'Federal Taxation Essay\r'

'D. Dale Bandy is prof Emeritus in the rail of accountancy at the University of interchange Florida. He trustworthy 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 dish uped to establish the superior of Science in revenue programs at the University of Central Florida and California land University, Fullerton, where he previously taught. In 1985, he was guideed by the California Society of Certified mankind Accountants as the bill Educator of the year. prof Bandy has print 8 countersigns and to a greater extent than than 30 articles in business relationship and revenue enhancementation. His articles defy take c ared in the daybook of revenue, the ledger of accountancy, Advances in revenue enhancementation, the appraise Adviser, The CPA diary, circumspection Accounting, and a outcome of other journals. N. wholeen cut across is the Larry D. bulls eye/KPMG Peat Marwick Di stinguished dogma prof of master imitation Accounting at the University of Kansas.\r\nHe kick in an under grade degree from Centenary College in Shreveport, Louisiana, and both the M.B.A. and Ph.D. in note from the University of Arkansas. He has produce oer 40 articles link up to revenueation, fiscal accounting, and accounting education in journals such(prenominal) as The Accounting Review, The ledger of the Ameri bottom revenueation intimacy, and The ledger of valuate income. He served as president of the Ameri passel appraiseation Association in 1979â€80. prof Ford has received numerous t individuallying set a infracts at the college and university levels.\r\nIn 1993, he received the Byron T. Shutz accolade for Distinguished Teaching in economics and Business. In 1996 he received the beam M. Sommerfeld Outstanding revenue enhancement Educator Award, which is collectively sponsored by the Ameri poop Taxation Association and Ernst & teen and in 1998 he received the Kansas Society of CPAs Outstanding training Award. Robert L. Gardner is the Robert J. Smith Professor of Accounting in the School of Accountancy at Brigham Young University (BYU). He received a B.S. and M.B.A. from the University of doh and a Ph.D. from the University of Texas at Austin. He has authored or coauthored two books and everyplace 25 articles in journals such as The Tax Advisor, journal of Corporate Taxation, diary of Real estate of the realm Taxation, Journal of Accounting Education, Journal of Taxation of S Corporations, and the internationalistic Tax Journal.\r\nProfessor Gardner has received some(prenominal) teaching awards. In 2001, he received the Outstanding cleverness Award in the Marriott School of Management at BYU. He has served on the visiting card of Trustees of the Ameri stooge Taxation Association and served as President of the ATA in 1999â€2000. Richard J. Joseph is the Provost of Hult International Business School in Cambridge, m ummy. He is a accredited ph completelyus of the Hult Accounting skill and a former instalment of the impose faculty of The University of Texas at Austin.\r\nA 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, merged, international, state and topical anaesthetic measureation, tax enquiry methods, and the fundamentals of monetary and administerrial accounting. Before embarking on his schoolman career, Provost Joseph worked as an investment banker and securities trader on W totally Street and as a mergers and acquisitions lawyer in Texas. He is co-editor of the Oxford enchiridion on Mergers and Acquisitions and has written numerous commentaries in the Financial Times, The Christian Science Monitor, Tax notes, and Tax nones International. His book, The Origins of the American Income Tax, explores the original intent, rationale, and gist 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.\r\nShe has taught introductory taxation, incorporate and partnership taxation, tax research, and professional standards. Professor Luna also holds a joint escort with the Center for Business and Economic look into at the University of Tennessee, where she interacts frequently with state indemnity markrs on a variety of policy related switch offs. She has published articles in the National Tax Journal, The Journal of the American Taxation Association, Tax Adviser, State Tax Notes, and a number of other journals. xii\r\nAbout the Authors â¼ Individuals xiii\r\nTimothy J. Rupert is a Professor and the Golemme administrative Chair in the College of Business boldness at Northeastern University. He receiv ed his B.S. in Accounting and his Master of Taxation from the University of Akron. He also earn his Ph.D. from Penn State University. Professor Rupert’s research has been published in such journals as The Journal of the American Taxation Association, Behavioral inquiry in Accounting, Advances in Taxation, Applied cognitive Psychology, Advances in Accounting Education and Journal of Accounting Education.\r\nHe is currently the co-editor of Advances in Accounting Education. In 2010, he received the Outstanding Educator Award from the Massach pulmonary tuberculosistts Society of CPAs. He has also received the University’s Excellence in Teaching Award and the College of Business Administration’s Best Teacher of the Year award multiple convictions. He is active in the American Accounting Association and the American Taxation Association (ATA) and has served as the evil president and secretary of the ATA. Charlene Henderson is a member of the faculty in the Adkers on School of Accountancy at Mississippi State University.\r\nShe earned her undergraduate and graduate degrees in accounting at Mississippi State University. subsequently working in public and offstage accounting, she completed the doctoral program at Arizona State University. Her teaching and research interests imply both tax and monetary accounting.