Federal Taxation 2022 Edition

Description

To offer maximum flexibility in your course, the text not only focuses on the Federal income taxation of individuals, but also covers additional topics, such as the income taxation of regular corporations and shareholders; the taxation of partnerships and S corporations; Federal estate and gift taxation; the income taxation of estates, trusts, and beneficiaries; and the major aspects of family tax planning.

James W. Pratt
Professor Emeritus at University of Houston

James W. (Jim) Pratt is a Professor Emeritus of Accountancy & Taxation at the University of Houston’s C.T. Bauer College of Business. Jim joined the faculty in 1972 after receiving his doctorate degree from the University of Southern California. He has published articles in leading professional journals, such as the Journal of Accountancy, Journal of Taxation, Journal of Corporate Taxation, Journal of Partnership Taxation, and The Tax Adviser. In addition to his contributions as an author and editor, Jim has received several awards for outstanding teaching. He has also taught in continuing professional education programs for more than 40 years and has served as a tax training consultant for several national and local accounting firms.

William N. Kulsrud
Professor Emeritus at Indiana University

William N. (Bill) Kulsrud is a Professor Emeritus of Accounting at the Kelley School of Business of Indiana University, Indianapolis/Bloomington, and formerly served as Chair of the Master of Science in Accounting and Master of Science in Taxation programs. Bill joined the faculty in 1979 after receiving his Ph.D. from the University of Texas. He has published numerous articles, which have appeared in leading professional journals such as the Journal of Taxation, Journal of Corporate Taxation, The Tax Adviser, Taxation for Accountants, and Taxes—The Tax Magazine. In addition to his contributions as an author and editor, Bill has received many awards for outstanding teaching. In 1990, he was named Accounting Educator of the Year by the Indiana C.P.A. Society. He has also taught hundreds of professional education programs for national and local accounting firms and has developed materials used in their continuing education programs. Bill and author Steve Thompson founded National Tax Education, which provides continuing education for tax professionals throughout the country.

Hughlene Burton
University of North Carolina, Charlotte

Hughlene Burton is an Associate Professor of Accounting. She received her BS in Accounting from Wake Forest University and her Ph.D. from the University of Alabama. She is the former Director of the Turner School of Accountancy. She is a CPA and joined the Belk College of Business in 1996. Before joining academia, she was a tax manager with EY in Charlotte and Greensboro. Her research interests include corporate integration, tax policy, and corporate and international tax issues.

Contributing Authors

Hughlene A. Burton, Ph.D., C.P.A. University of North Carolina at Charlotte
Amy J. N. Yurko, JD, Ph.D., Duquesne University
Ramon Fernandez, M.B.A., C.P.A., C.F.P.® University of St. Thomas (TX)
Robert W. Jamison, Ph.D., C.P.A. Indiana University
William N. Kulsrud, Ph.D., C.P.A. Indiana University
Nathan Oestreich, Ph.D., C.P.A. San Diego State University
James W. Pratt, D.B.A., C.P.A. University of Houston
Roby B. Sawyers, Ph.D., C.P.A. North Carolina State University
Edward J. Schnee, Ph.D., C.P.A. University of Alabama
Steven C. Thompson, Ph.D., C.P.A. Texas State University

Part 1 Introduction to the Federal Tax System

Chapter 1 — An Overview of Federal Taxation

Chapter 2 — Tax Practice and Research

Chapter 3 — Taxable Entities; Tax Formula; Introduction to Property Transactions

Chapter 4 — Personal and Dependency Exemptions; Filing Status; Determination of Tax
for an Individual; Filing Requirements

Part 2 Gross Income

Chapter 5 — Gross Income

Chapter 6 — Gross Income: Inclusions and Exclusions

Part 3 Deductions and Losses

Chapter 7 — Overview of Deductions and Losses

Chapter 8 — Employee Business Expenses

Chapter 9 — Capital Recovery: Depreciation, Amortization, and Depletion

Chapter 10 — Certain Business Deductions and Losses

Chapter 11 — Itemized Deductions

Chapter 12 — Deductions for Certain Investment Expenses and Losses

Part 4 Alternative Minimum Tax and Tax Credits

Chapter 13 — The Alternative Minimum Tax and Tax Credits

Part 5 Property Transactions

Chapter 14 — Property Transactions: Basis Determination and Recognition of Gain or Loss

Chapter 15 — Nontaxable Exchanges

Chapter 16 — Property Transactions: Capital Gains and Losses

Chapter 17 — Property Transactions: Dispositions of Trade or Business Property

Part 6 Employee Compensation and Retirement Plans

Chapter 18 — Employee Compensation and Retirement Plans

Part 7 Corporate Taxation

Chapter 19 — Corporations: Formation and Operation

Chapter 20 — Corporate Distributions, Redemptions and Liquidations

Chapter 21 — Taxation of Corporate Accumulations

Part 8 Flow-Through Entities

Chapter 22 — Taxation of Partnerships and Partners

Chapter 23 — S Corporations

Part 9 Family Tax Planning

Chapter 24 — The Federal Transfer Taxes

Chapter 25 — Income Taxation of Estates and Trusts

Chapter 26 — Family Tax Planning

Appendices

Appendix A — Tax Rate Schedules and Tables

Appendix B — Tax Forms

Appendix C — Modified ACRS Tables

Appendix D — Continuous Individual Tax Return Problems and Three Comprehensive
Individual Tax Return Problems for 2020

Appendix E — Glossary of Tax Terms

Index

Quick Reference

• Trusted annual updates throughout the entire Pratt-Kulsrud 2022 Tax Series reflect the latest, most important developments from the previous year.

