planning2-28
    - 2-4c. Tax Avoidance and Tax Evasion2-29
    - 2-4d. Follow-Up Procedures2-30
    - 2-4e. Tax Planning2-30
  - 2-5. Taxation on the CPA Examination2-30
    - 2-5a. The Redesigned CPA Exam2-30
    - 2-5b. Taxation and Regulation Section (Core)2-31
    - 2-5c. Tax Compliance and Planning Section (Discipline)2-33
    - 2-5d. Preparation Blueprints2-33
    - 2-5e. Foundational Competencies Framework for Aspiring CPAs2-34
  - Key Terms2-34
  - Discussion Questions2-34
  - Problems2-38
  - Research Problems2-42
- Chapter 3. Tax Formula and Tax Determination2-43
  - 3-1. Tax Formula3-1
    - 3-1a. The Impact of the Tax Cuts and Jobs Act of 2017 (TCJA) and the One Big Beautiful Bill Act of 2025 (OBBBA)3-2
    - 3-1b. Components of the Tax Formula3-2
    - 3-1c. Tax Formula—Correlation with Form 10403-12
  - 3-2. Standard Deduction3-19
    - 3-2a. Basic and Additional Standard Deduction3-20
    - 3-2b. Individuals Not Eligible for the Standard Deduction3-21
    - 3-2c. Special Limitations on the Standard Deduction for Dependents3-21
  - 3-3. Exemptions3-22
  - 3-4. Dependents3-22
    - 3-4a. Qualifying Child3-22
    - 3-4b. Qualifying Relative3-24
    - 3-4c. Other Rules for Determining Dependents3-27
    - 3-4d. Comparison of Dependent Categories3-28
    - 3-4e. Child and Dependent Tax Credits3-29
  - 3-5. Filing Status and Filing Requirements3-31
    - 3-5a. Filing Status3-32
    - 3-5b. Filing Requirements3-36
  - 3-6. Tax Determination3-37
    - 3-6a. Tax Rates3-38
    - 3-6b. Computation of Net Taxes Payable or Refund Due3-39
    - 3-6c. Kiddie Tax—Unearned Income of Dependent Children3-40
  - 3-7. Tax Return Filing Procedures3-42
    - 3-7b. The E-File Approach3-43
    - 3-7c. When and Where to File3-43
    - 3-7d. Modes of Payment3-44
    - 3-7e. Amended Tax Returns3-44
  - 3-8. Tax Planning3-44
    - 3-8b. Dependents3-45
    - 3-8c. Taking Advantage of Tax Rate Differentials3-46
    - 3-8d. Income of Certain Children3-46
  - Key Terms3-47
  - Discussion Questions3-47
  - Computational Exercises3-50
  - Problems3-51
  - Tax Return Problems3-56
  - Research Problems3-59
  - Becker CPA Review Questions3-60
Part 2. Gross Income3-63
- Chapter 4. Gross Income: Concepts and Inclusions3-64
  - 4-1. Gross Income4-2
    - 4-1b. The Recovery of Capital Doctrine4-2
    - 4-1c. The Economic and Accounting Concepts of Income4-2
    - 4-1d. Financial Accounting Income versus Taxable Income4-3
    - 4-1e. Form of Receipt4-4
  - 4-2. The Timing of Income Recognition4-5
    - 4-2b. Accounting Methods4-6
    - 4-2c. Special Rules Applicable to Cash Basis Taxpayers4-8
    - 4-2d. Special Rules Applicable to Accrual Basis Taxpayers4-12
  - 4-3. General Sources of Gross Income and to Whom They Are Taxed4-13
    - 4-3a. Income from Personal Services4-13
    - 4-3b. Income from Property4-13
    - 4-3c. Income from Partnerships, S Corporations, Trusts, and Estates4-16
    - 4-3d. Income in Community Property States4-17
  - 4-4. Special Rules Related to Certain Items Included in Gross Income4-19
    - 4-4a. Alimony and Separate Maintenance Payments4-19
    - 4-4b. Imputed Interest on Below-Market Loans4-22
    - 4-4c. Income from Annuities4-25
    - 4-4d. Prizes and Awards4-27
    - 4-4e. Unemployment Compensation4-28
    - 4-4f. Social Security Benefits4-29
    - 4-4g. Income Earned from Foreign Bank and Financial Accounts and FBAR Rules4-30
  - 4-5. Gains and Losses from Property Transactions—In General4-31