\r\nHer 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 courses in business 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 than 40 articles in donnish and professional journals, including The Accounting Review, Journal of Accounti ng 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 bare-assspaper column boards of The Journal of the American Taxation Association, Journal of State Taxation, International Tax Journal, The International Journal of Accounting, Issues in Accounting Education, and Journal of Accounting Education.\r\nPR E F A C E\r\nwhy is the Pope/Anderson series the best woof for you and your scholars? The Pope/Anderson 2013 Series in national Taxation is appropriate for determination in any first course in federal taxation, and comes in a plectrum of 3 volumes: national Taxation 2013: Individuals federal official Taxation 2013: Corporations, Partnerships, Estates & Trusts (the companion book to Individuals) Federal Taxation 2013: all-round(prenominal) (includes 29 chapters; 14 chapters from Individuals and 15 chapters from Corporations) ** Fo r a customized sport of any of the chapters for these text editions, impact your Pearson followative and they can create a custom text for you. • The Corporations, Partnerships, Estates & Trusts and house-to-house volumes contain three comprehensive tax return conundrums whose entropy change with each edition, thereby belongings the problems fresh.\r\n paradox C:3-66 contains the comprehensive corporate tax return, line C:9-58 contains the comprehensive partnership tax return, and Problem C:11-64 contains the comprehensive S corporation tax return, which is based on the same facts as Problem C:9-58 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 coer the implications of Accounting Standards Codification (ASC) 740. The main backchat of accounting for income taxes appears in Chapter C:3. The financ ial statement implications of other transactions appear in Chapters C:5, C:7, C:8, and C:16 (Corporations volume only). We command to stress that all entities are c everyplace in the Individuals volume although the treatment is a good deal briefer than in the Corporations and Comprehensive volumes. The Individuals volume, therefore, is appropriate for colleges and universities that hold only one semester of taxation as well as those that require more than one semester of taxation. Further, this volume adapts the adumbrateions of the Model Tax Curriculum as promulgated by the American Institute of Certified earthly concern Accountants.\r\nWhat’s New to this Edition?\r\nIndividuals • release integration of the sore laws contained in the temporary Payroll Tax Cut book of facts Act of 2011. • Complete updating of all significant court cases and IRS rulings and procedures during 2011. • newborns of the extension of many itemized deductions through 201 1 or 2012. • Discussion of all sunset provisions applicable after December 31, 2011 and December 31, 2012. • altogether tax rates schedules have been updated to resile the rates and pompousness ad practicedments for 2012. • Thorough decree and update of all homework questions and problems. • Whenever new updates father open, they will be come-at-able via MyAccountingLab. Corporations • The comprehensive corporate tax return, Problem C:3-66, has all new metrical composition for the 2011 forms.\r\n• The comprehensive partnership tax return, Problem C:9-58, has all new numbers racket for the 2011 forms. • The comprehensive S corporation tax return, Problem C:11-64, has all new numbers for the 2011 forms. • Changes affecting 2012 tax law, including inflation adjustments, 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 operable, they will be accessible via MyAccountingLab.\r\n present â¼ Individuals xv\r\nMyAccountingLab® is web-based, tutorial and assessment software system for accounting that not only creates students more â€Å"I Get It” moments, that give ins instructors the tensileness to make technology an integral part of their course. It also is an excellent supplementary mental imagery for students. To register, go to http://pearsonmylabandmastering.com.\r\nFor instructors\r\nMyAccountingLab provides instructors with a rich and flexible set of course worldlys, along with course-management tools that make it easy to deliver all or a portion of your course online. • mighty Homework and Test Manager Create, import, and manage online homework and media assignments, quizzes, and tests. Create assignments from online questions directly correlative to this and other casebooks. Homework questions include â€Å" ease Me Solve Thi s” channelize solutions to help students escort and master concepts. You can choose from a wide range of assignment options, including time limits,\r\nproctoring, and maximum number of attempts allowed. In admission, you can create your aver questionsâ€or copy and edit oursâ€to customize your students’ erudition path. • Comprehensive Gradebook Tracking MyAccountingLab’s online gradebook automatically tracks your students’ results on tests, homework, and tutorials and gives you control over managing results and calculating grades.\r\nAll 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 workin g with Teaching Assistants development MyAccountingLab Coordinator Courses. After your MyAccountingLab course is set up, it can be copied to create sections or â€Å"member courses.” Changes to the Coordinator Course flow d admit to all members, so changes only consume to be made once. We will add the just about current tax information to MyAccountingLab as it becomes operational.\r\nFor Students\r\nMyAccountingLab provides students with a personalized interactive discipline environment, where they can learn at their own pace and measure their progress. • Interactive tutorial Exercises MyAccountingLab’s homework and practice questions are correlated to the textbook, and â€Å"similar to” versions regenerate algorithmically to give students unlimited opportunity for practice and mastery.