Table of Contents

Cover

Title Page

About the Author

Notices

About CALI eLangdell Press

Preface

Table of Cases

Chapter 1: The Government Raises Money: Introduction to Some Basic Concepts of Taxes and Taxing Income

I. Introduction to Some Basic Concepts

II. Taxing Income

III. Some Definitions

IV. Not All Income Is Taxed Alike

V. Layout of the Code

VI. Illustration of the Tax Formula

VII. Sources of Tax Law and the Role of Courts

VIII. Some Income Tax Policy and Some Income Tax Principles

IX. What Is Income?

Wrap-up Questions for Chapter 1

Chapter 2: What Is Gross Income: Section 61 and the Sixteenth Amendment

I. The Constitutional and Statutory Definitions of “Gross Income”

II. The Constitutional and Statutory Definitions of “Gross Income:” Accessions to Wealth

A. Some Recurring Themes

B. Section 61(a)(3): Gains Derived from Dealings in Property

C. Barter

D. Improvements to Leaseholds and the Time Value of Money

E. Imputed Income

III. The Constitutional and Statutory Definitions of “Gross Income:” Realization

IV. The Constitutional and Statutory Definitions of “Gross Income:” Dominion and Control

Wrap-up Questions for Chapter 2

Chapter 3: Exclusions from Gross Income

I. The Society and Government that We Want

A. Gifts and Inheritances, § 102, and Related Basis Rules, §§ 1014, 1015

B. Exclusion of Gain from Sale of Principal Residence: § 121

C. Interest on State and Local Bonds: § 103

D. Scholarships: § 117

E. Rental Value of Parsonages: § 107

II. Social Benefits

A. Life Insurance Death Benefits: § 101

B. Compensation for Injuries or Sickness: §§ 104, 105, 106

C. Social Security: § 86

D. Unemployment Benefits: § 85

III. Employment-Based Exclusions from Gross Income

A. Group Term Life Insurance: § 79

B. Educational Assistance Programs: § 127

C. Dependent Care Assistance Programs: § 129

D. Employer Contributions to Accident and Health Plans: § 106

E. Meals or Lodging Furnished for the Convenience of the Employer: § 119

F. Employee Fringe Benefits: § 132

G. Cafeteria Plans, § 125

Wrap-up Questions for Chapter 3

Chapter 4: Loans and Cancellation of Indebtedness

I. Tax Consequences of Borrowing Money

II. Cancellation of Indebtedness

III. Is It a Loan? Is There an Accession to Wealth?

IV. Section 108(a)’s Other Provisions

V. Transactions Involving Property Subject to a Loan

VI. Transactions Treated as Loans

Wrap-up Questions for Chapter 4

Chapter 5: Assignment of Income

I. Compensation for Services

II. Income Splitting and the Joint Return

III. Income Derived from Property

IV. Interest Free Loans and Unstated Interest

Wrap-Up Questions for Chapter 5

Chapter 6: Deductions: Business Expenses

I. Expense or Capital

A. Expense or Capital: Cost of Constructing a Tangible Capital Asset

B. Expense or Capital: Cost of “Constructing” an Intangible Capital Asset

C. Expense or Capital: Protecting Stock Investment or Protecting Employment

D. Expense or Capital: Repair vs. Improvement

II. Deductibility Under §§ 162 or 212

A. Travel Expenses

B. Reasonable Salaries

C. Ordinary and Necessary Expenses

D. Special Rules to Encourage Manufacturing and Exploitation of Natural Resources

III. Depreciation, Amortization, and Cost Recovery

Wrap-Up Questions for Chapter 6

Chapter 7: Personal Deductions

I. “Tax Expenditures”

A. Charitable Contributions

B. Taxes Paid

II. Denial of Discretion in Choosing How or What to Consume

A. Medical and Dental Expenses

B. Casualty Losses

III. Creating a More Efficient and Productive Economy

A. Moving Expenses

B. Credits Against Tax

Wrap-Up Questions for Chapter 7

Chapter 8: Tax Consequences of Divorce and Intra-Family Transactions

I. Introduction

II. Before Marriage

III. During Marriage

A. Tax Consequences of Support Obligations

B. Filing Status

C. Dependents

D. Intra-Family Transactions

IV. After Marriage: Tax Consequences of Divorce

A. Alimony and Property Settlement

B. Child Support

Wrap-Up Questions for Chapter 8

Chapter 9: Timing of Income and Deductions: Annual Accounting and Accounting Principles

I. Annual Accounting

II. Deferral Mechanisms

A. Realization

B. Installment Method and Other Pro-rating of Basis

C. Deferral Until Consumption

III. Basic Accounting Rules

A. Cash Method

B. Accrual Method

C. Inventory

Wrap-Up Questions for Chapter 9

Chapter 10: Character of Income and Computation of Tax

I. Capital Gain

A. “Capital Asset:” Property Held by the Taxpayer

B. Other Terms Relating to Capital Gains and Losses: Long Term and Short Term Gains and Losses

C. Deductibility of Capital Losses and Capital Loss Carryforwards

D. Computation of Tax

II. Sections 1245 and 1250: Depreciation Recapture

A. Section 1245

B. Section 1250

III. Section 1231: Some Limited Mismatching

IV. Some Basis Transfer Transactions: §§ 1031, 1033

V. More Matching

A. Matching Tax-Exempt Income and Its Costs

B. More Matching: Investment Interest

C. Passive Activities Losses and Credits

D. General Comment about Matching Principles

Wrap-Up Questions for Chapter 10

Footnotes

All CALI Lessons


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