,ACCESSgTestgBankgforgSouthgWesterngFederalgTaxationg2023gCorporationsgPart
nershipsgEstatesgandgTrustsg46thgEditiongRaabe
Instructor’sgGuide:gRaabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,gSWFTg2023gVolumeg2:gCorporations,gPartnerships,
g Estatesg &g Trusts,g 9780357719961;g Chapterg 1:g Understandingg andg Workingg withg theg Federalg Ta
xg Law
Instructor’s Guide g
Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,gSWFTg2023gVolumeg2:gCorporations,gPartner
ships,gEstatesg&gTrusts,g9780357719961;gChapterg1:gUnderstandinggandgWorkinggwithgthegFedera
lgTaxgLaw
Table of Contents
g g
Chapterg Objectives ..................................................................................................................... 2
Chapterg Outline .......................................................................................................................... 2
Discussiong Questions ............................................................................................................... 16
VideogInformation ...................................................................................................................... 18
RelatedgCengagegVideogContent.............................................................................................................. 18
©g2023gCengage.gAllgRightsgReserved.gMaygnotgbegscanned,gcopiedgorgduplicated,gorgpostedgtogagpubliclygac 1
cessible
website,gingwholegorgingpa
rt. mynursytest.store
,ACCESSgTestgBankgforgSouthgWesterngFederalgTaxationg2023gCorporationsgPart
nershipsgEstatesgandgTrustsg46thgEditiongRaabe
Instructor’sgGuide:gRaabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,gSWFTg2023gVolumeg2:gCorporations,gPartnerships,
g Estatesg &g Trusts,g 9780357719961;g Chapterg 1:g Understandingg andg Workingg withg theg Federalg Ta
xg Law
Chapter Objectives
g
Thegfollowinggobjectivesgaregaddressedgingthisgchapter:
1.1 DiscussgthegimportancegofgrevenuegneedsgasgangobjectivegofgFederalgtaxglaw.
1.2 Demonstrategtheginfluencegofgeconomic,gsocial,gequity,gandgpoliticalgconsideration
sgongthegdevelopmentgofgthegtaxglaw.
1.3 ExplainghowgthegIRS,gasgthegprotectorgofgthegrevenue,ghasgaffectedgtaxglaw.
1.4 Recognizeg theg roleg ofg theg courtsg ing interpretingg andg shapingg taxg law.
1.5 Identifygtaxglawgsources—statutory,gadministrative,gandgjudicial.
1.6 Listgandgassessgtaxglawg sources.
1.7 Demonstrateg theg abilityg tog conductg taxg research.
1.8 Assessgthegvaliditygandgweightgofgtaxglawgsources.
1.9 Describegvariousgtaxgplanninggprocedures.
1.10 ExplaingthegrolegofgtaxationgongthegCPAgexamination.
[returngtogtop]
Chapter Outline g
Ingthegoutlinegbelow,geachgelementgincludesgreferencesg(ingparentheses)gtogrelatedgcontent.g“COg
CH.##”grefersgtogthegchaptergobjective;g“PPTgSlideg#”grefersgtogthegslidegnumbergingthegPowerPointg
deckgforgthisgchapterg(providedgingthegPowerPointsgsectiongofgthegInstructorgResourcegCenter);gan
d,gasgapplicablegforgeachgdiscipline,gaccreditationgorgcertificationgstandardsg(“BLg1.3.3”).
IntroducegthegchaptergandgusegthegIcegBreakergingthegPPTgifgdesired,gandgifgonegisgprovidedgforgthis
gchapter.gReviewglearninggobjectivesgforgChapterg1.g(PPTgSlidesg2–3).
I. ThegWhysgofgthegTaxgLaw
i.
WhilegthegprimarygobjectivegofgFederalgtaxglawgisgraisinggrevenue,gthisg
isgnotgthegsolegobjectivegofgtaxglaws.
1. Importantgingexplaininggvariousgprovisionsgfoundgingtheglawgar
egeconomic,gsocial,gequity,gandgpoliticalgconsiderations.
2. ThegTreasurygDepartment,gthegIRS,gandgthegcourtsgalsoghav
egsignificantgimpactsgongthegevolutiongofgFederalgtaxglaw.
a. RevenuegNeedsg(1.1,gPPTgSlideg6)
i. Raisingg revenueg tog fundg theg costg ofg governmentg operationsg isg theg k
eygfactorgingstructuringgagtaxgsystem.
ii. Overgthegpastgcentury,gthegnationalgdebtghasgbeengincreasinggsigni
ficantly,greachinggmoregthang$28.8gtrillion,gorgaboutg$86,000gpergciti
zen,gingNovemberg2021.