  - 4-6. Gains and Losses from Property Transactions—Capital Gains and Losses4-32
    - 4-6a. Definition of a Capital Asset4-32
    - 4-6b. Taxation of Net Capital Gain4-33
    - 4-6c. Treatment of Net Capital Loss4-34
    - 4-6d. Taxation of Digital Assets (Including Virtual Currency)4-35
  - 4-7. Tax Planning4-37
    - 4-7a. Minimizing Income Included in Gross Income4-37
    - 4-7b. Deferring Income Recognition4-38
    - 4-7c. Reducing the Rate at which Income is Taxed4-40
  - Key Terms4-41
  - Discussion Questions4-42
  - Computational Exercises4-44
  - Problems4-46
  - Tax Return Problems4-53
  - Research Problems4-55
  - Becker CPA Review Questions4-56
- Chapter 5. Gross Income: Exclusions4-58
  - 5-1. Income Exclusions5-1
    - 5-1b. Exclusions versus Non-Income Items5-2
  - 5-2. Gifts and Inheritances5-2
    - 5-2b. Employer Payments to Employees5-3
    - 5-2c. Employee Death Benefits5-3
  - 5-3. Life Insurance Proceeds5-4
    - 5-3b. Accelerated Death Benefits5-4
    - 5-3c. Transfer for Valuable Consideration5-5
  - 5-4. Scholarships5-6
    - 5-4b. Timing Issues5-7
  - 5-5. Compensation for Injuries, Sickness, and Disaster Relief5-7
    - 5-5b. Wrongful Incarceration5-9
    - 5-5c. Workers’ Compensation5-9
    - 5-5d. Accident and Health Insurance Benefits5-9
    - 5-5e. Disaster Relief Benefits5-9
  - 5-6. Employer–Sponsored Accident and Health Plans5-10
    - 5-6a. Medical Reimbursement Plans5-10
    - 5-6b. Long-Term Care Insurance Benefits5-11
  - 5-7. Meals and Lodging5-11
    - 5-7b. Other Housing Exclusions5-13
  - 5-8. Employee Fringe Benefits5-13
    - 5-8a. Specific Benefits5-14
    - 5-8b. Cafeteria Plans5-14
    - 5-8c. Flexible Spending Plans5-15
    - 5-8d. General Classes of Excluded Benefits5-15
    - 5-8e. Group Term Life Insurance5-19
  - 5-9. Foreign Earned Income5-20
  - 5-10. Interest on Certain State and Local Government Obligations5-22
  - 5-11. Educational Savings Bonds5-23
  - 5-12. Education Savings Programs (§ 529 and § 530 Plans)5-24
    - 5-12a. Qualified Tuition Program5-24
    - 5-12b. Coverdell Education Savings Account5-25
  - 5-13. Qualified ABLE Programs (§ 529A Plans)5-25
  - 5-14. Income from Discharge of Indebtedness5-26
  - 5-15. Tax Benefit Rule5-27
  - 5-16. Tax Planning5-29
    - 5-16a. Life Insurance5-29
    - 5-16b. Employee Fringe Benefits5-29
    - 5-16c. Investment Income5-30
  - Key Terms5-31
  - Discussion Questions5-31
  - Computational Exercises5-34
  - Problems5-35
  - Tax Return Problems5-42
  - Research Problems5-44
  - Becker CPA Review Questions5-45
Part 3. Deductions5-47
- Chapter 6. Deductions and Losses: In General5-48
  - 6-1. Classification of Deductible Expenses6-1
    - 6-1a. Classifying Deductions6-2
    - 6-1b. Authority for Deductions6-2
    - 6-1c. Deduction Criteria for § 162 and § 2126-4
    - 6-1d. Personal Expenses6-5
    - 6-1e. Business and Nonbusiness Losses6-5
    - 6-1f. Deduction for Qualified Business Income6-6
    - 6-1g. Reporting Procedures6-8
  - 6-2. Deductions and Losses—Timing of Expense Recognition6-8
    - 6-2b. Cash Method Requirements6-9
    - 6-2c. Accrual Method Requirements6-9
    - 6-2d. Prepaid Expenses—The “12-Month Rule”6-10
    - 6-2e. Time Value of Tax Deductions6-11
  - 6-3. Disallowance Possibilities6-11
    - 6-3a. Public Policy Limitation6-12
    - 6-3b. Political Contributions and Lobbying Activities6-14
    - 6-3c. Excessive Executive Compensation6-15
    - 6-3d. Investigation of a Business6-16
    - 6-3e. Hobby Losses6-17
