Prentice Hall's Federal Taxation 2002: Corporations, Partnerships, Estates, and Trusts

Hardcover

ISBN 10: 013055071X ISBN 13: 9780130550712

Publisher: Prentice Hall, 2001

A practical approach to federal taxation of corporations, partnerships, estates, and trusts, this volume is appropriate for a one-semester undergraduate or graduate-level second taxation course in accounting.Written by nationally recognized tax educators, this acclaimed three-volume series provides a hands-on, definitive guide to federal income taxation concepts and applications. Stressing quality, readability and accuracy, it combines comprehensive coverage with instructional flexibility in what may be the most practical student-oriented series of texts.

About the Author:

Anna C. Fowler is the John Arch White Professor in the Department of Accounting at the University of Texas at Austin. She received her B.S. in accounting from the University of Alabama and her M.B.A. and Ph.D. from the University of Texas at Austin. Active in the American Taxation Association, she has served on the editorial board of its journal and has held many positions, including president, within the organization. She is also active with the American Institute of CPAs and currently serves on the Executive committee of its Tax Division. Currently, Professor Fowler is a member of the Board of Trustees of the Educational Foundation of the Texas Society of CPAs. She has published a number of articles, most of which have dealt with estate planning or real estate transaction issues. She also is a frequent speaker before professional organizations on estate planning topics. Richard J. Joseph is a Senior Lecturer in Taxation at The University of Texas at Austin McCombs School of Business. He also is Director of the Master of Professional Accounting Program and the Professional Program in Accounting. A graduate magna cum laude of Harvard College (B.A.), Oxford University (M.Litt.), and The University of Texas School of Law (J.D.), Mr. Joseph has taught individual, corporate, international and interstate taxation, tax research methods, tax issues in business management, and the fundamentals of financial and managerial accounting. A former Adjunct Professor at the University of Texas at Arlington, he also has taught contract, corporate, securities, agency, and partnership law. Before embarking on his academic career, Mr. Joseph worked as an investment banker at Lehman Brothers, securities trader at Bear Steams, and as a mergers and acquisitions lawyer for the Bass Group. He has published articles on tax equity, the consumption and flat taxes, and the theory of contract formation. Susan L. Nordhauser is a professor at the University of Texas at San Antonio. She received her B.A. from Cornell University, her M.S. from Purdue University, and her Ph.D. from the University of Texas at Austin. She has published many articles on taxation in journals including The Journal of the American Taxation Association, The Accounting Review, The Tax Adviser, and The National Tax Journal. Nordhauser is the recipient of the 1992 Ernst & Young Tax Literature Award. She has served on the editorial board of several academic tax journals. Michael S. Schadewald is an Associate Professor of Accounting and Director of the Deloitte & Touche Center for Multistate Taxation at the University of Wisconsin-Milwaukee. He holds a Ph.D. from the University of Minnesota, an M.S. from the University of Wisconsin-Milwaukee, and a B.B.A. from the University of Wisconsin-Whitewater. He has co-authored a book on international taxation and has published over 30 articles in a number of accounting and tax journals, including The Journal of the American Taxation Association, The Accounting Review, Contemporay Accounting Research, and The Journal o f Taxation. He serves on the editorial boards of The Journal o f the American Taxation Association, International Tax Journal, Issues in Accounting Education, and Journal o f Accounting Education. He has been awarded numerous research grants and fellowships by Big-Five accounting firms and has worked in the Milwaukee office of Arthur Young (now part of Ernst & Young) prior to entering academics.

Excerpt. © Reprinted by permission. All rights reserved.:

OBJECTIVES AND USE

This text is designed for use in a second course in federal taxation for undergraduate accounting and business students. The text also can be used at the graduate level, such as a Masters of Accounting, Masters of Taxation, or MBA program. The text materials have been updated to reflect recent legislative (through January 1, 2001), judicial, and administrative changes in the tax law.

A companion volume, Prentice Hall's Federal Taxation, 2002: Individuals, is published for use in the first course in federal taxation. A combined two-semester volume, Prentice Hall's Federal Taxation, 2002: Comprehensive joins 14 chapters of the Individuals volume with 14 chapters of the Corporations, Partnerships, Estates, and Trusts volume. Either the Individuals text or the Comprehensive volume may be used with a one-term survey course for undergraduate or graduate students.

The Corporations, Partnerships, Estates, and Trusts volume is in the format of a mini-Masters of Taxation program. This book includes coverage of all the major areas normally included in a Masters of Taxation program.

Our objective is to provide a readable format with a high level of technical content. We accomplish this through a process of continuous review, improvement, and clarification of the text, examples, and problem material. If you find what you believe is an error, please provide the item to one of the editors along with your comments. We maintain this level of content by focusing on primary topics and relegating minor exceptions to footnotes.

