SOLUTIONS MANUAL WITH TEST BANK INCOME TAX FUNDAMENTALS 2013 EDITION Gerald E. Whittenburg Gerald E. Whittenburg San Diego State University Martha Altus-Buller San Diego, California San Diego, California Steve Gill San Diego State University ________________________________________________________________________________ Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States
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SOLUTIONS MANUAL WITH TEST BANK
INCOME TAX FUNDAMENTALS
2013 EDITION
Gerald E. Whittenburg Gerald E. Whittenburg San Diego State University
Martha Altus-Buller San Diego, California San Diego, California
Steve Gill San Diego State University
________________________________________________________________________________ Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States
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CONTENTS
PREFACE ............................................................................................................................................................ iv CHAPTER OUTLINES AND SUGGESTED MINIMUM ASSIGNMENTS ....................................................... 1 SOLUTIONS FOR QUESTIONS AND PROBLEMS ............................................................................................ 25 Chapter 1: The Individual Income Tax Return ..................................................................................................... 27
Chapter 2: Gross Income and Exclusions ............................................................................................................. 37
Chapter 3: Business Income and Expenses, Part I ................................................................................................ 51
Chapter 4: Business Income and Expenses, Part II ............................................................................................... 81
Chapter 5: Itemized Deductions and Other Incentives ......................................................................................... 99
Chapter 6: Credits and Special Taxes ................................................................................................................... 119
Chapter 7: Accounting Periods and Methods and Depreciation ........................................................................... 145
Chapter 8: Capital Gains and Losses .................................................................................................................... 163
Chapter 9: Withholding, Estimated Payments, and Payroll Taxes ....................................................................... 195
Chapter 11: The Corporate Income Tax ................................................................................................................. 233
Chapter 12: Tax Administration and Tax Planning ................................................................................................ 247 SOLUTIONS FOR ADDITIONAL COMPREHENSIVE TAX RETURN PROBLEMS .................................... 249
Chapter 1: The Individual Income Tax Return ..................................................................................................... 283
Chapter 2: Gross Income and Exclusions ............................................................................................................. 311
Chapter 3: Business Income and Expenses, Part I ................................................................................................ 341
Chapter 4: Business Income and Expenses, Part II ............................................................................................... 375
Chapter 5: Itemized Deductions and Other Incentives ......................................................................................... 401
Chapter 6: Credits and Special Taxes ................................................................................................................... 433
Chapter 7: Accounting Periods and Methods and Depreciation ........................................................................... 459
Chapter 8: Capital Gains and Losses .................................................................................................................... 485
Chapter 9: Withholding, Estimated Payments, and Payroll Taxes ....................................................................... 511
Chapter 11: The Corporate Income Tax ................................................................................................................. 551
Chapter 12: Tax Administration and Tax Planning ................................................................................................ 573
TEST BANK ................................................................................................................................................................ 283
PREFACE
This manual contains the solutions to the multiple choice questions, writing assignments, problems, and comprehensive problems in the text and also provides a source of exam questions for your class. Some of the test bank questions require additional tables or schedules. The tax calculations and phase-outs have become so complex that professors may prefer open book tests in some circumstances. If you wish to make the manual available for student review, the pages in the manual are perforated so that test materials may be removed from the manual to retain their integrity.
The test bank is also available for use on personal computers through ExamView®. If you would like a copy of this computerized test generator, please contact your Cengage Learning representative.
The manual also contains a brief topical outline for each chapter designed to assist you in presenting the course material. Suggested minimum case and problem assignments, selected to provide a representative sample of the text’s problem material, follow each chapter outline. Gerald E. Whittenburg Martha Altus-Buller Steve Gill
A. Learning Objectives and OverviewB. History and Objectives of the Tax System
1. Social objectives2. Economic objectives
C. Reporting and Taxable Entities1. The individual2. The corporation3. The partnership
D. The Tax Formula for Individuals1. Gross income2. Deductions for adjusted gross income3. Adjusted gross income4. Standard deduction or itemized deductions5. Exemptions6. Taxable income7. Gross tax liability
E. Who Must File1. Who must file (see Figures 1.1, 1.2 and 1.3)
F. Filing Status and Tax Computation1. Filing Status
- Single taxpayers- Married filing jointly- Married filing separately- Head of household- Surviving spouse/Qualifying widow(er)s
2. Tax Computation3. Qualifying dividends
G. Personal and Dependency Exemptions1. Personal exemptions2. Dependency exemptions
- Relationship test for qualifying children- Domicile test- Age test- Joint return test- Citizenship test- Self-support test
3. Dependency exemptions for qualifying relatives- Relationship or member of household test- Gross income test- Support test- Joint return test- Citizenship test
H. The Standard Deduction1. Amounts2. Additional amounts for old age and blindness3. Individuals not eligible for the standard deduction4. Special limitations for dependents
I. A Brief Overview of Capital Gains and Losses1. Adjusted basis2. Amount realized3. Ordinary versus capital gains and losses
J. Tax and the Internet1. IRS Web site
- Forms & Pubs2. Other useful tax information sites
K. Electronic Filing (e-Filing)1. Individual tax preparation software2. Tax professionals
SUGGESTED MINIMUM ASSIGNMENT:
Problems 2, 4, 7, 9, 10, 12, 13, 15, and 16Optional: Writing assignmentComprehensive problems 1 and 2A or 2BOptional: Cumulative Software Problem