    - 6-3f. Rental of Vacation Homes6-20
    - 6-3g. Expenditures Incurred for Taxpayer’s Benefit or Taxpayer’s Obligation6-24
    - 6-3h. Disallowance of Personal Expenditures6-24
    - 6-3i. Disallowance of Deductions for Capital Expenditures6-25
    - 6-3j. Transactions between Related Parties6-27
    - 6-3k. Substantiation Requirements6-28
    - 6-3l. Expenses and Interest Relating to Tax-Exempt Income6-28
    - 6-3m. Other Disallowances6-29
  - 6-4. Tax Planning6-29
    - 6-4b. Hobby Losses6-31
    - 6-4c. Do Deduction Limits Affect Executive Compensation?6-31
  - Key Terms6-32
  - Discussion Questions6-33
  - Computational Exercises6-35
  - Problems6-36
  - Tax Return Problems6-42
  - Research Problems6-44
  - Becker CPA Review Questions6-46
- Chapter 7. Deductions and Losses: Certain Business Expenses and Losses6-48
  - 7-1. Bad Debts7-1
    - 7-1a. Specific Charge-Off Method7-2
    - 7-1b. Business versus Nonbusiness Bad Debts7-3
    - 7-1c. Loans between Related Parties7-3
  - 7-2. Worthless Securities and Small Business Stock Losses7-4
    - 7-2b. Small Business Stock (§ 1244 Stock) Losses7-5
  - 7-3. Losses of Individuals7-5
    - 7-3a. Events That Are Not Casualties7-6
    - 7-3b. Theft Losses7-6
    - 7-3c. When to Deduct Casualty Losses7-7
    - 7-3d. Measuring the Amount of Loss7-8
    - 7-3e. Personal Casualty Gains and Losses7-11
    - 7-3f. Statutory Framework for Deducting Losses of Individuals7-13
  - 7-4. Research and Experimental Expenditures7-14
    - 7-4a. Capitalization and Amortization Method7-15
  - 7-5. Excess Business Losses7-16
    - 7-5a. Excess Business Loss Defined7-16
    - 7-5b. Losses from Partnerships or S Corporations7-17
    - 7-5c. Other Rules7-17
  - 7-6. Net Operating Losses7-18
    - 7-6a. General Rules7-18
    - 7-6b. Computation of the Net Operating Loss7-19
    - 7-6c. Computation of Taxable Income for Year to Which Net Operating Loss Is Carried7-22
    - 7-6d. Calculation of the Remaining Net Operating Loss7-23
  - 7-7. Tax Planning7-23
    - 7-7b. Casualty Losses7-24
  - Key Terms7-25
  - Discussion Questions7-25
  - Computational Exercises7-27
  - Problems7-28
  - Tax Return Problems7-32
  - Research Problems7-34
  - Becker CPA Review Questions7-35
- Chapter 8. Depreciation, Cost Recovery, Amortization, and Depletion7-36
  - 8-1. Depreciation and Cost Recovery8-1
    - 8-1b. Placed in Service Requirement8-2
    - 8-1c. Cost Recovery Allowed or Allowable8-2
    - 8-1d. Cost Recovery Basis for Personal Use Assets Converted to Business or Income-Producing Use8-3
  - 8-2. Modified Accelerated Cost Recovery System (MACRS): General Rules8-3
    - 8-2a. Personalty (and Certain Realty): Recovery Periods and Methods8-3
    - 8-2b. Realty: Recovery Periods and Methods8-8
  - 8-3. Modified Accelerated Cost Recovery System (MACRS): Special Rules8-9
    - 8-3a. Election to Expense Assets (§ 179)8-9
    - 8-3b. Additional First-Year Depreciation (Bonus Depreciation)8-14
    - 8-3c. Using § 179 and Bonus Depreciation Effectively8-16
    - 8-3d. Business and Personal Use of Automobiles and Other Listed Property8-19
    - 8-3e. Alternative Depreciation System (ADS)8-24
  - 8-4. Reporting Procedures8-25
  - 8-5. Amortization8-26
  - 8-6. Depletion8-29
    - 8-6a. Intangible Drilling and Development Costs (IDCs)8-30
    - 8-6b. Depletion Methods8-30
  - 8-7. Tax Planning8-32
    - 8-7b. Amortization8-32
    - 8-7c. Cost Recovery Tables8-33
  - Key Terms8-38
  - Discussion Questions8-38
  - Computational Exercises8-39
