Part I Introduction to Income Taxation 1 The Professional Practice of Taxation 1-1 1.1 The Basics of Tax Planning 1-4 1.2 Individual Income Tax Formula 1-7 1.3 Tax Compliance vs. Tax Planning 1-15 1.4 Tax Avoidance vs. Tax Evasion 1-28 1.5 Tax Rules vs.
GAAP 1-32 1.6 Goals of Tax Policymakers 1-33 1.7 Other Taxes Paid by Individuals 1-38 1.8 Professional Taxation as a Career 1-41 2 Fundamentals of the Federal Income Tax System 2-1 2.1 Taxpayer Activities: Trade or Business, Investment, or Personal Use 2-4 2.2 Classification of Assets 2-10 2.3 Basis 2-14 2.4 Foundations of Income 2-17 2.
5 Foundations of Deductions 2-21 2.6 Introduction to Property Transactions 2-24 3 Tax Authority, Research, Compliance Rules, and Professional Responsibilities 3-1 3.1 Sources of Tax Authority 3-5 3.2 Locating and Evaluating Authority 3-17 3.3 Compliance Responsibilities 3-20 3.4 Tax Professional Responsibilities 3-31 3.5 Tax Practice and Procedure 3-36 4 Dependents and Filing Status 4-1 4.1 Dependents--Introduction and Qualifying Child 4-3 4.
2 Qualifying Relative and Other Dependency Rules 4-11 4.3 Filing Status--Introduction 4-16 4.4 Head of Household and Qualifying Widow(er) 4-21 4.5 Dependent on Another Return and Kiddie Tax 4-28 4.6 Filing Requirements 4-32 Part II Income 5 Framework for Income Recognition 5-1 5.1 All-Inclusive Approach to Income 5-4 5.2 Judicial Doctrines 5-8 5.3 Accounting Methods and Periods--Income 5-14 5.
4 Business Income for Individuals 5-24 5.5 Qualified Business Income Deduction 5-30 6 Income from Personal Activities 6-1 6.1 Income from Prizes, Awards, and Scholarships 6-6 6.2 Divorces 6-10 6.3 Income and Basis Issues for Gifts and Inheritances 6-14 6.4 Income from Injuries and Other Damage Awards 6-26 6.5 Income from Death of a Taxpayer 6-31 6.6 Forgiveness of Debt 6-35 6.
7 Other Inclusions and Exclusions 6-40 7 Income from Services 7-1 7.1 Wages and Tip Income 7-6 7.2 Income from Insurance-Related Fringe Benefits 7-9 7.3 Income from Other Fringe Benefits 7-18 7.4 Stock Options 7-27 7.5 Reimbursement of Employee Business Expenses 7-34 7.6 Retirement Plans 7-36 7.7 Distribution Rules 7-47 7.
8 Social Security Benefits 7-54 7.9 Foreign Earned Income 7-57 Part II (Ch. 5-7): Comprehensive Tax Return Problem Part III Deductions 8 Framework for Deductions 8-1 8.1 Types of Activities 8-4 8.2 Disallowance of Deductions 8-8 8.3 Types of Deductions 8-13 8.4 Accounting Methods for Deductions 8-15 8.5 Capital Expenditure vs.
Repair 8-22 8.6 Accounting for Inventories 8-24 9 Deductions for AGI and Itemized Deductions 9-1 9.1 Deductions for AGI 9-5 9.2 Deductions from AGI: Itemized Deductions vs. Standard Deduction 9-14 9.3 Medical Expenses 9-16 9.4 Taxes 9-20 9.5 Interest 9-25 9.
6 Charitable Contributions 9-30 9.7 Casualty Losses 9-42 9.8 Other Itemized Deductions 9-45 10 Business Expenses 10-1 10.1 Business Expense Requirements 10-4 10.2 Transportation and Travel Expenses 10-8 10.3 Entertainment and Education Expenses 10-14 10.4 Business Interest 10-18 10.5 Bad Debts 10-21 10.
6 Net Operating Losses 10-23 10.7 Excess Business Losses 10-29 11 Limitations on Business Losses and Expenses 11-1 11.1 Business Use of a Home 11-4 11.2 Hobby Losses 11-11 11.3 Vacation Homes 11-14 11.4 Basis and At-Risk Limitations 11-23 11.5 Passive Loss Rules 11-25 11.6 Losses from Partnerships and S Corporations 11-34 Part III (Ch.
8-11): Comprehensive Tax Return Problem Part IV Taxation of Property Transactions 12 Taxation of Investment Income 12-1 12.1 Interest Income 12-4 12.2 Dividend Income 12-14 12.3 Capital Gains and Losses 12-22 12.4 The 3.8% Net Investment Income Tax 12-36 13 Cost Recovery of Property 13-1 13.1 General MACRS Rules 13-5 13.2 Additional Cost Recovery Rules 13-15 13.
3 Amortization 13-26 13.4 Depletion 13-29 14 Taxation of Assets Used in a Trade or Business 14-1 14.1 Distinguishing Section 1231 Assets from Ordinary and Capital Assets 14-4 14.2 Identifying Types of Section 1231 Assets 14-7 14.3 Netting Section 1231 Gains and Losses 14-10 14.4 Section 1245 Depreciation Recapture 14-15 14.5 Section 1250 Depreciation Recapture 14-20 15 Property Transactions: Nonrecognition of Gains and Losses 15-1 15.1 Related-Party Losses 15-4 15.
2 Wash Sales 15-9 15.3 Like-Kind Exchanges 15-15 15.4 Involuntary Conversions 15-26 15.5 Loss on Sale of Personal Use Assets 15-32 15.6 Sale of Principal Residence 15-33 Part IV (Ch. 12-15): Comprehensive Tax Return Problem Part V Other Individual Topics 16 Personal Tax Credits 16-1 16.1 Introduction to Personal Tax Credits 16-4 16.2 Child Tax Credit 16-7 16.
3 Credit for Other Dependents (Family Tax Credit) 16-10 16.4 Child and Dependent Care Credit 16-11 16.5 Earned Income Tax Credit (EITC) 16-18 16.6 Education Credits 16-25 16.7 Other Personal Tax Credits 16-32 17 Alternative Minimum Tax and Other Taxes 17-1 17.1 Alternative Minimum Tax (AMT) 17-4 17.2 Social Security, Medicare, and Self-Employment Taxes 17-17 17.3 Other Taxes 17-24 Parts II-V (Ch.
4-17): Comprehensive Tax Return Problem Part VI CPA Evolution: Core--Tax 18 Business Entity Topics: CPA Exam Core--Taxation and Regulation 18-1 18.1 Corporations: Taxable Income Computation and Special Deductions 18-5 18.2 Other Corporate Tax Issues 18-19 18.3 Business Tax Credits 18-29 18.4 S Corporations 18-40 18.5 Partnerships and Limited Liability Companies 18-61 Part VI (Ch. 18): Comprehensive Tax Return Problem Appendix A Tax Formula Items A-1 Appendix B Tax Forms B-1 Glossary G-1 Index I-1.