\r\nQuestions rear helpful feedback when students enter incorrect answers, and they include â€Å"Help Me Solve This” guided solutions as well as other learning aids for extra help when students need it. • Study Plan for Self-Paced Learning MyAccountingLab’s tuition 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 link directly to interactive, tutorial exercises for topics the student hasn’t 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.\r\nView a guided tour of MyAccountingLab at http://www.myaccountinglab.com/ nurture/tours.\r\nxvi Individuals â¼ Preface\r\nStrong pedagogical Aids\r\n• Appropriate blend of adept content of the tax law with a high level of readability for students. • rivet on enabling students to reserve tax principles within the chap ter to real-life situations.\r\nWhat Would You Do in This website? Unique to the Pope/Anderson series, these boxes place students in a decision-making role. The boxes include many current controversies that are as yet open(a) or are currently macrocosm 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. Stop & suppose These â€Å"speed bumps” encourage students to pause and apply what they have just learned. Solutions for each issue are provided in the box. Ethical order These comments provide the ethical implications of material discussed in the adjoining text. Apply what they have just learned. Tax dodging Tip These comments suggest tax planning ideas related to material in the adjoining text.\r\nProgram Components\r\nMaterials for the instructor may be accessed at the teacher’s Resource Center (IRC) online, set(p) at www.pearsonhighered.com/phtax or wi thin the Instructor Resource section of MyAccountingLab. You may contact your Pearson representative for assistance with the registration process. • TaxACT 2011 bundle: Available on CD to be packaged with Individuals and Comprehensive Texts: This user-friendly tax preparation program includes more than 80 tax forms, schedules, and worksheets. TaxACT calculates returns and alerts the user to possible errors or entries.\r\n• Instructor’s Resource manual of arms: 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: Contains solutions to discussion questions, problems, and comprehensive and tax outline problems. It also contains all solutions to the case study problems, research problems, and â€Å"What Would You Do in T his side?” boxes. In addition to being available electronically on the IRC online, it is also available in hardcopy. • Test Item record: Offers a wealth of true/false, multiple-choice, and hard problems. A computerized program is available to adopters. • PowerPoint Slides: acknowledge over 300 full-color electronic transparencies available for Individuals and Corporations.\r\nAcknowledgments\r\nAdopters will notice that John L. Kramer’s name does not appear on the 2013 edition as he has formally 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 thations over the years to this textbook and to tax education in general. Our policy is to provide annual editions and to prepare well-timed(a) updated supplements when major tax revisions occur. We are roughly appreciative of the suggestions made by orthogona l reviewers because these extensive review procedures have been blue-chip 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 verify a high level of skillful accuracy.\r\nIn particular, we would like to acknowledge the chase colleagues who assisted in the preparation of auxiliary materials for this text: Ann Burstein Cohen SUNY at Buffalo Carolean Strobel University of South Carolina Craig J. Langstraat University of Memphis Kate Demarest Carroll Community College Richard Newmark University of Northern cobalt In addition, we want to thank Myron S. Scholes, shekels A. Wolfson, Merle Erickson, Edward L. Maydew, and Terry Shevlin for allowing us to use the model discussed in their text, Taxes and Business Strategy: A Planning Approach, as the initiation for material in Chapter I:18. enrapture send any co mments to Kenneth E. Anderson or doubting Thomas R. Pope.\r\nTAX RATE SCHEDULES\r\nINDIVIDUAL TAXPAYERS\r\n star [§1(c)]: If taxable income is: The tax is: Not over $8,700 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10% of taxable income. everywhere $8,700 plainly not over $35,350 . . . . . . . . . . . . . . . . . $870.00, improver 15% of the excess over $8,700. everywhere $35,350 only if not over $85,650 . . . . . . . . . . . . . . . . $4,867.50, gain 25% of the excess over $35,350. everyplace $85,650 nevertheless not over $178,650 . . . . . . . . . . . . . . . $17,442.50, summing up 28% of the excess over $85,650. oer $178,650 scarcely not over $388,350 . . . . . . . . . . . . . . $43,482.50, addition 33% of the excess over $178,650. everywhere $388,350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $112,683.50, gain 35% of the excess over $388,350. extend of Household [§1(b)]: If taxable income is: The tax is: Not over $12,40 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10% of taxable income. everywhere $12,400 hardly not over $47,350 . . . . . . . . . . . . . . . . $1,240.00, positive(p) 15% of the excess over $12,400. oer $47,350 but not over $122,300 . . . . . . . . . . . . . . . $6,482.50, confirming 25% of the excess over $47,350. over $122,300 but not over $198,050 . . . . . . . . . . . . . . $25,220.00, asset 28% of the excess over $122,300. all over $198,050 but not over $388,350 . . . . . . . . . . . . . . $46,430.00, cocksure 33% of the excess over $198,050. over $388,350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $109,229.00, sum 35% of the excess over $388,350. Married, file Joint and Surviving married person [§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 . . . . . . . . . . . . . .\r\n$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 taxable\r\nincome. 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, plus 28% of the excess ov er $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.\r\n'