  - Problems8-40
  - Tax Return Problems8-44
  - Research Problems8-45
  - Becker CPA Review Questions8-46
- Chapter 9. Deductions: Employee and Self-Employed-Related Expenses8-48
  - 9-1. Employee versus Independent Contractor9-1
  - 9-2. Self-Employed and Employee-Related Expenses—In General9-4
  - 9-3. Transportation Expenses9-4
    - 9-3b. Computation of Automobile Expenses9-5
  - 9-4. Travel Expenses9-8
    - 9-4b. Away-from-Home Requirement9-9
    - 9-4c. Restrictions on Travel Expenses9-10
    - 9-4d. Combined Business and Pleasure Travel9-11
  - 9-5. Education Expenses9-13
    - 9-5b. Legal Requirements to Keep a Job9-13
    - 9-5c. Maintaining or Improving Existing Skills9-13
    - 9-5d. What Expenses Are Allowed?9-14
    - 9-5e. Other Provisions Dealing with Education9-15
  - 9-6. Other Business Expenses9-15
    - 9-6b. Moving Expenses9-20
    - 9-6c. Entertainment and Meal Expenses9-20
    - 9-6d. Miscellaneous Employee Expenses9-23
  - 9-7. The Deduction for Qualified Business Income9-24
    - 9-7a. General Rule9-24
    - 9-7b. The Overall Limitation: Modified Taxable Income9-25
    - 9-7c. What Is Qualified Business Income?9-25
    - 9-7d. What Is a Qualified Trade or Business?9-25
    - 9-7e. Limitations on the QBI Deduction9-28
    - 9-7f. Limitation Based on Wages and Capital Investment9-28
    - 9-7g. Limitation for “Specified Services” Businesses9-32
    - 9-7h. Reporting the Qualified Business Income Deduction9-41
    - 9-7i. Aggregation of Qualified Trades or Businesses under the § 199A Regulations9-42
    - 9-7j. Treatment of Losses9-47
    - 9-7k. Other Items in the § 199A Regulations9-49
  - 9-8. Contributions to Retirement Accounts9-51
    - 9-8a. Employee IRAs9-51
    - 9-8b. Self-Employed Keogh (H.R. 10) Plans9-52
  - 9-9. Classification of Employee Expenses9-52
    - 9-9a. Accountable Plans9-52
    - 9-9b. Nonaccountable Plans9-53
  - 9-10. Limitations on Itemized Deductions9-54
    - 9-10a. Miscellaneous Itemized Deductions Subject to the 2%-of-AGI Floor9-54
    - 9-10b. Itemized Deductions Not Subject to the 2%-of-AGI Floor9-54
  - 9-11. Tax Planning9-55
    - 9-11b. Implications of Misclassifying Workers9-55
    - 9-11c. Transportation and Travel Expenses9-56
  - Key Terms9-57
  - Discussion Questions9-58
  - Computational Exercises9-60
  - Problems9-61
  - Tax Return Problems9-66
  - Research Problems9-70
  - Becker CPA Review Questions9-71
- Chapter 10. Deductions and Losses: Certain Itemized Deductions9-72
  - 10-1. Medical Expenses10-1
    - 10-1a. Medical Expenses Defined10-2
    - 10-1b. Capital Expenditures for Medical Purposes10-3
    - 10-1c. Medical Expenses Incurred for Spouse and Dependents10-4
    - 10-1d. Transportation, Meal, and Lodging Expenses for Medical Treatment10-4
    - 10-1e. Amounts Paid for Medical Insurance Premiums10-5
    - 10-1f. Year of Deduction10-6
    - 10-1g. Reimbursements10-6
    - 10-1h. Health Savings Accounts10-7
    - 10-1i. Affordable Care Act Provisions10-9
  - 10-2. Taxes10-9
    - 10-2a. Deductibility as a Tax10-9
    - 10-2b. Property Taxes10-10
    - 10-2c. State and Local Income Taxes and Sales Taxes10-12
  - 10-3. Interest10-12
    - 10-3a. Allowed and Disallowed Items10-13
    - 10-3b. Restrictions on Deductibility and Timing Considerations10-15
    - 10-3c. Classification of Interest Expense10-16
  - 10-4. Charitable Contributions10-17
    - 10-4a. Criteria for a Gift10-17
    - 10-4b. Qualified Organizations10-19
    - 10-4c. Time of Deduction10-19
