Introduction to Taxation Ch01

Introduction to Taxation Ch01 - CHAPTER 1 INTRODUCTION TO...

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CHAPTER 1 INTRODUCTION TO TAXATION SOLUTIONS TO PROBLEM MATERIALS Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 1 Effect of state and local taxes on decision making Unchanged 1 2 History of Federal income tax Unchanged 2 3 Tax structure Unchanged 3 4 Use taxes Unchanged 4 5 Inheritance and estate taxes compared Unchanged 5 6 Cumulative nature of the Federal gift tax Unchanged 6 7 Federal gift tax and use of annual exclusions Unchanged 7 8 Advantage of Federal gift tax election for spouses to Unchanged 8 split gifts 9 Ethics problem Unchanged 9 10 Issue recognition Unchanged 10 11 Issue recognition Unchanged 11 12 Issue recognition New 13 Ad-valorem on realty: effect of tax holiday New 14 Proportional versus progressive tax Unchanged 14 15 FICA and FUTA compared Unchanged 15 16 Issue recognition Unchanged 16 17 Issue recognition Unchanged 17 18 General sales tax: excluded items Modified 18 19 Income tax computation Modified 19 20 Entity choice Unchanged 20 21 Entity choice Unchanged 21 22 Implicit tax Unchanged 22 23 Tax rate determination Unchanged 23 24 Tax rate determination Unchanged 24 25 Justification for annual exclusion New 26 Justification for several tax provisions Unchanged 27 Economic and social considerations: home ownership Unchanged 27 28 Wherewithal to pay Modified 28 29 Mitigating the effect of the annual accounting Unchanged 29 period concept 30 Coping with inflation: indexation procedure Unchanged 30 1-1
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1-2 2003 Entities Volume/Solutions Manual Status: Q/P Question/ Present in Prior Problem Topic Edition Edition 31 Internet activity New 32 VAT versus national sales tax: expected taxpayer Unchanged 32 compliance compared Bridge Discipline Problem 1 Bridge to Economics Unchanged 1 PROBLEM MATERIAL 1. Some tax considerations Aqua should investigate include the following: State and local income taxes. State and local sales taxes. State and local property taxes. Many such taxes could affect any cost-of-living differential. pp. 1-5, 1-12, 1-13, and 1-18 2. This is not the case. During the Civil War, both the Federal Union and the Confederate States of America had an income tax. Furthermore, an income tax was reenacted in 1894. It was this tax that was held to be unconstitutional by the U. S. Supreme Court and ultimately led to the passage of the Sixteenth Amendment. pp. 1-15 to 1-18 3. Except for the Federal estate and gift taxes, all excise taxes are proportional. This is also the case with ad valorem property taxes. Besides the Federal estate and gift taxes, income taxes are progressive. pp. 1-4 and 1-17 4. Jim probably will be required to pay the Washington use tax if, and when, he applies for Washington license plates. In this case, the use tax probably is the same amount as the Washington sales tax. p. 1-5 and Example 5 5. An inheritance tax is a tax on the right to receive property due to the death of another. As such it is a tax on the heir. An estate tax is a tax on the right to pass property by death. As
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This note was uploaded on 01/24/2010 for the course ACCT 44 taught by Professor Smithysmith during the Spring '10 term at DeVry Chicago.

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Introduction to Taxation Ch01 - CHAPTER 1 INTRODUCTION TO...

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