Taxation of Business Entities, with eBook Access Code

An innovative approach to understanding the federal income tax laws for business entities and developing tax-efficient strategies. Presents the big picture to understanding the tax laws with a practice-based approach so students can develop critical thinking and problem-solving skills that prepare them to make effective decisions. Taxation of Business Entities, 2027 Edition introduces a comprehensive foundation for the income tax system, so students can understand why a law exists and how to apply the law to practical tax problems encountered by businesses. Professional skill-building exercises develop critical thinking and communication skills and the ability to identify and address ethical dilemmas, preparing students to be successful tax professionals. WILEY ADVANTAGE Incorporates Tax Planning Tips that focus on planning opportunities for corporations, S corporations, partnerships, and LLCs throughout, and a chapter on the choice of business entity Includes specialized tax topics such as accounting for income taxes on financial statements, income taxation of trusts and estates, estate and gift taxation, state and local taxation, multinational taxation, and tax-exempt organizations Practice opportunities are presented immediately following each learning objective, because students comprehend best by applying what they just learned Creates a realistic environment to teach students how to apply their knowledge that will transfer to job-ready skills with Tax Form and Tax Return Problems that include actual tax source documents Develops tax planning skills through Tax Planning Problems, Spotlight on the Tax Law, and Excel exercises that stimulate critical analysis and evaluation Features applications and problems that focus on tax-planning skills, analytical skills, research skills, communication skills, and the ability to identify and address ethical dilemmas Task-Based Simulation Problems similar to those used on the CPA Exam include realistic source documents such as Schedule K-1s, financial statements, invoices, and legal agreements that students use to solve problems Prepares students for the advanced tax knowledge and skills that are tested on the TCP (Tax Compliance and Planning) CPA exam Includes an extensive collection of additional resources, such as lesson plans, presentation slides, a Solutions Manual for instructors and practice quizzes, downloadable forms, test bank, and spreadsheets for students AN INTERACTIVE, MULTIMEDIA LEARNING EXPERIENCE This textbook includes access to an interactive, multimedia e-text. Icons throughout the print book signal corresponding digital content in the e-text. Taxation of Business Entities integrates abundant video content developed by the authors to complement the text and engage readers more deeply. Content Review Videos provide a detailed review of each learning objective in each chapter and help students learn key concepts and an understanding of tax laws, the big picture, and the Why behind it. Provide confidence-building opportunities with a wide range of Practice Problems and author-created Solution Walkthrough Videos that give step-by-step instruction on how to complete problems like those in the text. Downloadable Files appear throughout the E-Book, enabling students to see and work with tax forms. Concept Check Questions at the end of each learning objective provide immediate feedback, helping readers monitor their understanding and mastery of the material.

DEDICATIONS III BRIEF CONTENTS V LEARNING THE BIG PICTURE OF TAX TO BE A VALUED TAX PROFESSIONAL VI WHAT ARE OUR STORIES? VII WHAT MAKES OUR APPROACH TO LEARNING TAX DISTINCTIVE? IX ASSESSMENT XIII CONNECTING TO THE PROFESSION XV AN INTERACTIVE, MULTIMEDIA LEARNING EXPERIENCE XVII PREPARING FOR THE CPA EXAM XVIII FOR INSTRUCTORS XIX ACKNOWLEDGMENTS XX TABLE OF CONTENTS XXI Part I Introduction to Business Entities 1 Basics of Business Entity Taxation 1-1 1.1 Basics of Business Entity Taxation 1-6 1.2 Tax Compliance for Business Entities 1-10 1.3 Review of Fundamentals of Property Transactions 1-19 1.4 Review of Section 1231 Assets 1-37 1.5 Review of Qualified Business Income Deduction 1-58 2 Taxation of Business Entities: Strategies and Planning 2-1 2.1 The Basics of Tax Planning 2-3 2.2 Tax Avoidance vs. Tax Evasion 2-12 2.3 Tax Rules vs. GAAP 2-17 2.4 Tax Professional Responsibilities 2-19 2.5 Professional Taxation as a Career 2-24 Part II Taxation of Corporations 3 