    - 10-4d. Record-Keeping and Valuation Requirements10-19
    - 10-4e. Limitations on Charitable Contribution Deduction10-21
  - 10-5. Timing of Payments to Maximize Deductions10-25
  - 10-6. Other Itemized Deductions10-26
  - 10-7. Comprehensive Example of Schedule A10-26
  - 10-8. Tax Planning10-27
    - 10-8b. Ensuring the Charitable Contribution Deduction10-28
    - 10-8c. Planning to Avoid Nondeductible Treatment10-30
  - Key Terms10-30
  - Discussion Questions10-31
  - Computational Exercises10-32
  - Problems10-33
  - Tax Return Problems10-38
  - Research Problems10-42
  - Becker CPA Review Questions10-43
- Chapter 11. Investor Losses10-45
  - 11-1. The Tax Shelter Problem11-1
  - 11-2. At-Risk Limits11-3
  - 11-3. Passive Activity Loss Limits11-4
    - 11-3a. Classification and Tax Treatment of Passive Activity Income and Losses11-4
    - 11-3b. Taxpayers Subject to the Passive Activity Loss Rules11-8
    - 11-3c. Identifying Passive Activities11-9
    - 11-3d. Interaction of the At-Risk and Passive Activity Loss Limits11-14
    - 11-3e. Special Passive Activity Rules for Real Estate Activities11-15
    - 11-3f. Dispositions of Passive Activities11-19
  - 11-4. Investment Interest Limitation11-20
    - 11-4a. Limitation Imposed11-20
    - 11-4b. Computation of Allowable Deduction11-21
  - 11-5. Other Investment Losses11-22
  - 11-6. Tax Planning11-23
    - 11-6b. Maximizing the Investment Interest Deduction11-24
    - 11-6c. Effect of the Additional Tax on Net Investment Income11-25
  - Key Terms11-26
  - Discussion Questions11-27
  - Computational Exercises11-28
  - Problems11-29
  - Research Problems11-35
  - Becker CPA Review Questions11-36
Part 4. Special Tax Computation Methods, Tax Credits, and Payment Procedures11-37
- Chapter 12. Alternative Minimum Tax11-38
  - 12-1. The AMT Calculation Generally12-1
    - 12-1a. AMT Formula: Alternative Minimum Taxable Income (AMTI)12-1
    - 12-1b. AMT Formula: Other Components12-3
  - 12-2. AMT Adjustments and Preferences12-5
    - 12-2a. Adjustments12-5
    - 12-2b. Preferences12-17
    - 12-2c. Illustration of the AMT Computation12-19
  - 12-3. AMT Credit12-20
  - 12-4. The Corporate AMT12-21
  - 12-5. Tax Planning12-21
    - 12-5b. Controlling the Timing of Preferences and Adjustments12-22
    - 12-5c. Other AMT Tax Planning Strategies12-23
  - Key Terms12-24
  - Discussion Questions12-24
  - Computational Exercises12-25
  - Problems12-26
  - Tax Return Problems12-31
  - Research Problems12-33
  - Becker CPA Review Questions12-34
- Chapter 13. Tax Credits and Payment Procedures12-36
  - 13-1. Tax Policy Considerations13-2
  - 13-2. Overview and Priority of Credits13-3
    - 13-2b. The General Business Credit13-4
  - 13-3. Specific Business-Related Tax Credits13-5
    - 13-3a. Tax Credit for Rehabilitation Expenditures13-5
    - 13-3b. Work Opportunity Tax Credit13-6
    - 13-3c. Research Activities Credit13-6
    - 13-3d. Low-Income Housing Credit13-8
    - 13-3e. Disabled Access Credit13-8
    - 13-3f. Energy Credits13-9
    - 13-3g. Credit for Small Employer Pension Plan Startup Costs13-9
    - 13-3h. Credit for Employer-Provided Child Care13-10
    - 13-3i. Credit for Employer-Provided Family and Medical Leave13-10
  - 13-4. Foreign Tax Credit and Individual Tax Credits13-12
    - 13-4a. Foreign Tax Credit13-12
    - 13-4b. Earned Income Credit13-13
    - 13-4c. Child and Dependent Tax Credits13-14
    - 13-4d. Credit for Child and Dependent Care Expenses13-15
