Taxation of Individuals and Business Entities 2014, 5/e
Brian C. Spilker,
Brigham Young University Benjamin C. Ayers,
The University of Georgia John Robinson,
The University of Texas at Austin Ron Worsham,
Brigham Young University Ed Outslay,
Michigan State University John Barrick,
Brigham Young University Connie D. Weaver,
Texas A&M University
ISBN: 007786235x Copyright year: 2014
Feature Summary
New Features:
LearnSmart! New for the 2014 edition! LearnSmart adaptive self-study technology within Connect Accounting helps students make the best use of their study time. LearnSmart provides a seamless combination of practice, assessment, and remediation for every concept in the textbook. LearnSmart's intelligent software adapts to students by supplying questions on a new concept when they are ready to learn it. With LearnSmart, students will spend less time on topics they understand and practice more on those they have yet to master.
Intelligence Response Technology (IRT) in Connect: IRT is a redesigned student interface for our end-of-chapter assessment content. The benefits include improved answer acceptance to reduce students' frustration with formatting issues (such as rounding). Also, select questions have been redesigned to test students' knowledge more fully. They now include tables for students to work through rather than requiring that all calculations be done offline.
The book has been completely updated for all new tax law, rate changes, and 2012 tax forms. The book is current through February 2013. Other updates beyond September can be found on the book's Online Learning Center, www.mhhe.com/spilker2014.
Relevant content changes have been integrated throughout the text. These notable changes include:
All tax forms have been updated for the latest available tax form as of January 2013. In addition, chapter content throughout the text has been updated to reflect tax law changes through January 2013.
Chapter 1
Updated chapter for legislative changes for individual income tax and estate tax.
Updated Exhibits 1-4 and 1-5 for tax revenue changes.
Chapter 2
Updated for 2013 inflation adjustments and legislative changes.
Removed discussion of preparer tax identification number, related fees, and continuing education requirements due to recent judicial action.
Chapter 3
Clarified potential non-tax issues involved with timing strategy.
Updated chapter for legislative changes.
Chapter 4
Modified the title of the chapter to Individual Income Tax Overview, Personal and Dependency Exemptions, and Filing Status.
Updated discussion of tax rates applicable to qualified dividends and net capital gains to reflect tax law changes from the American Taxpayer Relief Act of 2012.
Added flowchart for determining dependency exemptions.
Added flowchart for determining fi ling status.
Replaced Exhibit 4-9 with a new flowchart for determining whether an individual is a qualifying person for purposes of determining head of household filing status.
Added footnote referencing to Exhibit 2-1 for a description of who is required to file a tax return.
Inserted footnote linking students to the 1913 individual tax form located at www.irs.gov.
Added language describing that itemized deductions are reported in detail on Schedule A of Form 1040.
Added language describing that a taxpayer who is a dependent of another may not claim any personal or dependency exemptions.
Added new example for determining the taxpayer's dependency exemptions.
Added an additional item to the list describing the primary differences between a qualifying child and a qualifying relative.
Added an additional What If dealing with head of household fi ling status.
Revised the abandoned spouse discussion. The revised section is titled “Married individuals treated as unmarried (abandoned spouse).”
Added language in Example 4-14 to clarify example dealing with married taxpayers treated as unmarried (abandoned spouses).
Added a problem requirement dealing with determining fi ling status.
Revised problem and added requirement dealing with determining filing status and personal and dependency exemptions.
Added a problem requirement dealing with head of household fi ling status.
Updated numbers to reflect law changes and inflation adjustments.
Chapter 5
Revised discussion of dividends and health care reimbursement.
Updated chapter for 2013 inflation adjustments, legislative changes, and new tax forms.
Revised and expanded discussion of common qualifying fringe benefits, including new limit for flexible spending accounts.
Updated discussion for revised gift tax annual exclusion and estate tax unified credit.
Chapter 6
Updated chapter for 2013 inflation adjustments and legislative changes.
Updated discussions for extension of deduction for qualified education expenses.
Revised discussion of moving expense deduction, medical expense deduction, mortgage interest deduction, and documentation requirements for charitable contributions.
Updated for extension of state and local sales tax deduction in lieu of state and local income tax deduction.
Updated for extension of deduction for premiums on mortgage insurance.
Added discussions of newly enacted itemized deduction phase-out and personal exemption phase-out.
Updated chapter for tax law changes and new tax forms.
Chapter 7
Revised discussion of Alternative Minimum Tax, employee
FICA taxes payable, and Self-Employment tax.
Updated chapter for 2013 inflation adjustments and legislative changes.
