Federal Income Tax Malman by tvr74609

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									                                  Federal Income Taxation
                                   Professor Linda Sugin
                                          Fall 2010



You must use TWEN in this course. I will keep a running calendar, post slides, and communicate
with you through TWEN, so register there. Check the TWEN calendar prior to each class
because I will tell you how far to prepare in the syllabus for each class – some topics will take a
few days.

Required Materials:
1. You must buy the textbook: Malman, Sugin, Solomon & Hesch, The Individual Tax Base:
Cases, Problems and Policies in Federal Taxation (second edition). This is a new edition, so you
cannot buy a used copy.
2. You may want to buy the Code and Regs: I have ordered a compact version (Federal Income
Tax Code and Regulations, Klein and Stark, Foundation Press), but you do not need to buy it
since you can download all the assigned statutes and regulations. You must have the assigned
statutes and regs with you in class, so decide what is most convenient for you.

Recommended Materials: Federal Income Taxation: A Law Student=s Guide by Marvin
Chirelstein. Any edition in the last 5 years will be helpful if you want to get a cheap used one. It
is also on reserve in the library.


Assignment for first class:

Read the recent articles from The New York Times and The New Yorker, posted on TWEN
under “Course Materials”:
       Floyd Norris, Taxes No Longer So Certain
       James Surowiecki, Soak the Very, Very Rich

Chapter 1. Introduction to the Tax Law

Assignment for second class:

       Introduction to Tax Policy, Introduction to Tax Terms and Concepts
       Text pp. 8-22

       Prepare the questions on page 15 and the problems at the end of the readings. Read the
       Code sections referenced in the problems in preparing your answers.

General Rule: In preparing for class, do all the “Problems” in the assigned pages, unless

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otherwise noted in this syllabus or on TWEN.

Chapter 2. Income and Deductions

A. Income vs. Consumption Tax.

       Text, pp. 27-30

B. Employers and Employees

       Income and Deductions: Compensation

       Text pp. 30-59

       I.R.C. ' 61; I.R.C. '102; I.R.C. '162(a)(1), (c), (e), (f), (g), (m), I.R.C. '263
       Treas. Reg. ' 1.61-2(a)(1), (d)(1),(2)(i); 1.162-1(a), -7, -8

       Exclusions from Income: Fringe Benefits

       Text, pp. 59-75 (omit problems 2 and 3)

       I.R.C. ' 61(a)(1); I.R.C. ' 83(a), (b), (c), (h); I.R.C. ' 119; I.R.C. ' 132(a)-(f)(h), (j)(1);
       I.R.C. '162(a).
       Treas. Reg. ' 1.61-2(d)(2)(i), -21(b)(1)-(2); 1.83-3(e); 1.132-6

C. Exclusions from Income: Gifts

       Text, pp. 86-99 (omit problem on p. 100)

       I.R.C. ' 102; I.R.C. '74; I.R.C. ' 274(b), (j)

Chapter 3. Refining the Concept of Income

A. Does Taxable Income Include Every Benefit Received?

       Text, pp. 101-139

       I.R.C. ' 1001(a)
       Treas. Reg. ' 1.61-14

B. Loans and Losses

       Text, pp. 139-168


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      I.R.C. ' 61(a)(12); I.R.C. ' 108(a), (d)(1), (e)(1)-(2), (5), (h); I.R.C. ' 165(a), (c), (d);
      I.R.C. ' 166

Chapter 4. Deductions and Credits

A. - B. Introductory Material

      Text pp. 169-174

      I.R.C. ' 62; I.R.C. ' 67(a),(b); I.R.C. ' 68(a)-(d), (f)

C. Mixed Business and Personal Expenses

      Commuting vs. Travel Away From Home

      Text pp. 174-186 (prepare problems 1-3 on pp. 185-186)

      I.R.C. '162(a)

      Meals and Entertainment

      Text pp. 186-195 (prepare problems 1 and 3 on p. 203)

      I.R.C. ' 62(a)(2), (c); I.R.C. ' 162(a); I.R.C. ' 212; I.R.C. ' 274(a), (b), (d), (e), (k), (n).
      Treas. Reg. ' 1.62-2(c)-(d); 1.162-2(a), 2(b)

      Child Care

      Text pp. 204-209

      I.R.C. ' 21; I.R.C. ' 24; I.R.C. ' 129; I.R.C. ' 132(a)(3), (d); I.R.C. ' 162(a); I.R.C. '
      262(a)

      Educational Expenses

      Text pp. 209-220

      I.R.C. ' 25A; I.R.C. ' 117; I.R.C. ' 127; I.R.C. ' 162(a); I.R.C. ' 221; I.R.C. ' 529(a)-
      (c)(3)(A), (e)(3); I.R.C. ' 530(a)-(d)(2), (d)(4)
      Treas. Reg. ' 1.162-5

