Income Tax Fundamentals 2020

Cover
About the Authors
Reviewers
Acknowledgments
The Annotated 1040 Map
Table of Contents
Questions
Chapter 1: The Individual Income Tax Return
	1-1 History and Objectives of the Tax System
	1-2 Reporting and Taxable Entities
	1-3 The Tax Formula for Individuals
	1-4 Who Must File
	1-5 Filing Status and Tax Computation
	1-6 Qualifying Dependents
	1-7 The Standard Deduction
	1-8 A Brief Overview of Capital Gains and Losses
	1-9 Tax and the Internet
	1-10 Electronic Filing (E-Filing)
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 2: Gross Income and Exclusions
	2-1 The Nature of Gross Income
	2-2 Salaries and Wages
	2-3 Accident and Health Insurance
	2-4 Meals and Lodging
	2-5 Employee Fringe Benefits
	2-6 Prizes and Awards
	2-7 Annuities
	2-8 Life Insurance
	2-9 Interest and Dividend Income
	2-10 Municipal Bond Interest
	2-11 Gifts and Inheritances
	2-12 Scholarships
	2-13 Alimony
	2-14 Educational Incentives
	2-15 Unemployment Compensation
	2-16 Social Security Benefits
	2-17 Community Property
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 3: Business Income and Expenses
	3-1 Schedule C
	3-2 Inventories
	3-3 Transportation
	3-4 Travel Expenses
	3-5 Meals and Entertainment
	3-6 Educational Expenses
	3-7 Dues, Subscriptions, and Publications
	3-8 Special Clothing and Uniforms
	3-9 Business Gifts
	3-10 Bad Debts
	3-11 Office in the Home
	3-12 Hobby Losses
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 4: Additional Income and the Qualified Business Income Deduction
	4-1 What Is a Capital Asset?
	4-2 Holding Period
	4-3 Calculation of Gain or Loss
	4-4 Net Capital Gains
	4-5 Net Capital Losses
	4-6 Sale of a Personal Residence
	4-7 Rental Income and Expenses
	4-8 Passive Loss Limitations
	4-9 Net Operating Losses
	4-10 Qualified Business Income (QBI) Deduction
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 5: Deductions For and From AGI
	5-1 Health Savings Accounts
	5-2 Self-Employed Health Insurance Deduction
	5-3 Individual Retirement Accounts
	5-4 Small Business and Self-Employed Retirement Plans
	5-5 Other for AGI Deductions
	5-6 Medical Expenses
	5-7 Taxes
	5-8 Interest
	5-9 Charitable Contributions
	5-10 Other Itemized Deductions
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 6: Accounting Periods and Other Taxes
	6-1 Accounting Periods
	6-2 Accounting Methods
	6-3 Related Parties (Section 267)
	6-4 Unearned Income of Minor Children and Certain Students
	6-5 The Individual Alternative Minimum Tax (AMT)
	6-6 Self-Employment Tax
	6-7 The Nanny Tax
	6-8 Special Taxes for High-Income Taxpayers
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 7: Tax Credits
	7-1 Child Tax Credit
	7-2 Earned Income Credit
	7-3 Child and Dependent Care Credit
	7-4 The Affordable Care Act
	7-5 Education Tax Credits
	7-6 Foreign Exclusion and Tax Credit
	7-7 Adoption Expenses
	7-8 Energy Credits
	7-9 Low-Income Retirement Plan Contribution Credit
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 8: Depreciation and Sale of Business Property
	8-1 Depreciation
	8-2 Modified Accelerated Cost Recovery System (MACRS) and Bonus Depreciation
	8-3 Election to Expense (Section 179)
	8-4 Listed Property
	8-5 Limitation on Depreciation of Luxury Automobiles
	8-6 Intangibles
	8-7 Section 1231 Gains and Losses
	8-8 Depreciation Recapture
	8-9 Business Casualty Gains and Losses
	8-10 Installment Sales
	8-11 Like-Kind Exchanges
	8-12 Involuntary Conversions
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 9: Payroll, Estimated Payments, and Retirement Plans
	9-1 Withholding Methods
	9-2 Estimated Payments
	9-3 The FICA Tax
	9-4 Federal Tax Deposit System
	9-5 Employer Reporting Requirements
	9-6 The FUTA Tax
	9-7 Qualified Retirement Plans
	9-8 Rollovers
	Key Terms
	Key Points
	Questions and Problems
Chapter 10: Partnership Taxation
	10-1 Nature of Partnership Taxation
	10-2 Partnership Formation
	10-3 Partnership Income Reporting
	10-4 Current Distributions and Guaranteed Payments
	10-5 Tax Years
	10-6 Transactions between Partners and the Partnership
	10-7 Qualified Business Income Deduction for Partners
	10-8 The At-Risk Rule
	10-9 Limited Liability Companies
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 11: The Corporate Income Tax
	11-1 Corporate Tax Rates
	11-2 Corporate Gains and Losses
	11-3 Special Deductions and Limitations
	11-4 Schedule M-1
	11-5 Filing Requirements and Estimated Tax
	11-6 S Corporations
	11-7 Corporate Formation
	11-8 Corporate Accumulations
	11-9 The Corporate Alternative Minimum Tax
	Key Terms
	Key Points
	Questions and Problems
	Key Number Tax Return Summary
Chapter 12: Tax Administration and Tax Planning
	12-1 The Internal Revenue Service
	12-2 The Audit Process
	12-3 Interest and Penalties
	12-4 Statute of Limitations
	12-5 Preparers, Proof, and Privilege
	12-6 The Taxpayer Bill of Rights
	12-7 Tax Planning
	Key Terms
	Key Points
	Questions and Problems
Appendices
	Appendix A: Tax Rate Schedules and Tax Table
	Appendix B: Earned Income Credit Table
	Appendix C: Withholding Tables
	Appendix D: Additional Comprehensive Tax Return Problems
	Appendix E: Solutions to Self-Study Problems
Glossary of Tax Terms
Index
List of Forms
List of Schedules
List of Worksheets