South-Western Federal Taxation
2025 Individual Income Taxes
48th Edition by James C. Young
Complete Chapter Solutions Manual
are included (Ch 1 to 20)
** Immediate Download
** Swift Response
** All Chapters included
,Table of Contents are given below
Chapter 01: An Introduction to Taxation and Understanding the Federal Tax Law
Chapter 02: Working with the Tax Law
Chapter 03: Tax Formula and Tax Determination
Chapter 04: Gross Income: Concepts and Inclusions
Chapter 05: Gross Income:Exclusions
Chapter 06: Deductions and Losses: In General
Chapter 07: Deductions and Losses :Certain Business Expenses
Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
Chapter 09: Deductions: Employee and Self-Employed-Related Expense
Chapter 10: Deductions and Losses: Certain Itemized Deductions
Chapter 11: Investor Losses Chapter 12: Alternative Minimum Tax
Chapter 13: Tax Credits and Payment Procedures
Chapter 14: Property Transactions: Determination of Gain or Loss and Basis
Considerations
Chapter 15: Property Transactions: Nontaxable Exchanges
Chapter 16: Property Transactions: Capital Gains and Losses
Chapter 17: Property Transactions: 1231 and Recapture Provisions
Chapter 18: Accounting Periods and Methods
Chapter 19: Deferred Compensation
Chapter 20: Corporations and Partnerships
,Solutions Manual organized in reverse order, with the last chapter
displayed first, to ensure that all chapters are included in this document.
(Complete Chapters included Ch20-1)
Solution and Answer Guide
YOUNG, NELLEN, PERSELLIN, LASSAR, CUCCIA, CRIPE, SWFT INDIVIDUAL INCOME TAXES 2025,
9780357988954; CHAPTER 20: CORPORATIONS AND PARTNERSHIPS
TABLE OF CONTENTS
Discussion Questions...........................................................................................................1
Computational Exercises ................................................................................................... 5
Problems ............................................................................................................................. 7
Research Problems ........................................................................................................... 19
Check Figures.................................................................................................................... 22
Solutions To Ethics & Equity Features ............................................................................ 24
Solutions To Becker CPA Review Questions ................................................................... 24
DISCUSSION QUESTIONS
1. (LO 1) A corporation’s status may be questioned if the separation between the owner
and the entity is called into question. This could happen in situations where the
accounts of the owners and the corporation are not kept separately, the formalities of
corporate status are ignored, or the corporation is undercapitalized and would not
reasonably be able to carry on activities without the owner’s personal involvement.
2. (LO 1) As far as complexity of paperwork is concerned, for a business with two or more
owners, the partnership structure is the simplest, requiring little or no paperwork in
most states; on the other hand, a corporation generally requires that article of
incorporation, bylaws, shares of stock, etc., be prepared and maintained. A partnership
does not generally shield its owners from third-party liability, while a corporation
generally does. However, Sylvia and Trang might consider a limited liability company to
achieve limited personal liability but preserve flow-through treatment consistent with
a partnership.
Because Sylvia and Trang are going into business together, they cannot run the
business jointly without triggering partnership tax status unless they are married and
make a qualified joint venture election. Finally, a partnership can permit much more
flexibility than a corporation with respect to owners’ rights and interests.
Partnerships and LLCs offer a great deal of flexibility through the partnership or LLCs’
agreements, wherein terms such as the sharing of income and losses, the sharing of
debts, and the distribution of property can be negotiated as part of the agreement
between the owners.
, 3. (LO 1) Both partnerships and S corporations are described as pass-through entities
because the earnings and losses are designed to pass through the entities directly to
the owners. In addition, the character of the underlying income is retained. For
example, assume that Partner A and Partner B form Partnership X with equal interests
of 50%. Partnership X earns ordinary income of $100, a capital gain of $40, and tax-
exempt interest income of $10. Partnership X does not pay any income tax on the
operations of the partnership; instead, the items pass through directly to the partners.
Partner A Partner B
Ordinary income $50 $50
Capital gain 20 20
Tax-exempt interest income 5 5
4. (LO 1, 10) Limited liability companies offer limited liability for owners, centralized
management, and continuity of life. LLC rules may vary from state to state, but most
require formal paperwork. Owners’ rights and the type of owners can be flexible under
the LLC structure. LLCs with a single owner can be treated as a corporation or as a
disregarded entity for tax purposes. LLCs with more than one owner can be treated as
a partnership or corporation for Federal income tax purposes.
5. (LO 1, 2, 10) Because the proposed venture may expose the Oroscos to high risk, the
brothers will want to use an entity that provides limited liability. With losses expected
at the outset, the choice should be an entity that allows a pass-through to the
owners. Both of these features can be obtained using an S corporation or a limited
liability company (LLC).
6. (LO 3, 4, 5, 10)
a. Only individuals and less than 150 large C corporations are subject to AMT.
b. Qualified dividends received by individual shareholders are taxed at the preferential
rate applicable to long-term capital gains. Corporations that receive dividends from
other corporations are allowed a deduction. The amount of the deduction (50%,
65%, or 100%) depends on the percentage of stock owned in the payor corporation.
c. Individuals with qualified business income may generally claim a 20% deduction for
such income (§ 199A). Corporations are not entitled to this deduction.
d. The cash method of accounting is available to C corporations with gross receipts
in the prior three-year period of $30,000,000 or less and certain other corporations
(e.g., S corporations, qualified personal service corporations, and those in the trade
or business of farming or growing timber). Individuals generally use the cash
method.
e. As to accounting periods, both individuals and corporations enjoy the same choices.
However, personal service corporations are subject to limitations on the use of a
fiscal year.
f. Noncorporate taxpayers are subject to progressive income tax rates. The brackets
range from 0% to 37% for individuals. Corporations are taxed at a flat 21% rate.
g. Both individual and corporate tax returns must be filed on or before the fifteenth
day of the fourth month following the close of the tax year. Each may also obtain a
six-month extension to file (but not to pay).