D. Tax Favored Personal Expenses


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      Tax Expenditures and Personal Deductions

      Text pp. 236-245

      I.R.C. ' 24; I.R.C. ' 63(c); I.R.C. ' 151; I.R.C. ' 262

      Earned Income Tax Credit

      Text pp. 246-248

      I.R.C. '32(a)-(c)(3), (i); I.R.C. §36A; §152(a)-(c)

      Charitable Contributions

      Text pp. 248-266 (prepare only problem 1 on p. 266)

      I.R.C. '170(a)-(d), (f)(8)

Chapter 5. Timing of Income and Deductions

A.- B. Annual Accounting and Claim of Right Doctrine

      Text pp. 273-283

      I.R.C. '1341

C. Tax Benefit Concept

      Text pp. 283-289

      I.R.C. '111(a)

D. Methods of Accounting

      1. The Cash Method

      Text pp. 289-309 (omit problem 3 on page 309)

      I.R.C. '263; I.R.C. ' 451(a); I.R.C. ' 461(a).
      Treas. Reg. '1.61-1(a); 1.83-3(e); 1.446-1(a), -1(c)(1)(i); 1.451-1(a), -2(a): 1.461-1(a)(1).

      2. The Accrual Method


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       Text pp. 309-331 (Prepare problems 1 and 4 on pp. 330-331)

       I.R.C. '451(a); I.R.C. ' 461(a),(h).
       Treas. Reg. '1.446-1 (c)(1)(ii); 1.451-1(a); 1.461-1(a)(2)


Chapter 6. Interest

A. Time Value of Money, Interest Income & Deductions

       Text pp. 23-26, 332-344 (Prepare problems 1-3 on pp. 342-43)

       I.R.C. '103(a); I.R.C. ' 163(a), (d), (h); I.R.C. ' 265(a)(2); I.R.C. ' 267(a)(2).

B. Economic Accrual & Imputed Interest

       Text pp. 344-360 (prepare problems 2-4 on pp. 358-359)

       I.R.C. '1272(a)(1)-(5); I.R.C. ' 1273; I.R.C. ' 1275(a)(1)(A); I.R.C. ' 163(e)(1)-(2)

Chapter 7. Property Transactions

A. Introduction to Property Transactions

       Text pp. 375-378

B. Basis

       Text pp. 394-408

       I.R.C. ' 267; I.R.C. ' 1001; I.R.C. ' 1011; I.R.C. ' 1012; I.R.C. ' 1014; I.R.C. '
       1015(a),(e); I.R.C. ' 1031(a), (d); I.R.C. ' 1041(a)-(c)
       Treas. Reg. '1.1001-1(e); 1.1015-4

C. Capitalization and Depreciation

       Text pp. 408-429 (capitalization) 431-442 (depreciation) (problems TBD)

       I.R.C. '167(a)-(c); I.R.C. ' 168(a)-(e), (k), (i)(1); I.R.C. ' 179; I.R.C. ' 195; I.R.C. '
       197(a)-(d); I.R.C. ' 1016(a)(1)-(2); I.R.C. ' 263; I.R.C. ' 263A(a)-(b)
       Treas. Reg. ' 1.162-4; 1.263(a)-1(a); 1.263(a)-4(b)(1),(3), (c)(1), (f)(1)



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D. Liabilities

       Text pp. 442-478

       I.R.C. ' 108(a)(1)(D), (c); I.R.C. ' 1001; I.R.C. ' 1012; I.R.C. ' 1016(a)(2)
       Glance at I.R.C. ' 465; 469
       Treas. Reg. ' 1.1001-2 (pay attention to the examples)

E. Characterization

       Text pp. 479-491, 516-527 (problems TBD)

       I.R.C. ' 1(h); I.R.C. ' 1202(a); I.R.C. ' 1211(b), I.R.C. ' 1212(b)(1), I.R.C. ' 1221,
       I.R.C. ' 1222, I.R.C. ' 1231(a)(1)-(3), (b)(1); I.R.C. ' 1245(a)(1)-(3), (b)(1)-(4), (d)

F. Nonrecognition Transactions

       1-2. Gain on Residences and Like-Kind Exchanges

       Text pp. 529-538 (problems TBD)

       I.R.C. ' 121; I.R.C. ' 1001(c); I.R.C. ' 1031
       Treas. Reg. '1.1031(a)-1(d), -2

       3. Deferred Payment Sales

       Text pp. 538-543 (problem 1 only)

       I.R.C. ' 453(a)-(d); I.R.C. ' 453A(a)-(c); I.R.C. ' 453B(a); I.R.C. ' 1272; I.R.C. ' 1274;
       1274A(a), (b)
       Treas. Reg. '15a.453-1(a)-(b)




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