McGraw-Hill's Taxation of Business Entities 2024

Table of Contents and Preface Cover Page Title Page Copyright Page Dedications About the Authors In Memoriam Teaching the Code in Context A Modern Approach for Today’s Student A Storyline Approach that Resonates with Students The Pedagogy Your Students Need to Put the Code in Context Practice Makes Perfect with a Wide Variety of Assignment Material Connect Digital Learning Assets to Improve Student Outcomes Supplements for Instructors Four Volumes to Fit Four Course Approaches Acknowledgments Changes in Taxation of Individuals and Business Entities, 2024 Edition As We Go to Press Table of Contents Chapter 1: Business Income, Deductions, and Accounting Methods Chapter 1: Introduction Business Gross Income Gross Receipts Test for Determining Small Businesses Business Deductions Ordinary and Necessary Reasonable in Amount Limitations on Business Deductions Expenditures against Public Policy Political Contributions and Lobbying Costs Capital Expenditures Expenses Associated with the Production of Tax-Exempt Income Personal Expenditures Mixed-Motive Expenditures Limitation on Business Interest Deductions Losses on Dispositions of Business Property Business Casualty Losses Accounting Periods Accounting Methods Financial and Tax Accounting Methods Overall Accounting Method Accrual Income Taxation of Advance Payments of Income (Unearned Income) Inventories Accrual Deductions Comparison of Accrual and Cash Methods Adopting an Accounting Method Changing Accounting Methods Conclusion Chapter 1: Summary Chapter 1: Key Terms Chapter 1: Discussion Questions Chapter 1: Problems Chapter 1: Comprehensive Problems Chapter 2: Property Acquisition and Cost Recovery Chapter 2: Introduction Cost Recovery and Tax Basis for Cost Recovery Basis for Cost Recovery Depreciation Personal Property Depreciation Real Property Special Rules Relating to Cost Recovery Depreciation for the Alternative Minimum Tax Depreciation Summary Amortization Section 197 Intangibles Organizational Expenditures and Start-up Costs Research and Experimentation Expenditures Patents and Copyrights Amortizable Intangible Asset Summary Depletion Conclusion Appendix A: MACRS Tables Chapter 2: Summary Chapter 2: Key Terms Chapter 2: Discussion Questions Chapter 2: Problems Chapter 2: Comprehensive Problems Chapter 3: Property Dispositions Chapter 3: Introduction Dispositions Amount Realized Determination of Adjusted Basis Realized Gain or Loss on Disposition Recognized Gain or Loss on Disposition Character of Gain or Loss Ordinary Assets Capital Assets Section 1231 Assets Depreciation Recapture Section 1245 Property Section 1250 Depreciation Recapture for Real Property Other Provisions Affecting the Rate at Which Gains Are Taxed Unrecaptured §1250 Gain for Individuals Characterizing Gains on the Sale of Depreciable Property to Related Persons Calculating Net §1231 Gains or Losses Section 1231 Look-Back Rule Gain or Loss Summary Tax-Deferred Transactions Like-Kind Exchanges Involuntary Conversions Installment Sales Gains Ineligible for Installment Reporting Other Tax-Deferred Provisions Related-Person Loss Disallowance Rules Conclusion Chapter 3: Summary Chapter 3: Key Terms Chapter 3: Discussion Questions Chapter 3: Problems Chapter 3: Comprehensive Problems Chapter 4: Business Entities Overview Chapter 4: Introduction Business Entity Legal Classification and Nontax Characteristics Legal Classification Nontax Characteristics Business Entity Tax Classification Business Entity Tax Characteristics Taxation of Business Entity Income Other Tax Characteristics Converting to Other Business Entity Types Conclusion Chapter 4: Summary Chapter 4: Key Terms Chapter 4: Discussion Questions Chapter 4: Problems Chapter 4: Comprehensive Problems Chapter 5: Corporate Operations Chapter 5: Introduction Corporate Taxable Income Formula Accounting Periods and Methods Computing Corporate Taxable Income Book–Tax Differences Corporate-Specific Deductions and Associated Book–Tax Differences Taxable Income Summary Corporate Income Tax Liability Compliance Corporate Tax Return Due Dates and Estimated Taxes Conclusion Chapter 5: Summary Chapter 5: Key Terms Chapter 5: Discussion Questions Chapter 5: Problems Chapter 5: Comprehensive Problems Chapter 6: Accounting for Income Taxes Chapter 6: Introduction Accounting for Income Taxes and the Income Tax Provision Process Why Is Accounting for Income Taxes So Complex? Objectives of ASC 740 The Income Tax Provision Process Calculating a Company's Income Tax Provision Step 1: Identify All Permanent and Temporary Differences and Tax Carryover Amounts and Calculate the Current Income Tax Provision (ASC 740 Objective 1) Step 2: Determine the Ending Balances in the Balance