    - 13-4e. Education Tax Credits13-17
    - 13-4f. Residential Energy Credits13-18
    - 13-4g. Clean Vehicle Credits13-19
    - 13-4h. Credit for Certain Retirement Plan Contributions13-21
  - 13-5. Payment Procedures13-23
    - 13-5a. Employers13-23
    - 13-5b. Self-Employed Taxpayers13-26
    - 13-5c. Additional Medicare Taxes on High-Income Individuals13-29
  - 13-6. Tax Planning13-31
    - 13-6b. Adjustments to Increase Withholding13-32
    - 13-6c. Adjustments to Avoid Overwithholding13-33
  - Key Terms13-33
  - Discussion Questions13-33
  - Computational Exercises13-34
  - Problems13-36
  - Tax Return Problems13-39
  - Research Problems13-41
  - Becker CPA Review Questions13-43
Part 5. Property Transactions13-44
- Chapter 14. Property Transactions: Determination of Gain or Loss and Basis Considerations13-46
  - 14-1. Determination of Gain or Loss14-1
    - 14-1a. Realized Gain or Loss14-1
    - 14-1b. Recognized Gain or Loss14-7
    - 14-1c. Nonrecognition of Gain or Loss14-7
  - 14-2. Basis Considerations14-8
    - 14-2a. Determination of Cost Basis14-8
    - 14-2b. Gift Basis14-10
    - 14-2c. Inherited Property14-12
    - 14-2d. Disallowed Losses14-14
    - 14-2e. Property Converted from Personal Use to Business or Income-Producing Use14-18
    - 14-2f. Summary of Basis Adjustments14-19
  - 14-3. Tax Planning14-19
    - 14-3b. Selection of Property for Making Gifts14-21
    - 14-3c. Selection of Property to Pass at Death14-21
    - 14-3d. Disallowed Losses14-21
  - Key Terms14-23
  - Discussion Questions14-23
  - Computational Exercises14-25
  - Problems14-26
  - Tax Return Problems14-33
  - Research Problems14-35
  - Becker CPA Review Questions14-36
- Chapter 15. Property Transactions: Nontaxable Exchanges and Tax-Free Transactions14-38
  - 15-1. Nontaxable Exchanges and Tax-Free Transactions15-1
  - 15-2. Like-Kind Exchanges—§ 103115-2
    - 15-2a. Like-Kind Property15-3
    - 15-2b. Exchange Requirement15-3
    - 15-2c. Boot15-5
    - 15-2d. Basis and Holding Period of Property Received15-6
    - 15-2e. Reporting Considerations15-9
  - 15-3. Involuntary Conversions—§ 103315-9
    - 15-3a. Involuntary Conversion Defined15-11
    - 15-3b. Computing the Amount Realized15-11
    - 15-3c. Replacement Property15-12
    - 15-3d. Time Limitation on Replacement15-13
    - 15-3e. Nonrecognition of Gain15-14
    - 15-3f. Reporting Considerations15-15
  - 15-4. Sale of a Residence—§ 12115-15
    - 15-4a. Principal Residence15-15
    - 15-4b. Requirements for Exclusion Treatment15-16
    - 15-4c. Calculating the Exclusion15-17
    - 15-4d. Exceptions to the Two-Year Rules15-19
  - 15-5. Tax Planning15-21
    - 15-5b. Involuntary Conversions15-22
    - 15-5c. Sale of a Principal Residence15-22
  - Key Terms15-24
  - Discussion Questions15-24
  - Computational Exercises15-26
  - Problems15-27
  - Tax Return Problems15-34
  - Research Problems15-37
  - Becker CPA Review Questions15-38
- Chapter 16. Property Transactions: Capital Gains and Losses15-40
  - 16-1. General Scheme of Taxation16-2
  - 16-2. Capital Assets16-2
    - 16-2a. Definition of a Capital Asset (§ 1221)16-2
    - 16-2b. Effect of Judicial Action16-5
    - 16-2c. Statutory Expansions16-5
  - 16-3. Sale or Exchange16-7
    - 16-3a. Worthless Securities and § 1244 Stock16-7
    - 16-3b. Retirement of Corporate Obligations16-7
    - 16-3c. Options16-8
    - 16-3d. Patents16-10
    - 16-3e. Franchises, Trademarks, and Trade Names (§ 1253)16-11
