Chapter Highlights

The chapters begin with Learning Objectives that preview the technical content and alert students to the important concepts to be mastered. These objectives appear again as marginal notations marking the place in the chapter where each learning objective is addressed. The chapters contain numerous examples and cases illustrating the topic or demonstrating the calculation under discussion. End-of-chapter materials begin with a list of Key Terms from the chapter. Definitions of the key terms from all the chapters are compiled in a Glossary for the text. The end-of-chapter materials also include five types of problems for instructors to assign for class discussion or for homework.

Questions and Problems for Discussion challenge students to think critically about conceptual and technical issues covered in the chapter. These problems tend to be open-ended and are designed to engage students in debate. Many problems require students to integrate material from previous chapters in formulating their responses.

Application Problems give students practice in applying the technical material covered in the chapter. Most of the problems are quantitative and students must perform a calculation (or a series of calculations) to derive a numeric solution to the problem.

Issue Recognition Problems are designed to develop students' ability to recognize the tax issues suggested by a set of facts and to state those issues as questions. The technical issues buried in these problems typically are not discussed in the chapter. Consequently, the students must rely on their understanding of basic principles to analyze the problem, spot the tax concern or opportunity, and formulate the question to be resolved. In short, students must take the first steps in the tax research process to respond to these problems.

Tax Planning Cases give students an opportunity to integrate their tax knowledge into a business planning framework. Most cases involve taxpayers who must decide whether to undertake a certain transaction or who must choose between alternative transactions. Students must assume the role of tax advisor by analyzing the case and recommending a course of action to maximize the after-tax value of the transaction.

Research Problems provide further opportunity for students to develop their analytic skills. These problems consist of short scenarios that suggest one or more tax issues. The scenarios conclude with explicit research questions for the students to answer. To find the answers, students need access to either a traditional or an electronic tax library. Instructors who assign the research problems can refer their students to Appendix C, which provides an overview of the tax research process. Suggested solutions to all end-of-chapter problems are included in an Instructor's Manual that accompanies the text.