FEATURES

• The 2002 Edition of Prentice Hall's Federal Taxation includes an online Multistate income taxation chapter. This chapter provides tax instructors with a vehicle to introduce students to a topic of increasing importance among tax practitioners. It provides an overview of state and local tax systems, as well as a more in-depth discussion of state income tax issues such as nexus, corporate filing options, the definition of state taxable income, allocation and apportionment, and state taxation of S Corporations, partnerships and limited liability companies. A complete set of assignment material is available with the chapter in addition to links to related Internet resources. Instructors and students may download the chapter, free of charge, from the Web site that accompanies the book www.prenhall.com/phtax .
• Chapter 1: Tax Research. This chapter (1) provides information on the steps in the research process and (2) explains the role of computers in tax research. A special supplement called How To Do Tax Research (available from Prentice Hall's Web site www.prenhall.com/phtax ) further enhances this coverage by explaining how to electronically research a problem based on an actual case.
• Problems combining tax and financial accounting. Since taxes have an impact on virtually every financial transaction, students should understand the interrelationship and differences between financial accounting and tax accounting. Most chapters have at least one problem that asks students to compare the tax and financial accounting treatments of various transactions and are identified by a marginal icon.
• A careful choice of topics. Users have found favor with the choice of topics and the extent of detail presented throughout the text. They are particularly pleased with our balance between exhaustive detail and too little detail for topics such as tax research, the corporate alternative minimum tax, and partnership taxation.
• Unique chapter organization. The CPET volume differs from other texts on the market with its life cycle approach to the taxation of the corporation and the way the partnership and S corporation materials are tied together.
• Clear examples. Users regularly praise the clarity and number of examples in this text.
• Margin notes. Students appreciate learning about more than just tax rules, so we developed a series of comments in the margin to enrich their learning experience.
  - Key Points emphasize areas where students require repetition and reinforcement.
  - Typical Misconceptions identify concepts that students are likely to misunderstand and help them correct their thinking before they take a wrong approach.
  - Real World Examples provide facts and anecdotes about the IRS, actual companies, and real-life strategies.
  - Additional Comments elaborate on material presented in the text.
  - Self-Study Questions provide an in-text study guide. Each question is accompanied by a full solution.
  - Historical Notes offer a comprehensive understanding of concepts by examining them in their historical context.
  - Ethical Points focus on ethical questions that confront the tax practitioner, and are designated with an ethics icon.
  - Book-to-Tax Accounting Comparisons point out differences between tax accounting and financial accounting.

PEDAGOGY

• Topic reviews. Each chapter contains several topic reviews to help students organize their understanding of the material and aid in preparing for exams. Many of these reviews are in tabular form for easy reference.
• Tax Planning Considerations. For the forward-looking part of the tax profession, students need to learn how to offer tax-saving advice for their clients. Our Tax Planning Considerations offer this insight once the basics of the rules have been established.
• Compliance and Procedural Considerations. Forms, procedures, and timing are addressed in the Compliance and Procedural Consideration section at the end of each chapter.
• Footnotes. An important component of "learning to learn" is knowing where to turn for authoritative information. We collected important references to the tax authorities in the footnotes for students and instructors to use as sources.
• A full complement of assignment material. The typical format for each chapter includes: discussion questions, issue identification questions, problems, comprehensive problems, tax form/return preparation problems, case study problems, and tax research problems. Most chapters contain at least one comprehensive problem that ties several issues together.
• Oral and written communications. More emphasis is being placed on oral and written communication skills by the various accounting professional organizations (e.g., the American Institute of CPAs and the Accounting Education Change Commission). The case study problems at the end of each chapter are designed to meet this need by requiring students to consider a number of alternatives and present a written or oral solution to the problem. None of these case studies requires the student to research the tax law.
• Expanded coverage of ethics. Each chapter contains a box labeled "What Would You Do in This Situation?," and a reprinting of the AICPA's Statements on Standards for Tax Services appears in an appendix. These features expand our coverage of ethics. The boxes include many controversies that are as yet unresolved or currently being considered by the courts. They represent choices that may put the practitioner at odds with the client and are grounded on ethical parameters discussed in various standards, codes of conduct, or Treasury Department circulars. Students are asked to indicate what they would do if they found themselves in the same situation as well as the ethical implications of their actions. The boxes and the Statements on Standards enhance the Ethical Point margin notes and the ethical issues found in the Case Study Problems already presented in the text.
• Stop & Think feature. These "speedbumps" ask students to stop and think about a business application of tax, or an extension of the basic material, at various points in the chapter. These items are not "boxes," which typically fall outside the running text and can be bypassed. Rather, they are part of the text, complete with solutions to show students "how to do it" and are identified by the icon you see here in the margin.
• Issue identification questions. Part of the learning process involves sorting out important information from unimportant details. In an area as detail-oriented as taxation, developing the ability to identify key issues is of paramount importance. We include questions at the end of each chapter that call on students to focus on the important questions that a practitioner faces on a daily basis.
• Improvements in the Test Bank. Aside from the Solutions Manual, no other supplement is as important to educators as the Test Bank. Each year the test bank author places special emphasis on refining and polishing the test questions.