    - 16-3f. Lease Cancellation Payments16-13
  - 16-4. Holding Period16-13
    - 16-4b. Special Holding Period Rules16-14
    - 16-4c. Special Rules for Short Sales16-15
  - 16-5. Tax Treatment of Capital Gains and Losses of Noncorporate Taxpayers16-18
    - 16-5a. Capital Gain and Loss Netting Process16-18
    - 16-5b. Qualified Dividend Income16-22
    - 16-5c. Alternative Tax on Net Capital Gain and Qualified Dividend Income16-22
    - 16-5d. Treatment of Net Capital Losses16-25
    - 16-5e. Reporting Procedures16-27
  - 16-6. Tax Treatment of Capital Gains and Losses of Corporate Taxpayers16-28
  - 16-7. Tax Planning16-34
    - 16-7b. Planning for Capital Asset Status16-34
    - 16-7c. Effect of Capital Asset Status in Transactions Other Than Sales16-35
    - 16-7d. Stock Sales16-35
    - 16-7e. Maximizing Benefits16-36
    - 16-7f. Year-End Planning16-36
  - Key Terms16-37
  - Discussion Questions16-37
  - Computational Exercises16-39
  - Problems16-40
  - Tax Return Problems16-45
  - Research Problems16-46
  - Becker CPA Review Questions16-48
- Chapter 17. Property Transactions: § 1231 and Recapture Provisions16-49
  - 17-1. Section 1231 Assets17-2
    - 17-1b. Property Included17-3
    - 17-1c. Property Excluded17-3
    - 17-1d. Special Rules for Certain § 1231 Assets17-3
    - 17-1e. General Procedure for § 1231 Computation17-4
  - 17-2. Section 1245 Recapture17-9
    - 17-2a. Section 1245 Property17-11
    - 17-2b. Observations on § 124517-11
  - 17-3. Section 1250 Recapture17-12
    - 17-3a. Section 1250 Recapture Situations17-12
    - 17-3b. Unrecaptured § 1250 Gain (Real Estate 25% Gain)17-13
  - 17-4. Considerations Common to §§ 1245 and 125017-14
    - 17-4b. Other Applications17-16
  - 17-5. Special Recapture Provisions17-18
    - 17-5b. Gain from Sale of Depreciable Property between Certain Related Parties17-18
    - 17-5c. Intangible Drilling Costs17-18
  - 17-6. Reporting Procedures17-18
  - 17-7. Tax Planning17-26
    - 17-7b. Timing of Recapture17-26
    - 17-7c. Postponing and Shifting Recapture17-27
    - 17-7d. Avoiding Recapture17-27
  - Key Terms17-27
  - Discussion Questions17-27
  - Computational Exercises17-29
  - Problems17-30
  - Tax Return Problems17-35
  - Research Problems17-36
  - Becker CPA Review Questions17-37
Part 6. Accounting Periods, Accounting Methods, and Deferred Compensation17-39
- Chapter 18. Accounting Periods and Methods17-40
  - 18-1. Accounting Periods18-1
    - 18-1a. Specific Provisions for Partnerships, S Corporations, and Personal Service Corporations18-2
    - 18-1b. Selecting the Tax Year18-5
    - 18-1c. Changing the Accounting Period18-5
    - 18-1d. Taxable Periods of Less Than One Year18-6
    - 18-1e. Mitigation of the Annual Accounting Period Concept18-7
  - 18-2. Accounting Methods18-9
    - 18-2b. Cash Receipts and Disbursements Method18-9
    - 18-2c. Accrual Method18-11
    - 18-2d. Hybrid Method18-16
    - 18-2e. Change in Accounting Method18-16
  - 18-3. Special Accounting Methods18-18
    - 18-3a. Installment Method18-19
    - 18-3b. Long-Term Contracts18-23
  - 18-4. Inventories18-27
    - 18-4a. Determining Inventory Cost18-28
    - 18-4b. The LIFO Election18-32
    - 18-4c. Special Inventory Methods Relating to Farming and Ranching18-33
    - 18-4d. Inventory of Small Taxpayers18-33
  - 18-5. Tax Planning18-33
    - 18-5b. Cash Method of Accounting18-34
    - 18-5c. Installment Method18-34
    - 18-5d. Inventories18-35
  - Key Terms18-36
  - Discussion Questions18-36