©g2023gCengage.gAllgRightsgReserved.gMaygnotgbegscanned,gcopiedgorgduplicated,gorgpostedgtogagpubliclygac 2
cessible
website,gingwholegorgingpa
rt. mynursytest.store
, ACCESSgTestgBankgforgSouthgWesterngFederalgTaxationg2023gCorporationsgPart
nershipsgEstatesgandgTrustsg46thgEditiongRaabe
Instructor’sg Guide:g Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,g SWFTg 2023g Volumeg 2:g Corporations,g Partnerships,
Estatesg &g Trusts,g 9780357719961;g Chapterg 1:g Understandingg andg Workingg withg theg Federalg Taxg Law
iii. Whengenactinggtaxglegislation,gCongressgisgoftengguidedgbygthegconce
ptgofgrevenuegneutrality.
1. Changesgingthegtaxglawgshouldgneithergincreasegnorgdecreasegthegn
etgrevenuesgreceivedgbygtheggovernment.
2. Theregareglikelygtogbegbothg“winners”g(taxpayersgwhogseegagreducti
ongingtaxesgpaid)gandg“losers”g(taxpayersgwhogseegangincreasegingt
axesgpaid).
b. EconomicgConsiderationsg(1.2,gPPTgSlidesg7–16)
i. Taxglawgisgoftengusedgtogaccomplishgeconomicgobjectives.
ii. ControlgofgthegEconomy.gCongressghasgusedgthegtaxgdepreciationgsyste
mgasgonegmeansgofgcontrollinggthegeconomy.
1. Shortergassetglivesgandgacceleratedgmethodsgshouldgencourag
egadditionalginvestmentsgingdepreciablegbusinessgproperty.
2. Longergassetglivesgandgthegusegofgstraight-
linegdepreciationgshouldgdiscouragegcapitalgoutlays.
3. Congressgalsogusesgincentivesglikegimmediategexpensingg(§g179)gan
dgbonusgdepreciationgtogstimulategthegeconomygwhengneeded.
4. Whengtaxgratesgareglowered,gtaxpayersgretaingmoneygthatgcang
begusedgforgothergpurposes.
5. IfgCongressgisgusinggthegconceptgofgrevenuegneutrality,grategredu
ctionsgmaygbegoffsetgbygagreductiongorgeliminationgofgdeductionsg
orgcredits.gAsgagresult,glowergratesgdognotgalwaysgmeanglowergtax
es.
iii. EncouragementgofgCertaingActivities.
1. Researchgandgdevelopmentgexpendituresgcangbegdeductedgingth
egyeargincurredgor,galternatively,gcapitalizedgandgamortizedgover
gagperiodgofg60gmonthsgorgmore.gThesegexpendituresgalsogmayg
generategagtaxgcredit.
2. Inventionsg(includinggtechnologicalginnovations)galsogaregencourage
dgundergtaxglaw.gPatentsgcangqualifygasgcapitalgassets,gandgundergc
ertaingconditions,gtheirgdispositiongautomaticallygcarriesglong-
termgcapitalggaingtreatment.
3. Ecologygisgencouragedgbygallowinggpollutiongcontrolgfacilitiesgtogb
egamortizedgoverg60gmonthsg(rathergthangovergtheg39-
yeargperiodgrequiredgforgmostgbusinessgbuildings).
4. Saving,gwhichgleadsgtogcapitalgformation,gisgstimulatedgbygincentive
sgtogincreasegprivategretirementgplans.gThegencouragementgofgpriv
ate-
gsectorgpensiongplansgcangbegjustifiedgundergsocialgconsiderationsg
asgwell.
iv. EncouragementgofgCertaingIndustries.
