Exam (elaborations)

Solution Manual for McGraw-Hill's Taxation of Individuals 2024 Edition, 15th Edition By Brian Spilker, Benjamin Ayers, All Chapters 1 - 14

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McGraw-Hill\\\'s Taxation of Individuals

Institution
McGraw-Hill\\\'s Taxation Of Individuals

Solution Manual for McGraw-Hill's Taxation of Individuals 2024 Edition, 15th Edition By Brian Spilker, Benjamin Ayers, All Chapters 1 - 14 Solution Manual for McGraw-Hill's Taxation of Individuals 2024 Edition, 15th Edition By Brian Spilker, Benjamin Ayers, All Chapters 1 - 14 Solution Manual f...

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Uploaded on November 7, 2024
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mcgraw hills
taxation of individuals
solution manual for mcgraw hills taxation of indi

Institution McGraw-Hill's Taxation of Individuals
Course McGraw-Hill's Taxation of Individuals

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Solution Manual for McGraw-Hill's Taxation of
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Individuals 2024 Edition, 15th Edition
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By Brian Spilker, Benjamin Ayers, All Chapters 1 -
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14
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,TABLE OF CONTENTS xx!! xx!! xx!!

Part I: Introduction to Taxation
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Chapter 1: An Introduction to Tax
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Chapter 2: Tax Compliance, the IRS, and Tax Authorities
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Chapter 3: Tax Planning Strategies and Related Limitations
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Part II: Basic Individual Taxation
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Chapter 4: Individual Income Tax Overview, Dependents, and Filing Status
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Chapter 5: Gross Income and Exclusions
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Chapter 6: Individual Deductions
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Chapter 7: Investments
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Chapter 8: Individual Income Tax Computation and Tax Credits
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Part III: Business-Related Transactions
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Chapter 9: Business Income, Deductions, and Accounting Methods
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Chapter 10: Property Acquisition and Cost Recovery
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Chapter 11: Property Dispositions
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Part IV: Specialized Topics
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Chapter 12: Compensation
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Chapter 13: Retirement Savings and Deferred Compensation
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Chapter 14: Tax Consequences of Home Ownership
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,Chapter 1 xx!!

An Introduction to Tax
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Discussion Questions xx!!

(1) [LO 1] Jessica’s friend Zachary once stated that he couldn’t understand why
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someone would take a tax course. Why is this a rather naïve view?
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Taxes are a part of everyday life and have a financial effect on many of the major personal
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decisions that individuals face (e.g., investment decisions, evaluating
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saving for education expenses, gift or estate planning, etc.).
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(2) [LO 1] What are some aspects of business that require knowledge of taxation?
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xWhat are some aspects of personal finance that require knowledge of
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taxation?
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Taxes play an important role in fundamental business decisions such as the following:
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 What organizational form should a business use? xx!! xx!! xx!! xx!! xx!! xx!!

 Where should the business locate? xx!! xx!! xx!! xx!!

 How should business acquisitions be structured? xx!! xx!! xx!! xx!! xx!!

 How should the business compensate employees? xx!! xx!! xx!! xx!! xx!!

 What is the appropriate mix of debt and equity for the business? xx!! xx!! xx!! xx!! xx!! xx!! xx!! xx!! xx!! xx!! xx!!

 Should the business rent or own its equipment and property? xx!! xx!! xx!! xx!! xx!! xx!! xx!! xx!! xx!!

 How should the business distribute profits to its owners? xx!! xx!! xx!! xx!! xx!! xx!! xx!! xx!!

One must consider all transaction costs (including taxes) to evaluate the merits of a
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transaction.
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Common personal financial decisions that taxes influence include: choosing
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retirement planning, choosing to rent or buy a home, evaluating
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saving for education expenses, and doing gift or estate
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(3) [LO 1] Describe some ways in which taxes affect the political process in the
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United States.
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U.S. presidential candidates often distinguish themselves from their opponents
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, based upon their tax rhetoric. Likewise, the major political parties generally have very diverse
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views of the appropriate way to tax the public. Determining who is taxed, what is taxed,
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and how much is taxed are difficult questions. Voters must have a basic understanding of
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taxes to evaluate the merits of alternative tax
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candidates and their political parties.
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(4) [LO 2] Courtney recently received a speeding ticket on her way to the university.
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Her fine was $200. Is this considered a tax? Why or why not?
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The $200 speeding ticket is not considered a tax. Instead, it is considered a fine
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penalty. Taxes differ from fines and penalties because taxes are not intended to punish or
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prevent illegal behavior.
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(5) [LO 2] Marlon and Latoya recently started building a house. They had to pay
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$300 to the county government for a building permit. Is the $300 payment a tax?
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Why or why not?
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The building permit is not considered a tax because $300 payment is directly
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benefit that they received (i.e., the ability to build a house).
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(6) [LO 2] To help pay for the city’s new stadium, the city of Birmingham recently
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enacted a 1 percent surcharge on hotel rooms. Is this a tax? Why or why not?
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The 1 percent surcharge is a tax. The 1 percent surcharge is an earmarked tax – i.e.,
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collected for a specific purpose. The surcharge is considered a tax because the tax payments
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made by taxpayers do not directly relate to the specific benefit received by the taxpayers.
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(7) [LO 2] As noted in Example 1-2, tolls, parking meter fees, and annual licensing
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fees are not considered taxes. Can you identify other fees that are similar?
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There are several possible answers to this question. Some common examples include entrance
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fees to national parks, tag fees paid to local/state government
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(8) [LO 2] If the general objective of our tax system is to raise revenue, why does the
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income tax allow deductions for charitable contributions and retirement plan
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contributions?
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In addition to the general objective of raising revenue, Congress uses the federal tax system
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to encourage certain behavior and discourage other behavior. The charitable contribution
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deduction is intended to encourage taxpayers to support
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organizations, whereas deductions for retirement
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retirement savings. Another objective of
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Exam (elaborations)

Solution Manual for McGraw-Hill's Taxation of Individuals 2024 Edition, 15th Edition By Brian Spilker, Benjamin Ayers, All Chapters 1 - 14

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