Revised discussion of capital gains and dividend taxation.
Added discussion of the 3.8% Medicare contribution tax on net investment income.
Revised discussion of the foreign tax credit offset against taxes and offset of nonrefundable personal credits against regular tax and AMT.
Updated chapter for tax law changes and new tax forms.
Chapter 8
Revised text and problems to update car and truck expenses for 2012. The standard mileage rate for use of a vehicle is 55.5 cents per mile for business miles driven.
Revised discussion of economic performance and recurring expense exception.
Clarified application of the Cohan Rule.
Updated chapter for tax law changes and new tax forms.
Refined explanation of how tax accounting can create book-tax differences.
Add short synopsis of Comm. v. Indianapolis Power & Light Co.
Revised exceptions to the UNICAP rules.
Chapter 9
Updated chapter for legislative changes.
Revised most examples to reflect extension §179 and bonus depreciation provisions.
Added discussion on repair regulations issued December 2011.
Clarified location of depreciation tables in Appendix at the end of the chapter.
Expanded Table 1 to include depreciation rates for 3-, 5-, 7-, 10-, 15-, and 20-year assets.
Chapter 10
Updated chapter for legislative changes.
Revised examples affected by tax law changes.
Added new exhibit to illustrate the flow of gains and losses from the taxable sale of assets used in a trade or business.
Chapter 11
Updated chapter for legislative changes and new tax forms.
Clarified taxation of long-term capital gains using new rates.
Added new footnote explanation of taxation of qualified dividends.
Added new example using the 20% tax rate on long-term capital gains.
Revised the process to determine tax on capital gains.
Added discussion of the 3.8% Medicare tax on investment tax.
Revised discussion of net investment income.
Added discussion of the 3.8% Medicare tax on net passive income.
Chapter 12
Updated chapter for legislative changes and new tax forms.
Included updated exhibits from all proxy statements.
Updated income tax withholding calculations.
Clarified qualified employee discounts and modified Example 12-20 and problem 54.
Chapter 13
Added an example (in the text) relating to minimum distributions.
Did significant edits/rewrite of IRA/Roth IRA discussion.
Created flowcharts for determining the amount of deductible contributions to traditional IRAs.
Created flowchart for determining the amount of allowable Roth IRA contributions.
Added problem requirement for determining amount of spousal IRA contribution.
Added new problem on taxpayer's maximum contribution to IRAs in the aggregate.
Updated to reflect increase in employee's portion of social security tax relative to 2012 law.
Material throughout the chapter has been updated as for inflation-adjusted limitations and phase-out numbers.
Chapter 14
Added example on acquisition indebtedness.
Added example on qualified residence interest deduction.
Included information about appropriate depreciation method and depreciable lives for rental property and for home offices.
Added new exhibit with completed Form 8829 (expenses for business use of your home).
Added discussion question dealing with deductible items on settlement statement.
Added forms requirement to a problem requiring students to complete partial Schedule A for expenses associated with a rental property.
Updated to include discussion of the applicability of the new Medicare Contribution tax on net investment income to the material presented in the chapter.
Updated to reflect the mortgage insurance deduction extended by the American Taxpayer Relief Act of 2012.
Updated discussion, examples, and problems to cover the optional method for computing home office expenses as described in Rev. Proc. 2013-13.
Chapter 15
Added new exhibit with flowchart for check the box regulations.
Updated Taxes in the Real World describing tax entity types and number.
Updated discussion of tax rates applicable to qualified dividends and net capital gains to reflect tax law changes from the American Taxpayer Relief Act of 2012.
Updated to include discussion of the applicability of the new Medicare Contribution tax on net investment income to the material presented in the chapter.
Included new tax rates applicable for determining the personal holding company tax and the accumulated earnings tax as provided in the American Taxpayer Relief Act of 2012.
Added brief discussion of the accumulated earnings tax.
Added brief discussion of personal holding tax.
Included new tax rates applicable for determining the personal holding company tax and the accumulated earnings tax as provided in the American Taxpayer Relief Act of 2012.
Updated material and edited to respond to review comments.
Chapter 16
Updated material for current events and new tax forms.
Added a new Taxes in the Real World on Facebook's stock options.
Chapter 17
Updated material for current events and new tax forms.
Added two new Taxes in the Real World: Weatherford material weakness on tax accounting; AIG release of its valuation allowance.
Chapter 18
Revised explanation of the calculation of shareholder basis after distributions exhaust E&P.
Added a new Taxes in the Real World illustrating special dividends issued in anticipation of increase in tax rate on dividend income.
Extended explanation of the calculation of shareholder basis after stock splits and stock dividends.