1. Taxglawsgfavorgfarminggbygallowinggexpensinggofgsoilgandgwat
ergconservationgandgfertilizers.gAlso,gfarmersgcangdefergthegg
©g2023gCengage.gAllgRightsgReserved.gMaygnotgbegscanned,gcopiedgorgduplicated,gorgpostedgtogagpubliclygac 3
cessible
website,gingwholegorgingpa
rt. mynursytest.store
nershipsgEstatesgandgTrustsg46thgEditiongRaabe
Instructor’sgGuide:gRaabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,gSWFTg2023gVolumeg2:gCorporations,gPartnerships,
g Estatesg &g Trusts,g 9780357719961;g Chapterg 1:g Understandingg andg Workingg withg theg Federalg Ta
xg Law
Instructor’s Guide g
Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,gSWFTg2023gVolumeg2:gCorporations,gPartner
ships,gEstatesg&gTrusts,g9780357719961;gChapterg1:gUnderstandinggandgWorkinggwithgthegFedera
lgTaxgLaw
Table of Contents
g g
Chapterg Objectives ..................................................................................................................... 2
Chapterg Outline .......................................................................................................................... 2
Discussiong Questions ............................................................................................................... 16
VideogInformation ...................................................................................................................... 18
RelatedgCengagegVideogContent.............................................................................................................. 18
©g2023gCengage.gAllgRightsgReserved.gMaygnotgbegscanned,gcopiedgorgduplicated,gorgpostedgtogagpubliclygac 1
cessible
website,gingwholegorgingpa
rt. mynursytest.store
,ACCESSgTestgBankgforgSouthgWesterngFederalgTaxationg2023gCorporationsgPart
nershipsgEstatesgandgTrustsg46thgEditiongRaabe
Instructor’sgGuide:gRaabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,gSWFTg2023gVolumeg2:gCorporations,gPartnerships,
g Estatesg &g Trusts,g 9780357719961;g Chapterg 1:g Understandingg andg Workingg withg theg Federalg Ta
xg Law
Chapter Objectives
g
Thegfollowinggobjectivesgaregaddressedgingthisgchapter:
1.1 DiscussgthegimportancegofgrevenuegneedsgasgangobjectivegofgFederalgtaxglaw.
1.2 Demonstrategtheginfluencegofgeconomic,gsocial,gequity,gandgpoliticalgconsideration
sgongthegdevelopmentgofgthegtaxglaw.
1.3 ExplainghowgthegIRS,gasgthegprotectorgofgthegrevenue,ghasgaffectedgtaxglaw.
1.4 Recognizeg theg roleg ofg theg courtsg ing interpretingg andg shapingg taxg law.
1.5 Identifygtaxglawgsources—statutory,gadministrative,gandgjudicial.
1.6 Listgandgassessgtaxglawg sources.
1.7 Demonstrateg theg abilityg tog conductg taxg research.
1.8 Assessgthegvaliditygandgweightgofgtaxglawgsources.
1.9 Describegvariousgtaxgplanninggprocedures.
1.10 ExplaingthegrolegofgtaxationgongthegCPAgexamination.
[returngtogtop]
Chapter Outline g
Ingthegoutlinegbelow,geachgelementgincludesgreferencesg(ingparentheses)gtogrelatedgcontent.g“COg
CH.##”grefersgtogthegchaptergobjective;g“PPTgSlideg#”grefersgtogthegslidegnumbergingthegPowerPointg
deckgforgthisgchapterg(providedgingthegPowerPointsgsectiongofgthegInstructorgResourcegCenter);gan
d,gasgapplicablegforgeachgdiscipline,gaccreditationgorgcertificationgstandardsg(“BLg1.3.3”).
IntroducegthegchaptergandgusegthegIcegBreakergingthegPPTgifgdesired,gandgifgonegisgprovidedgforgthis
gchapter.gReviewglearninggobjectivesgforgChapterg1.g(PPTgSlidesg2–3).
I. ThegWhysgofgthegTaxgLaw
i.
WhilegthegprimarygobjectivegofgFederalgtaxglawgisgraisinggrevenue,gthisg
isgnotgthegsolegobjectivegofgtaxglaws.
1. Importantgingexplaininggvariousgprovisionsgfoundgingtheglawgar
egeconomic,gsocial,gequity,gandgpoliticalgconsiderations.
2. ThegTreasurygDepartment,gthegIRS,gandgthegcourtsgalsoghav
egsignificantgimpactsgongthegevolutiongofgFederalgtaxglaw.
a. RevenuegNeedsg(1.1,gPPTgSlideg6)
i. Raisingg revenueg tog fundg theg costg ofg governmentg operationsg isg theg k
eygfactorgingstructuringgagtaxgsystem.
ii. Overgthegpastgcentury,gthegnationalgdebtghasgbeengincreasinggsigni
ficantly,greachinggmoregthang$28.8gtrillion,gorgaboutg$86,000gpergciti
zen,gingNovemberg2021.