SUPPLEMENTAL MATERIALS

The text includes a full complement of supplementary materials. Adopters are encouraged to use these materials to enhance their teaching effectiveness and the students' learning experience. The following aids are available for instructor and student use:

INSTRUCTOR AIDS

• Loose-Leaf Edition—All text versions are available in a 3-hole punched, shrink-wrapped format.
• Instructor's Guide—This specially crafted instructor's guide includes sample syllabi, instructor's outlines, a series of interesting court cases to teach, a summary of modifications, deletions, and additions to the end-of-chapter problems, and selected teaching assignments. The instructor's outlines also are available on diskettes and may be downloaded from the faculty resources link www.prenhall.com/phtax . Faculty password and user i.d. may be obtained from your Prentice Hall representative. 1 Solutions Manual-This volume includes solutions to the discussion questions, problems, and comprehensive problems. The solutions to the tax form/tax return preparation problems, case studies, and the research problems are included in the instructor's guide. The solutions manual also is available on disk and may be downloaded from the faculty resource link at www.prenhall.com/Phtax. Faculty password and user i.d. may be obtained from your Prentice Hall representative.
• Test Bank—An extensive array of true-false, multiple choice, essay questions, and calculative problems are included.
• Prentice Hall Test Manager by ESA, Inc.—This easy-to-use computerized testing program can create exams, evaluate, and track student results. PH Test Manager also provides online testing capabilities. Test items are drawn from the test item file. Call-in testing at 1800-550-1701 is also available on this title Monday-Friday 8:00 a.m.-8:00 p.m. est.
• PowerPoint Transparencies—Approximately 300 full color electronic transparencies are available for each book to enrich the teaching experience. Instructors can make additions or modifications to the transparencies prior to using them in class. The PowerPoint transparencies also may be downloaded from the faculty resources link on the www.prenhall.com/phtax site. Faculty password and user i.d. may be obtained from your Prentice Hall representative.
• Web Site—Prentice Hall has created a unique Web site designed to meet the needs of students and faculty. This Web site www.prenhall.com/phtax contains free student resources, free faculty resources, and premium student resources. These resources are described below:
  1. Free Student Resources include: current events, internet resources, tax law updates, and student study tips. These tools are not password protected.
  2. Free Faculty Resources include downloadable files for: PowerPoint transparencies, instructor's outlines, instructor solutions manual, teaching tips, and solutions for online tax practice problems. These tools are provided at no charge to adopting faculty members and are password protected (Faculty password and user i.d. may be obtained from your Prentice Hall representative.)

Premium Student Resources

• Online "Study Guide"—Students can check their understanding of chapter topics with a variety of multiple-choice and true/false questions, computational problems, case study problems, and tax return preparation problems. Each quiz includes "hints," immediate scoring, graphical results reporter, explanation of incorrect answers, and the ability to email results to a faculty member or other designated individual.
• Online Tax Cases for Individuals and Corporations—"Life of Riley" tax cases require the student to research specific questions to complete the tax return for a given individual. Forms are available in a downloadable format. "Endorphin USA" tax cases require the student to research specific questions to complete the entire tax return for Endorphin USA as a C corporation, S corporation, or partnership. Forms are available in a downloadable format.
  
  Students wishing to purchase the premium student resources can purchase directly through the Web site by clicking on the Study Guide or Tax Cases link, or they can order the passcode for online supplements through their bookstore.
• TaxCut Software—This software allows you to easily prepare your individual tax return by asking you questions just like a tax professional would and filling in the form for you. TaxCut audits your return before you file, allows you to print IRS-approved forms on your own printer and offers context sensitive IRS instructions. The software is free to professors adopting a PH tax text and students can purchase copies for $14.95 directly from Block Financial Corp. by using the coupons found in the book.
• Tax Analysts' OneDisc CD-ROM—Provides all the tools used by tax professionals to do research—Internal Revenue Code, Treasury Regulations, revenue rulings and procedures, court decisions and more! The software is free to professors adopting a Prentice Hall tax text and students can purchase copies for $19.95 directly from Tax Analysts by using the coupon found in the book.

ACKNOWLEDGMENTS

Our policy is to provide annual editions and to prepare timely updated supplements when major tax revisions occur. We are most appreciative of the suggestions made by outside reviewers because these extensive review procedures have been valuable to the authors and editors during the revision process.

We also are grateful to the various graduate assistants, doctoral students, and colleagues who have reviewed the text and supplementary materials and checked solutions to maintain a high level of technical accuracy. In particular, we would like to acknowledge the following colleagues who assisted in the preparation of supplemental materials for this text.

Kenneth E. Anderson kea@utk.edu
Thomas R. Pope tpope@pop.uky.edu
John L. Kramer jkramer@notes.cba.ufl.edu