Noted application of revised maximum tax on net long-term capital gains under the American Taxpayer Relief Act of 2012.
Chapter 19
Added new ethics problem on contributions to a controlled corporation.
Expanded and clarified example of computation of corporate basis in contributed property.
Revised example of depreciation of contributed property.
Expanded explanation of book tax differences involved in corporate acquisitions noting the possibility of a zero tax basis in goodwill when using a tax-deferred asset acquisition.
Revised discussion of risk in delaying stock sale to qualify for loss deduction under IRC §1244.
Chapter 20
Updated chapter for tax law changes and new tax forms.
Added new problem to end of chapter problems.
Chapter 21
Updated chapter for tax law changes.
Chapter 22
Revised Taxes in the Real World.
Updated chapter for tax law changes and new tax forms.
Revised discussion of built-in gains tax period and self-employment income.
Added discussion of 3.8% Medicare Contribution tax.
Chapter 23
Modified Exhibits 23-1 and 23-2.
Updated Taxes in the Real World for candy versus food items.
Included new Amazon proxy statement in Exhibit 23-4.
Inserted new Taxes in the Real World on e-commerce sales.
Modified the Taxes in the Real World on Groupon.
Included additional tax-planning strategies.
Chapter 24
Updated material for current events and new tax forms.
Added a new Taxes in the Real World on Aon Corporation's move to Ireland.
Chapter 25
Updated all examples and problems for changes in Unified Transfer Tax Rates under the American Taxpayer Relief Act of 2012.
Additional elaboration on annual changes in exemption equivalents and annual exclusions.
Added examples illustrating most recent estate and gift tax forms.
Revised explanations of unified credit to include translation of exemption equivalents using most current tax rates.
Added elaboration and examples comparing deceased spouse unused unified credit with bypass provision and QTIP trust.
Revised explanation and illustration of trade-off of overall tax savings from intervivos transfers versus testamentary transfers including illustration of the step-up in tax basis for income tax purposes.
Key Features:
Storyline Approach: Each chapter begins with a storyline that introduces a set of characters or a business entity facing specific tax-related situations. Each chapter's examples are related to the storyline, providing students with the opportunities to learn a set of client information and apply that data to a series of situations.
Conversational Writing Style: The authors took special care to write a textbook that fosters a friendly dialogue between the text and each individual student. The tone of the presentation is intentionally conversational – creating the impression of speaking with the student, as opposed to lecturing to the student.
Superior Organization of Related Topics: Taxation of Individuals & Business Entities takes a fresh approach to taxation by grouping related topics together in theme chapters, including separate chapters on home ownership, compensation, investments, and retirement savings & deferred compensation.
Real World Focus: Students learn best when they see how concepts are applied in the real world. For that reason, real-world examples and articles are included in "Taxes in the Real World" boxes throughout the book. These vignettes demonstrate current issues in taxation and show the relevance of tax issues in all areas of business.
Integrated Examples: The examples used throughout the chapter relate directly to the storyline presented at the beginning of each chapter, so students become familiar with one fact set and learn how to apply those facts to different scenarios. In addition to providing in-context examples, we provide "What-If" scenarios within many examples to illustrate how variations in the facts might or might not change the answers.
Wide Variety Of Assignment Material: Research Problems are special problems throughout the end of the chapter's assignment material. These require students to do both basic and more complex research on topics outside of the scope of the book. Each Research Problem includes an icon to differentiate it from regular problems. Planning Problems are another unique set of problems, also located at the end of the chapter's assignment material. These require students to test their tax planning skills after covering the chapter's topics. Each Planning Problem includes an icon to differentiate it from regular problems. Comprehensive and Tax Return Problems address multiple concepts in a single problem. Comprehensive problems are ideal for cumulative topics; for this reason, they are located at the end of all chapters. In the end of book Appendix C, we include Tax Return Problems that cover multiple chapters.
TaxACT for Business Entities: McGraw-Hill's Taxation can be packaged with tax software from TaxACT, one of the leading tax preparation software companies in the market today. The 2013 edition includes availability both Individuals and Business Entities software, including the 1040 forms and TaxACT Preparer's Business 3-Pack (with Forms 1065, 1120, and 1120S).
Author-Written Supplements to Ensure Quality and Consistency: The authors write all of the supplements for Taxation, including the Testbank, Solutions Manual, PowerPoints® and Instructor's Manual. Each supplement has been reviewed by the author team to ensure consistency with the text material and accuracy. With the author's personal involvement in each supplement, you can be assured that Taxation's supplements are the same high quality as the book.
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