Fundamentals of Corporate Taxation 3-1 3.1 Taxation of Corporate Formations 3-5 3.2 Taxation of Costs Incident to Formation 3-17 3.3 Corporate Taxable Income 3-22 3.4 Other Corporate Tax Issues 3-37 3.5 Penalty Taxes 3-55 3.6 Business Tax Credits 3-64 4 Corporate Taxation: Distributions, Redemptions, and Liquidations 4-1 4.1 Distributions Taxed as Dividends 4-4 4.2 Earnings & Profits 4-12 4.3 Property Distributions 4-20 4.4 Stock Redemptions 4-26 4.5 Corporate Liquidations 4-42 5 Corporate Taxation: Related Corporations and Reorganizations 5-1 5.1 Controlled Groups 5-4 5.2 Affiliated Groups and Consolidated Returns 5-14 5.3 Corporate Reorganizations 5-30 5.4 Preservation of Tax Attributes 5-44 Part II (Chapters 3–5): Comprehensive Tax Return Problems 5-58 Part III Taxation of Flow-Through Entities 6 Partnership Taxation: Formation, Basis, and Income 6-1 6 Partnership Taxation: Formation, Basis, and Income 6-1 6.1 Definitions Related to Partnerships 6-4 6.2 Taxation of Partnership Formations 6-8 6.3 Impact of Partnership Debt on Partner's Basis in Partnership Interest 6-14 6.4 Taxation of Partnership Income and Guaranteed Payments 6-19 6.5 Use of Partnership Losses 6-32 6.6 Permitted Tax Years for Partnerships 6-39 6.7 Related-Party Rules 6-45 Disallowance of Related-Party Losses 6-46 7 Partnership Taxation: Distributions, Sales, and Advanced Topics 7-1 7.1 Built-In Gains and Losses 7-5 7.2 Distributions from a Partnership 7-13 7.3 Retirement Distributions 7-24 7.4 Sale of a Partnership Interest 7-30 7.5 Advanced Topic (Drilling Down)—Disproportionate Distributions 7-38 7.6 Advanced Topic (Drilling Down)—Optional Adjustment to Basis of Partnership Assets (Section 754 Elections) 7-44 7.7 Advanced Topic (Drilling Down)—Distributions of Built-In Gain Property 7-57 Part III (Chapters 6–7): Comprehensive Tax Return Problem 7-70 8 Taxation of S Corporations 8-1 8.1 Eligibility Rules and Shareholder Requirements 8-4 8.2 Election Requirements and Terminations 8-11 8.3 Taxation of S Corporation Income 8-18 8.4 Shareholder's Basis in S Corporation Stock and Loss Limitations 8-26 8.5 Taxation of S Corporation Distributions 8-33 8.6 S Corporation Taxes 8-45 Built-In Gains Tax 8-45 Part III (Chapter 8): Comprehensive Tax Return Problem 8-68 Part IV Choice of Business Entity 9 Choice of Business Entity 9-1 9.1 Business Structures 9-5 9.2 Characteristics of Tax Entities 9-13 9.3 Comparison of Partnerships/Limited Liability Companies and S Corporations 9-28 9.4 Dispositions of Ownership Interests and Conversions to Other Entity Types 9-35 Part V Special Topics 10 Taxes on the Financial Statements 10-1 10.1 Basics of Accounting for Income Taxes 10-5 10.2 Determining the Income Tax Provision 10-16 10.3 Tax Disclosures in the Financial Statements 10-42 10.4 Disclosures in the Tax Return 10-47 10.5 Special Issues 10-50 Part V (Chapter 10): Comprehensive Companion Income Tax Provision Problem 10-61 11 Income Taxation of Trusts and Estates 11-1 11.1 Overview of Income Taxation of Trusts and Estates 11-5 11.2 Fiduciary Accounting 11-11 11.3 Taxable Income for Trusts and Estates 11-21 11.4 Income Distribution Deduction 11-36 11.5 Taxation of Beneficiaries 11-42 12 Gift and Estate Taxes 12-1 12.1 Unified Transfer Tax 12-4 12.2 Transfers Subject to the Gift Tax 12-8 12.3 Gift Tax Formula 12-18 12.4 Estate Tax—General Rules 12-26 12.5 Inclusions in the Gross Estate 12-33 12.6 Deductions from the Gross Estate 12-40 12.7 Estate Tax Formula 12-45 Estate Tax Formula 12-45 13 Taxation of Multinational Transactions 13-1 13.1 General Rules for International Taxation 13-4 13.2 Sourcing of Income and Expenses 13-11 Sourcing of Income 13-11 13.3 U.S. Taxpayers with Outbound Investment through Corporations 13-21 13.4 Inbound Taxation on Foreign Persons 13-31 14 State and Local Taxation 14-1 14.1 Types of State and Local Taxes (SALT) 14-3 14.2 Jurisdiction to Tax 14-8 14.3 State Income Tax Computation 14-16 14.4 Filing Methods and Other Topics 14-28 15 Tax-Exempt Organizations 15-1 15.1 Types of Tax-Exempt Organizations 15-3 15.2 Filing Requirements 15-7 15.3 Taxation of Tax-Exempt Entities 15-14 15.4 Unrelated Business Income (UBI) 15-23 16 Tax Research and Professional Issues 16-1 16.1 Sources of Tax Authority 16-3 16.2 Locating and Evaluating Authority 16-15 16.3 Tax Preparer Penalties 16-18 16.4 Tax Practice and Procedure 16-20 APPENDIX A Tax Formula Items A-1 APPENDIX B Tax Forms B-1 APPENDIX C Personal Financial Planning (Available Online) GLOSSARY G-1 SUBJECT INDEX I-1