Fundamentals of Taxation for Individuals and Business Entities

DR. GREGORY CARNES serves as Dean of the Sanders College of Business and Technology and Raburn Eminent Scholar of Accounting at the University of North Alabama. Dr. Carnes is well known nationally as an academic leader, having served on the boards of numerous academic organizations. Dr. Carnes has authored tax material for CPA Review courses for more than 20 years and has delivered tax training for national accounting firms and approximately 20 accounting state societies. He has published approximately 30 articles in leading academic and professional journals. SUZANNE YOUNGBERG joined the faculty at Northern Illinois University as a full-time member in 2000 and is currently teaching in the accounting graduate and undergraduate programs. Prior to NIU, she worked for five years in the tax department of a medium-sized public accounting firm and then maintained her own tax practice for 30 years specializing in individual and small business compliance and strategic tax planning. Suzanne received her Bachelor of Science in Accountancy from NIU and her Master of Science in Taxation from DePaul University.

Part I Introduction to Income Taxation 1 The Professional Practice of Taxation 1-1

2 Fundamentals of the Federal Income Tax System 2-1

3 Tax Authority, Research, Compliance Rules, and Professional Responsibilities 3-1

4 Dependents and Filing Status 4-1

Part II Income

5 Framework for Income Recognition 5-1

6 Income from Personal Activities 6-1

7 Income from Services 7-1

Part II (Ch. 5–7): Comprehensive Tax Return Problem

Part III Deductions

8 Framework for Deductions 8-1

9 Deductions for AGI and Itemized Deductions 9-1

10 Business Expenses 10-1

11 Limitations on Business Losses and Expenses 11-1

Part III (Ch. 8–11): Comprehensive Tax Return Problem

Part IV Taxation of Property Transactions

12 Taxation of Investment Income 12-1

13 Cost Recovery of Property 13-1

14 Taxation of Assets Used in a Trade or Business 14-1

15 Property Transactions: Nonrecognition of Gains and Losses 15-1

Part IV (Ch. 12–15): Comprehensive Tax Return Problem

Part V Other Individual Topics

16 Personal Tax Credits 16-1

17 Alternative Minimum Tax and Other Taxes 17-1

Parts II–V (Ch. 4–17): Comprehensive Tax Return Problem

Part VI CPA Evolution: Core—Tax

18 Business Entity Topics: CPA Exam Core—Taxation and Regulation 18-1

Part VI (Ch. 18): Comprehensive Tax Return Problem

APPENDIX A Tax Formula Items A-1

APPENDIX B Tax Forms B-1

GLOSSARY G-1

INDEX I-1