©g2023gCengage.gAllgRightsgReserved.gMaygnotgbegscanned,gcopiedgorgduplicated,gorgpostedgtogagpubliclygac 2
cessible
website,gingwholegorgingpa
rt. mynursytest.store
, ACCESSgTestgBankgforgSouthgWesterngFederalgTaxationg2023gCorporationsgPart
nershipsgEstatesgandgTrustsg46thgEditiongRaabe
Instructor’sg Guide:g Raabe/Young/Nellen/Cripe/Lassar/Persellin/Cuccia,g SWFTg 2023g Volumeg 2:g Corporations,g Partnerships,
Estatesg &g Trusts,g 9780357719961;g Chapterg 1:g Understandingg andg Workingg withg theg Federalg Taxg Law
iii. Whengenactinggtaxglegislation,gCongressgisgoftengguidedgbygthegconce
ptgofgrevenuegneutrality.
1. Changesgingthegtaxglawgshouldgneithergincreasegnorgdecreasegthegn
etgrevenuesgreceivedgbygtheggovernment.
2. Theregareglikelygtogbegbothg“winners”g(taxpayersgwhogseegagreducti
ongingtaxesgpaid)gandg“losers”g(taxpayersgwhogseegangincreasegingt
axesgpaid).
b. EconomicgConsiderationsg(1.2,gPPTgSlidesg7–16)
i. Taxglawgisgoftengusedgtogaccomplishgeconomicgobjectives.
ii. ControlgofgthegEconomy.gCongressghasgusedgthegtaxgdepreciationgsyste
mgasgonegmeansgofgcontrollinggthegeconomy.
1. Shortergassetglivesgandgacceleratedgmethodsgshouldgencourag
egadditionalginvestmentsgingdepreciablegbusinessgproperty.
2. Longergassetglivesgandgthegusegofgstraight-
linegdepreciationgshouldgdiscouragegcapitalgoutlays.
3. Congressgalsogusesgincentivesglikegimmediategexpensingg(§g179)gan
dgbonusgdepreciationgtogstimulategthegeconomygwhengneeded.
4. Whengtaxgratesgareglowered,gtaxpayersgretaingmoneygthatgcang
begusedgforgothergpurposes.
5. IfgCongressgisgusinggthegconceptgofgrevenuegneutrality,grategredu
ctionsgmaygbegoffsetgbygagreductiongorgeliminationgofgdeductionsg
orgcredits.gAsgagresult,glowergratesgdognotgalwaysgmeanglowergtax
es.
iii. EncouragementgofgCertaingActivities.
1. Researchgandgdevelopmentgexpendituresgcangbegdeductedgingth
egyeargincurredgor,galternatively,gcapitalizedgandgamortizedgover
gagperiodgofg60gmonthsgorgmore.gThesegexpendituresgalsogmayg
generategagtaxgcredit.
2. Inventionsg(includinggtechnologicalginnovations)galsogaregencourage
dgundergtaxglaw.gPatentsgcangqualifygasgcapitalgassets,gandgundergc
ertaingconditions,gtheirgdispositiongautomaticallygcarriesglong-
termgcapitalggaingtreatment.
3. Ecologygisgencouragedgbygallowinggpollutiongcontrolgfacilitiesgtogb
egamortizedgoverg60gmonthsg(rathergthangovergtheg39-
yeargperiodgrequiredgforgmostgbusinessgbuildings).
4. Saving,gwhichgleadsgtogcapitalgformation,gisgstimulatedgbygincentive
sgtogincreasegprivategretirementgplans.gThegencouragementgofgpriv
ate-
gsectorgpensiongplansgcangbegjustifiedgundergsocialgconsiderationsg
asgwell.
iv. EncouragementgofgCertaingIndustries.
1. Taxglawsgfavorgfarminggbygallowinggexpensinggofgsoilgandgwat
ergconservationgandgfertilizers.gAlso,gfarmersgcangdefergthegg
©g2023gCengage.gAllgRightsgReserved.gMaygnotgbegscanned,gcopiedgorgduplicated,gorgpostedgtogagpubliclygac 3
cessible
website,gingwholegorgingpa
rt. mynursytest.store