Use the 2022 Tax Series with complete confidence that your course incorporates the most timely tax and business developments, including all updates to Internal Revenue laws, legislation, judicial decisions and administrative pronouncements by the Treasury Department and the Internal Revenue Service.

• New to This Edition Electronic Homework!

Selected end of chapter problems are now available in e-format. Benefits include:

• • All problems are associated with in-text learning objectives making it easy to assess students’ knowledge of specific content
  • Problems are automatically graded and scores can be integrated into an LMS gradebook

If you plan on using the electronic homework, please contact pkhelp@van-griner.com. A representative will be in contact with you about setting up your access to the online homework and integration into your LMS. If you plan on an LMS integration, reach out to your LMS contact as soon as possible about the submission process for external integrations at your school. We need to allow for ample time for this process. We will work directly with your LMS team and will provide you with detailed instructions that you will be able to share with your students and instructors.

• Coverage reflects the continuing impact of recent acts.

• The latest legislative updates affecting individual taxpayers keep your course up to date.

• Learning objectives at the beginning of all chapters focus attention on key material.

This helpful summary of key points begins each chapter to draw student attention to the most critical topics in the chapter and summarize what students should understand after completing the chapter. Margin notes further focus attention on where the Objectives appear in the text presentation.

• TaxAct Desktop Software download accompanies each new text.

One of today’s most popular tax preparation software choices,TaxAct is available with each new copy of this edition and provides an ideal tool for guiding users through the tax return process with a dependable, user-friendly approach.

• Proven problem materials gauge comprehension.

A variety of assessment tools at the end of each chapter check student understanding. These assessment tools include discussion questions and computational problems as well as tax-return problems that highlight topics discussed in the chapter.

• Quick References for Form 1040 Topics

​We also have a tool that both instructors and students should like, our Quick References for Form 1040. Immediately preceding the inside back cover, you will find a Form 1040. For each line, we have inserted a page number in the text where the item for this line is discussed. These references should help instructors find where we cover various topics and help students understand how a particular topic translates to the form in addition to aiding them when preparing tax return problems.

• “You make the call” Features help refine sound reasoning and decision making skills.

Challenging, hypothetical situations throughout this edition encourage students to practice strong reasoning and discerning judgment as they resolve practical tax examples.

• “Check your knowledge” Questions ensure student grasp critical topics.

This wealth of objective and short-answer review questions throughout this addition review the book’s key concepts to confirm that students thoroughly understand the most important aspects of each tax topic.

NEW

• New to This Edition Electronic Homework!

Selected end of chapter problems are now available in e-format. Benefits include:

• • All problems are associated with in-text learning objectives making it easy to assess students’ knowledge of specific content
  • Problems are automatically graded and scores can be integrated into an LMS gradebook

If you plan on using the electronic homework, please contact pkhelp@van-griner.com. A representative will be in contact with you about setting up your access to the online homework and integration into your LMS. If you plan on an LMS integration, reach out to your LMS contact as soon as possible about the submission process for external integrations at your school. We need to allow for ample time for this process. We will work directly with your LMS team and will provide you with detailed instructions that you will be able to share with your students and instructors.

• The latest updates throughout this edition reflect today’s most recent tax laws and changes. Up-to-the-minute updates through the text’s presentation and supplements demonstrate the most recent changes in tax legislation and indexing of statutory amounts at the time of publication, making this revision as accurate and current as possible.

• New and revised problems throughout the text and in the test questions reflect today’s latest tax challenges. At least 20-30 percent of the problem materials in the text and test items throughout this edition’s Test Bank are new or significantly revised to reflect the latest tax developments.

• Revised learning objectives offer more specific, tangible learning outcomes. Throughout this edition, stronger, revised Learning Objectives more effectively reflect more specific, tangible, and testable learning outcomes to ensure your students’ success.
• Further emphasis on tax planning guides students in evaluating tax options. This edition provides additional focus on tax planning to better equip students in analyzing financial situations and plans from a tax perspective.

Instructor Supplements

• Solutions Manual. Solutions to end-of-chapter discussion questions and computational problems are included in this manual. Specific pages and examples from the text are referenced, as are supporting statutory and administrative authorities, when appropriate.

• Instructor’s Resource Guide and Test Bank. This guide includes solutions to comprehensive and tax research problems and tax-return problems, along with a test bank of more than 750 objective questions (true-false and multiple choice), whose answers reference specific pages and examples in the text.

• PowerPoint® Slides. Designed for classroom use, there are slides for each chapter’s principle topics, as well as slides containing solutions for many problems.

• Lecture Outlines. These outlines help instructors organize class discussions for greatest efficacy.

• Legislative Updates. Book-specific updates, tax law changes, and inflation adjustments are posted on a regular basis to the Pratt & Kulsrud website: www.prattkulsrud.com.

Instructor’s Resources

• Instructor ancillaries. Including the Solutions Manual, Instructor’s Resource Guide and Test Bank, and Lecture Outlines — are provided online at our website. This gives instructors the ultimate tool for preparing and customizing lectures, presentations, and exams. To access the test bank files see the Test Bank Instructor Guide.

• Cognero is an easy-to-use test-creation online assessment system that allows you to create tests from the existing test banks. Instructors are able to edit, add, or remove from the test banks to customize them to fit their needs.

• Electronic Homework

Student Supplements

• Study Guide. A Study Guide to Accompany Federal Taxation 2022 is available online for purchase. Written by the authors, the Study Guide provides in-depth chapter reviews, study exercises, and true-false/multiple-choice questions. These materials may be used in students’ initial study of the chapter content, and also in their review. The Study Guide is only available online.

• TaxAct desktop software. Purchase of this book includes access for a limited time to the educational version of TaxAct Software.

• Electronic Homework