Sheet Deferred Tax Asset and Liability Accounts (ASC 740 Objective 2) Step 3: Calculate the Deferred Income Tax Provision and the Total Income Tax Provision Determining Whether a Valuation Allowance Is Needed Step 4: Evaluate the Need for a Valuation Allowance for Gross Deferred Tax Assets Determining the Need for a Valuation Allowance Accounting for Uncertainty in Income Tax Positions Step 5: Evaluate the Need for an Uncertain Tax Benefit Reserve Application of ASC Topic 740 to Uncertain Tax Positions Subsequent Events Interest and Penalties Disclosures of Unrecognized Tax Benefits Schedule UTP (Uncertain Tax Position) Statement Financial Statement Disclosure and Computing a Corporation’s Effective Tax Rate Balance Sheet Classification Income Tax Footnote Disclosure Interim Period Effective Tax Rates Conclusion Chapter 6: Summary Chapter 6: Key Terms Chapter 6: Discussion Questions Chapter 6: Problems Chapter 6: Comprehensive Problems Chapter 7: Corporate Taxation: Nonliquidating Distributions Chapter 7: Introduction Taxation of Property Distributions Determining the Dividend Amount from Earnings and Profits Overview Dividends Defined Computing Earnings and Profits Ordering of E&P Distributions Distributions of Noncash Property to Shareholders Stock Distributions Tax Consequences to Shareholders Receiving a Stock Distribution Stock Redemptions The Form of a Stock Redemption Redemptions That Reduce a Shareholder’s Ownership Interest Tax Consequences to the Distributing Corporation Partial Liquidations Conclusion Chapter 7: Summary Chapter 7: Key Terms Chapter 7: Discussion Questions Chapter 7: Problems Chapter 7: Comprehensive Problems Chapter 8: Corporate Formation, Reorganization, and Liquidation Chapter 8: Introduction Review of the Taxation of Property Dispositions Tax-Deferred Transfers of Property to a Corporation Transactions Subject to Tax Deferral Meeting the Section 351 Tax Deferral Requirements Tax Consequences When a Shareholder Receives No Boot Tax Consequences When a Shareholder Receives Boot Assumption of Shareholder Liabilities by the Corporation Tax Consequences to the Transferee Corporation Other Issues Related to Incorporating an Ongoing Business Contributions to Capital Section 1244 Stock Taxable and Tax-Deferred Corporate Acquisitions The Acquisition Tax Model Tax Consequences to a Corporate Acquisition Taxable Acquisitions Tax-Deferred Acquisitions Judicial Doctrines That Underlie All Tax-Deferred Reorganizations Type A Asset Acquisitions Type B Stock-for-Stock Reorganizations Complete Liquidation of a Corporation Tax Consequences to the Shareholders in a Complete Liquidation Tax Consequences to the Liquidating Corporation in a Complete Liquidation Conclusion Chapter 8: Summary Chapter 8: Key Terms Chapter 8: Discussion Questions Chapter 8: Problems Chapter 8: Comprehensive Problems Chapter 9: Forming and Operating Partnerships Chapter 9: Introduction Flow-Through Entities Overview Aggregate and Entity Concepts Partnership Formations and Acquisitions of Partnership Interests Acquiring Partnership Interests When Partnerships Are Formed Acquisitions of Partnership Interests after Formation Partnership Accounting: Tax Elections, Accounting Periods, and Accounting Methods Tax Elections Accounting Periods Accounting Methods Reporting the Results of Partnership Operations Ordinary Business Income (Loss) and Separately Stated Items Net Investment Income Tax Allocating Partners’ Shares of Income and Loss Partnership Compliance Issues Adjusting a Partner's Tax Basis in Partnership Interest Cash Distributions in Operating Partnerships Loss Limitations Tax-Basis Limitation At-Risk Amount Limitation Passive Activity Loss Limitation Excess Business Loss Limitation Conclusion Chapter 9: Summary Chapter 9: Key Terms Chapter 9: Discussion Questions Chapter 9: Problems Chapter 9: Comprehensive Problems Chapter 10: Dispositions of Partnership Interests and Partnership Distributions Chapter 10: Introduction Basics of Sales of Partnership Interests Seller Issues Buyer and Partnership Issues Basics of Partnership Distributions Operating Distributions Liquidating Distributions Disproportionate Distributions Special Basis Adjustments Special Basis Adjustments for Dispositions Special Basis Adjustments for Distributions Conclusion Chapter 10: Summary Chapter 10: Key Terms Chapter 10: Discussion Questions Chapter 10: Problems Chapter 10: Comprehensive Problems Chapter 11: S Corporations Chapter 11: Introduction S Corporation Elections Formations S Corporation Qualification Requirements S Corporation Election S Corporation Terminations Voluntary Terminations Involuntary Terminations Short Tax Years S Corporation Reelections Operating Issues Accounting Methods and Periods Income and