South-Western Federal Taxation 2026 — Comprehensive 49th Edition
SOUTH-WESTERN FEDERAL TAXATION 2026: COMPREHENSIVE 49TH EDITION (ALL
30 CHAPTERS) | COMPLETE TEST BANK AND STUDY GUIDE
SOUTH-WESTERN
FEDERAL TAXATION 2026
COMPREHENSIVE • 49TH EDITION
David M. Maloney | William A. Raabe | James C. Young | Annette Nellen
Cengage Learning | 2026
COMPREHENSIVE VOLUME — ALL 30 CHAPTERS
Individual Taxation | Business Entities | Special Topics | Tax
Research
TABLE OF CONTENTS
PART 1: INTRODUCTION TO TAXATION
Chapter 1 An Introduction to Taxation and Understanding the Federal
Tax Law
Chapter 2 Working with the Tax Law
Chapter 3 Tax Formula and Tax Liability Computations
PART 2: GROSS INCOME
Chapter 4 Gross Income: Concepts and Inclusions
Chapter 5 Gross Income: Exclusions
© 2026 Cengage Learning. All rights reserved. Page
,South-Western Federal Taxation 2026 — Comprehensive 49th Edition
PART 3: DEDUCTIONS AND LOSSES
Chapter 6 Deductions and Losses: In General
Chapter 7 Deductions and Losses: Certain Business Expenses and
Losses
Chapter 8 Depreciation, Cost Recovery, Amortization, and Depletion
Chapter 9 Deductions: Employee and Self-Employed-Related Expenses
Chapter 10 Deductions and Losses: Certain Itemized Deductions
Chapter 11 Investor Losses
PART 4: SPECIAL TAX COMPUTATION METHODS, TAX CREDITS,
AND PAYMENT
Chapter 12 Alternative Minimum Tax
Chapter 13 Tax Credits and Payment Procedures
PART 5: PROPERTY TRANSACTIONS
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: Section 1231 and Recapture
Provisions
PART 6: DEFERRED COMPENSATION AND RETIREMENT PLANS
Chapter 18 Accounting Periods and Methods
Chapter 19 Deferred Compensation
PART 7: CORPORATIONS
Chapter 20 Corporations: Introduction and Operating Rules
Chapter 21 Corporations: Earnings and Profits and Dividend
Distributions
Chapter 22 Corporations: Redemptions and Liquidations
Chapter 23 Corporations: Reorganizations
Chapter 24 Consolidated Tax Returns
PART 8: FLOW-THROUGH ENTITIES
Chapter 25 Partnerships: Formation and Operation
Chapter 26 Partnerships: Distributions, Transfer of Interests, and
Terminations
© 2026 Cengage Learning. All rights reserved. Page
,South-Western Federal Taxation 2026 — Comprehensive 49th Edition
Chapter 27 S Corporations
PART 9: FAMILY TAX PLANNING
Chapter 28 The Federal Gift and Estate Taxes
Chapter 29 Income Taxation of Trusts and Estates
PART 10: SPECIAL TOPICS
Chapter 30 Multistate Corporate Taxation
© 2026 Cengage Learning. All rights reserved. Page
, South-Western Federal Taxation 2026 — Comprehensive 49th Edition
CHAPTER 1
An Introduction to Taxation and Understanding the Federal Tax Law
The History, Structure, and Policy Foundations of U.S. Taxation
Learning Objectives
After completing this chapter, you will be able to:
• Understand the history and evolution of the U.S. federal income tax
system
• Identify the primary sources of federal tax revenue
• Describe the structure and administration of the Internal Revenue
Code
• Explain the economic, social, and political influences on tax law
• Apply the tax formula for individual taxpayers
• Distinguish between tax avoidance and tax evasion
1.1 History of U.S. Federal Taxation
The United States federal income tax system has undergone substantial
evolution since the enactment of the Sixteenth Amendment to the
Constitution in 1913, which granted Congress the power to levy taxes on
income from whatever source derived. Prior to this amendment, the federal
government relied primarily on tariffs and excise taxes as its main sources
of revenue.
The Revenue Act of 1913 established the modern framework for individual
income taxation, imposing a 1% normal tax plus a surtax ranging from 1%
to 6% on high incomes. During World War I and World War II, tax rates
were dramatically increased to finance wartime expenditures. The Revenue
Act of 1942 transformed the income tax from a class tax to a mass tax by
significantly lowering exemption thresholds.
The Internal Revenue Code of 1954 represented a complete recodification
of the tax law, followed by the Tax Reform Act of 1986—often considered
the most significant tax reform in modern history—which broadened the tax
base while lowering statutory rates. The Tax Cuts and Jobs Act of 2017
(TCJA) introduced the most sweeping changes since 1986, reducing
corporate tax rates, modifying individual rates, and significantly altering
many deduction provisions.
