Income Tax Fundamentals, 2007 Edition

by Whittenburg, Gerald E.; Altus-Buller, Martha

• ISBN13: 9780324399264
• ISBN10: 032439926X
• Edition: 25th
• Format: Paperback
• Copyright: 2006-12-18
• Publisher: South-Western College/West

Summary

Now in its 25th edition, Income Tax Fundamentals continues to lead the market with the most flexible approach to tax return preparation. This established text is perfect for beginning tax classes - with an emphasis on practical tax preparation rather than sophisticated tax law issues and research. The 2007 Edition helps students learn how to prepare a variety of tax returns, understand the most common tax law rules and formulas, and use the Internet to find tax information.

Table of Contents

Preface	p. viii
As We Go To Press	p. xi
How to Use This Text	p. xii
The Individual Income Tax Return
History and Objectives of the Tax System	p. 1
Reporting and Taxable Entities	p. 2
The Tax Formula for Individuals	p. 5
Who Must File and Where to File	p. 7
Filing Status and Tax Computation	p. 9
Personal and Dependency Exemptions	p. 13
The Standard Deduction	p. 18
Limitation on Total Itemized Deductions	p. 20
A Brief Overview of Capital Gains and Losses	p. 21
Tax and the Internet	p. 23
Electronic Filing (e-Filing)	p. 24
Questions and Problems	p. 25
Gross Income and Exclusions
The Nature of Gross Income	p. 1
Interest and Dividend Income	p. 4
Alimony	p. 6
Prizes and Awards	p. 10
Annuities	p. 11
Life Insurance	p. 14
Gifts and Inheritances	p. 15
Scholarships	p. 15
Accident and Health Insurance	p. 16
Meals and Lodging	p. 16
Municipal Bond interest	p. 17
Social Security Benefits	p. 18
Unemployment Compensation	p. 19
Employee Fringe Benefits	p. 20
Questions and Problems	p. 22
Business Expenses and Retirement Plans
Rental Income and Expenses	p. 1
Passive Loss Limitations	p. 4
Bad Debts	p. 8
Inventories	p. 8
Net Operating Losses	p. 12
Individual Retirement Accounts	p. 14
Keogh (H.R. 10) Plans and Simplified employee pensions	p. 17
Qualified Retirement Plans Including Section 401 (k) Plans	p. 18
Rollovers	p. 21
Simple Plans	p. 23
Questions and Problems	p. 25
Self-Employed and Employee Expenses
Classification of Deductions	p. 1
Travel Expenses	p. 2
Transportation	p. 5
Office in the Home	p. 8
Entertainment	p. 11
Educational Expenses	p. 12
Dues, Subscriptions, and Publications	p. 15
Special Clothing and Uniforms	p. 15
Business Gifts	p. 16
Schedule C	p. 17
Questions and Problems	p. 19
Itemized Deductions and Other Incentives
Medical Expenses	p. 1
Taxes	p. 4
Interest	p. 7
Contributions	p. 10
Casualty and Theft Losses	p. 14
Miscellaneous Deductions	p. 16
Moving Expenses	p. 20
Hobby Losses	p. 21
Educational Incentives	p. 22
Questions and Problems	p. 28
Credits and Special Taxes
Child Tax Credit	p. 1
Earned Income Credit	p. 2
Child and Dependent Care Credit	p. 4
Education Tax Credits	p. 5
Foreign Tax Credit	p. 9
Adoption Expenses	p. 10
Temporary Energy Credits-2006 and 2007	p. 12
The Individual Alternative Minimum Tax (AMT)	p. 14
Unearned Income of Minor Children	p. 19
Community Property	p. 24
Questions and Problems	p. 28
Accounting Periods and Methods and Depreciation
Accounting Periods	p. 1
Accounting Methods	p. 4
Depreciation	p. 6
Modified Accelerated Cost Recovery System (MACRS)	p. 7
Election to Expense	p. 13
Listed Property	p. 14
Limitation on Depreciation of Luxury Automobiles	p. 18
Intangibles	p. 20
Related Parties (Section 267)	p. 21
Questions and Problems	p. 23
Capital Gains and Losses
What Is a Capital Asset?	p. 1
Holding Period	p. 2
Calculation of Gain or Loss	p. 3
Net Capital Gains	p. 6
Net Capital Losses	p. 8
Section 1231 Gains and Losses	p. 10
Depreciation Recapture	p. 10
Capital Gains and Casualty Gains and Losses	p. 18
Installment Sales	p. 21
Like-Kind Exchanges	p. 25
Involuntary Conversions	p. 27
Sale of a Personal Residence	p. 28
Questions and Problems	p. 31
Withholding, Estimated Payments, and Payroll Taxes
Withholding Methods	p. 1
Estimated Payments	p. 8
The FICA Tax	p. 9
Federal Tax Deposit System	p. 11
Employer Reporting Requirements	p. 12
Self-Employment Tax	p. 17
The FUTA Tax	p. 19
The Nanny Tax	p. 20
Questions and Problems	p. 29
Partnership Taxation
Nature of Partnership Taxation	p. 1
Partnership Formation	p. 2
Partnership Income Reporting	p. 4
Current Distributions and Guaranteed Payments	p. 5
Tax Years	p. 6
Transactions between Partners and the Partnership	p. 13
The At-Risk Rule	p. 14
Limited Liability Companies	p. 15
Questions and Problems	p. 16
The Corporate Income Tax
Corporate Tax Rates	p. 1
Corporate Capital Gains and Losses	p. 2
Special Deductions and Limitations	p. 3
Schedule M-1	p. 5
Filing Requirements and Estimated Tax	p. 6
S Corporations	p. 8
Corporate Formation	p. 12
Corporate Accumulations	p. 20
The Corporate Alternative Minimum Tax	p. 20
Questions and Problems	p. 22
Tax Administration and Tax Planning
The Internal Revenue Service	p. 1
The Audit Process	p. 4
Interest and Penalties	p. 8
Statute of Limitations	p. 11
Preparers, Proof, and Privilege	p. 12
The Taxpayer Bill of Rights	p. 14
Tax Planning	p. 15
Questions and Problems	p. 20
Appendices
Tax Rate Schedules and Tax Tables	p. A-1
Earned Income Credit Table	p. B-1
Withholding Tables	p. C-1
Additional Comprehensive Tax Return Problems	p. D-1
Glossary of Tax Terms	p. G-1
Solutions to Self-Study Problems	p. S-1
Index	p. I-1
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