Loss Allocations Separately Stated Items Shareholder's Basis Loss Limitations Self-Employment Income Net Investment Income Tax Fringe Benefits Distributions Operating Distributions Liquidating Distributions S Corporation Taxes and Filing Requirements Built-in Gains Tax Excess Net Passive Income Tax LIFO Recapture Tax Estimated Taxes Filing Requirements Comparing C and S Corporations and Partnerships Conclusion Chapter 11: Summary Chapter 11: Key Terms Chapter 11: Discussion Questions Chapter 11: Problems Chapter 11: Comprehensive Problems Chapter 12: State and Local Taxes Chapter 12: Introduction State and Local Taxes Sales and Use Taxes Sales Tax Nexus Sales Tax Liability Income Taxes Income Tax Nexus Entities Included on Income Tax Return State Taxable Income Dividing State Tax Base among States State Income Tax Liability Nonincome-Based Taxes Conclusion Chapter 12: Summary Chapter 12: Key Terms Chapter 12: Discussion Questions Chapter 12: Problems Chapter 12: Comprehensive Problems Chapter 13: The U.S. Taxation of Multinational Transactions Chapter 13: Introduction The U.S. Framework for Taxing Multinational Transactions U.S. Taxation of a Nonresident Definition of a Resident for U.S. Tax Purposes Overview of the U.S. Foreign Tax Credit System U.S. Source Rules for Gross Income and Deductions Source-of-Income Rules Source-of-Deduction Rules Operating Abroad through a Foreign Corporation Treaties Foreign Tax Credits FTC Limitation Categories of Taxable Income Creditable Foreign Taxes Planning for International Operations Check-the-Box Hybrid Entities U.S. Anti-Deferral Rules Definition of a Controlled Foreign Corporation Definition of Subpart F Income Planning to Avoid Subpart F Income Global Intangible Low-Taxed Income Base Erosion and Profit-Shifting Initiatives around the World Conclusion Chapter 13: Summary Chapter 13: Key Terms Chapter 13: Discussion Questions Chapter 13: Problems Chapter 13: Comprehensive Problems Chapter 14: Transfer Taxes and Wealth Planning Chapter 14: Introduction Introduction to Federal Transfer Taxes Beginnings Common Features of Integrated Transfer Taxes The Federal Gift Tax Transfers Subject to Gift Tax Taxable Gifts Computation of the Gift Tax The Federal Estate Tax The Gross Estate The Taxable Estate Computation of the Estate Tax Wealth Planning Concepts The Generation-Skipping Tax Income Tax Considerations Transfer Tax Planning Techniques Integrated Wealth Plans Conclusion Chapter 14: Summary Chapter 14: Key Terms Chapter 14: Discussion Questions Chapter 14: Problems Chapter 14: Comprehensive Problems Appendix A: Tax Forms Appendix A: Tax Forms Appendix B: Tax Terms Glossary Appendix B: Tax Terms Glossary Appendix C: Tax Rates Tax Rates Code Index Code Index Subject Index Subject Index Additional Student Resources Additional Student Resources Accessibility Content: Text Alternatives for Images A Page Shows the Features Text Alternative (FM) A Page Shows the Features Text Alternative (FM) A Form 4562 Shows Page 1 of Depreciation and Amortization Text Alternative (FM) Exhibit 1-6 Text Alternative (Chapter 1) Exhibit 2-12 Text Alternative (Chapter 2) Exhibit 2-13 Text Alternative (Chapter 2) Exhibit 2-15 Text Alternative (Chapter 2) Exhibit 3-5 Text Alternative (Chapter 3) Exhibit 3-6 Text Alternative (Chapter 3) Exhibit 3-7 Text Alternative (Chapter 3) Exhibit 3-8 Text Alternative (Chapter 3) Exhibit 3-10 Text Alternative (Chapter 3) Exhibit 3-11 Text Alternative (Chapter 3) Exhibit 3-12 Text Alternative (Chapter 3) Exhibit 3-14 Text Alternative (Chapter 3) Exhibit 4-2 Text Alternative (Chapter 4) Exhibit 5-9 Text Alternative (Chapter 5) Exhibit 5-10 Text Alternative (Chapter 5) Exhibit 7-2 Text Alternative (Chapter 7) Exhibit 8-8 Text Alternative (Chapter 8) Exhibit 8-9 Text Alternative (Chapter 8) Exhibit 8-10 Text Alternative (Chapter 8) Exhibit 8-11 Text Alternative (Chapter 8) Exhibit 9-4 Text Alternative (Chapter 9) Exhibit 9-5 Text Alternative (Chapter 9) Exhibit 9-8 (PART I) Text Alternative (Chapter 9) Exhibit 9-8 (PART II) Text Alternative (Chapter 9) Exhibit 9-8 (PART III) Text Alternative (Chapter 9) Exhibit 9-10 Text Alternative (Chapter 9) Exhibit 10-2 Text Alternative (Chapter 10) Exhibit 11-3 PART I Text Alternative (Chapter 11) Exhibit 11-3 PART II Text Alternative (Chapter 11) Exhibit 11-3 PART III Text Alternative (Chapter 11) Exhibit 12-2 Text Alternative (Chapter 12) Exhibit 12-3 Text Alternative (Chapter 12) Exhibit 13-1 Text Alternative (Chapter 13) Exhibit 13-1 (continued) Text Alternative (Chapter 13) Exhibit 13-1 (continued) Text Alternative (Chapter 13) Exhibit 13-4 Text Alternative (Chapter 13) Exhibit 13-5 Text Alternative (Chapter 13) Exhibit 14-5 Text Alternative (Chapter 14) Exhibit 14-8 Text Alternative (Chapter 14)