© 2026 Cengage Learning. All rights reserved. Page
SOUTH-WESTERN FEDERAL TAXATION 2026: COMPREHENSIVE 49TH EDITION (ALL
30 CHAPTERS) | COMPLETE TEST BANK AND STUDY GUIDE
SOUTH-WESTERN
FEDERAL TAXATION 2026
COMPREHENSIVE • 49TH EDITION
David M. Maloney | William A. Raabe | James C. Young | Annette Nellen
Cengage Learning | 2026
COMPREHENSIVE VOLUME — ALL 30 CHAPTERS
Individual Taxation | Business Entities | Special Topics | Tax
Research
TABLE OF CONTENTS
PART 1: INTRODUCTION TO TAXATION
Chapter 1 An Introduction to Taxation and Understanding the Federal
Tax Law
Chapter 2 Working with the Tax Law
Chapter 3 Tax Formula and Tax Liability Computations
PART 2: GROSS INCOME
Chapter 4 Gross Income: Concepts and Inclusions
Chapter 5 Gross Income: Exclusions
© 2026 Cengage Learning. All rights reserved. Page
,South-Western Federal Taxation 2026 — Comprehensive 49th Edition
PART 3: DEDUCTIONS AND LOSSES
Chapter 6 Deductions and Losses: In General
Chapter 7 Deductions and Losses: Certain Business Expenses and
Losses
Chapter 8 Depreciation, Cost Recovery, Amortization, and Depletion
Chapter 9 Deductions: Employee and Self-Employed-Related Expenses
Chapter 10 Deductions and Losses: Certain Itemized Deductions
Chapter 11 Investor Losses
PART 4: SPECIAL TAX COMPUTATION METHODS, TAX CREDITS,
AND PAYMENT
Chapter 12 Alternative Minimum Tax
Chapter 13 Tax Credits and Payment Procedures
PART 5: PROPERTY TRANSACTIONS
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: Section 1231 and Recapture
Provisions
PART 6: DEFERRED COMPENSATION AND RETIREMENT PLANS
Chapter 18 Accounting Periods and Methods
Chapter 19 Deferred Compensation
PART 7: CORPORATIONS
Chapter 20 Corporations: Introduction and Operating Rules
Chapter 21 Corporations: Earnings and Profits and Dividend
Distributions
Chapter 22 Corporations: Redemptions and Liquidations
Chapter 23 Corporations: Reorganizations
Chapter 24 Consolidated Tax Returns
PART 8: FLOW-THROUGH ENTITIES
Chapter 25 Partnerships: Formation and Operation
Chapter 26 Partnerships: Distributions, Transfer of Interests, and
Terminations
© 2026 Cengage Learning. All rights reserved. Page
,South-Western Federal Taxation 2026 — Comprehensive 49th Edition
Chapter 27 S Corporations
PART 9: FAMILY TAX PLANNING
Chapter 28 The Federal Gift and Estate Taxes
Chapter 29 Income Taxation of Trusts and Estates
PART 10: SPECIAL TOPICS
Chapter 30 Multistate Corporate Taxation
© 2026 Cengage Learning. All rights reserved. Page
, South-Western Federal Taxation 2026 — Comprehensive 49th Edition
CHAPTER 1
An Introduction to Taxation and Understanding the Federal Tax Law
The History, Structure, and Policy Foundations of U.S. Taxation
Learning Objectives
After completing this chapter, you will be able to:
• Understand the history and evolution of the U.S. federal income tax
system
• Identify the primary sources of federal tax revenue
• Describe the structure and administration of the Internal Revenue
Code
• Explain the economic, social, and political influences on tax law
• Apply the tax formula for individual taxpayers
• Distinguish between tax avoidance and tax evasion
1.1 History of U.S. Federal Taxation
The United States federal income tax system has undergone substantial
evolution since the enactment of the Sixteenth Amendment to the
Constitution in 1913, which granted Congress the power to levy taxes on
income from whatever source derived. Prior to this amendment, the federal
government relied primarily on tariffs and excise taxes as its main sources
of revenue.
The Revenue Act of 1913 established the modern framework for individual
income taxation, imposing a 1% normal tax plus a surtax ranging from 1%
to 6% on high incomes. During World War I and World War II, tax rates
were dramatically increased to finance wartime expenditures. The Revenue
Act of 1942 transformed the income tax from a class tax to a mass tax by
significantly lowering exemption thresholds.
The Internal Revenue Code of 1954 represented a complete recodification
of the tax law, followed by the Tax Reform Act of 1986—often considered
the most significant tax reform in modern history—which broadened the tax
base while lowering statutory rates. The Tax Cuts and Jobs Act of 2017
(TCJA) introduced the most sweeping changes since 1986, reducing
corporate tax rates, modifying individual rates, and significantly altering
many deduction provisions.
© 2026 Cengage Learning. All rights reserved. Page