  - Computational Exercises18-39
  - Problems18-41
  - Research Problems18-49
  - Becker CPA Review Question18-50
- Chapter 19. Deferred Compensation18-50
  - 19-1. Individual Retirement Accounts (IRAs)19-1
    - 19-1b. Rollovers, Conversions, and Recharacterizations19-6
    - 19-1c. Using IRA Assets19-7
  - 19-2. Employer-Sponsored Retirement Plans19-9
    - 19-2a. Types of Plans19-10
    - 19-2b. Qualification Requirements19-12
    - 19-2c. Tax Consequences to the Employee and Employer19-16
    - 19-2d. Limitations on Contributions to and Benefits from Qualified Plans19-16
    - 19-2e. Section 401(k) Plans19-18
  - 19-3. Retirement Plans for Self-Employed Individuals19-19
    - 19-3a. Keogh (H.R. 10) Plans19-19
    - 19-3b. Solo § 401(k) Plans19-20
    - 19-3c. Savings Incentive Match Plan for Employees (SIMPLE Plans)19-21
    - 19-3d. Simplified Employee Pension Plans (SEPs)19-21
  - 19-4. Nonqualified Deferred Compensation Plans19-22
    - 19-4b. Tax Treatment to the Employer and Employee19-22
  - 19-5. Stock Options19-23
    - 19-5a. Incentive Stock Options19-24
    - 19-5b. Nonqualified Stock Options19-26
  - 19-6. Tax Planning19-26
    - 19-6b. Self-Employed Retirement Plans19-27
    - 19-6c. Individual Retirement Accounts (IRAs), Roth IRAs, § 401(k) Plans, and Roth § 401(k) Plans19-27
    - 19-6d. Comparison of § 401(k) Plan with IRA19-27
    - 19-6e. Nonqualified Deferred Compensation (NQDC) Plans19-28
    - 19-6f. Stock Options19-29
    - 19-6g. Liquidating Retirement Assets19-29
  - Key Terms19-31
  - Discussion Questions19-31
  - Computational Exercises19-32
  - Problems19-34
  - Research Problems19-37
  - Becker CPA Review Questions19-39
Part 7. Corporations and Partnerships19-40
- Chapter 20. Corporations and Partnerships19-42
  - 20-1. Choice of Entity20-1
    - 20-1a. Nontax Considerations20-1
    - 20-1b. General Tax Consequences of Different Forms of Business Entities20-3
    - 20-1c. Check-the-Box Election20-4
  - 20-2. Corporations20-5
    - 20-2b. Individuals and Corporations Compared—An Overview20-5
    - 20-2c. Specific Provisions Compared20-7
    - 20-2d. Deductions Available Only to C Corporations20-11
    - 20-2e. Determination of Corporate Tax Liability20-13
    - 20-2f. Corporate Filing Requirements20-13
    - 20-2g. Reconciliation of Corporate Taxable Income and Accounting Income20-14
  - 20-3. Forming the Corporation20-17
    - 20-3b. Capital Contributions20-19
  - 20-4. Distributions to Shareholders20-20
    - 20-4b. Constructive Dividends20-21
  - 20-5. S Corporations20-22
    - 20-5a. Qualification for S Status20-22
    - 20-5b. Operational Rules20-24
  - 20-6. Partnerships20-27
    - 20-6b. Partnership Formation and Basis20-28
    - 20-6c. Partnership Operations20-30
  - 20-7. Tax Planning20-32
    - 20-7b. C Corporation versus S Status20-34
    - 20-7c. Income Shifting to Reduce the Family Income Tax Burden20-34
  - Key Terms20-35
  - Discussion Questions20-36
  - Computational Exercises20-38
  - Problems20-40
  - Research Problems20-47
  - Becker CPA Review Questions20-48
Back Matter
- Appendix A. Tax Formulas, Tax Rate Schedules, and Tables20-51
- Appendix B. Tax FormsA-28
- Appendix D. Table of Code Sections CitedB-27
- Appendix E. Present Value and Future Value TablesD-10
- Appendix F. Practice Set Assignments—Comprehensive Tax Return ProblemsE-4
- Appendix. Depreciation and the Accelerated Cost Recovery System (ACRS)F-10
- Appendix. Affordable Care Act ProvisionsF-10
- EndsheetsF-10