The CCH Principles of Business Taxation (2019) course approaches the study of taxation from the perspective of the student who will become a business person faced with decisions that are inevitably affected by tax considerations. This perspective leads to a very different coverage in this textbook -- coverage that is useful for accounting, finance and general business majors. The new edition focuses on the central concepts that build our tax framework and avoids small exceptions. Students studying with this book will confidently master the critical underpinnings of federal taxation and gain a stronger, more solid understanding of federal tax principles.
Many items that pertain specifically to businesses (for example, inventory valuation issues) usually not discussed in a traditional undergraduate tax textbook are covered in this book. Although so many of the exclusions, deductions, and credits apply equally to individual and corporate taxpayers, this book focuses on the business perspective. An advantage to this approach is that most of the students who take only one course in taxation will learn how businesses are taxed and, in turn, will have a better appreciation for how taxes affect business decisions. Another advantage to this approach is that the topics dovetail into other business, finance and accounting course work.
The focus is on concepts and how taxes affect business decisions. This includes various business entities including closely held business, pass-through entities and sole proprietorships.
- PART I: OVERVIEW OF TAXES AND THE FEDERAL INCOME TAX SYSTEM
- Part I of the textbook introduces students to the concept of taxes to gain a better appreciation for why taxes exist and how taxes allow governments to provide goods and services. The discussion involves equity considerations, and introduces the "ability to pay" and "wherewithal to pay" concepts, among others. After providing students with a survey of the various taxes that governments impose, the federal income tax is discussed in detail, since it is the focus of this book. An overview of the taxable income formulas is provided, as well as a discussion of the concept of flow-through entities as a business structure. This discussion sets the groundwork for the rest of the book. The second half of this Part discusses sources of U.S. federal income tax laws -- the Internal Revenue Code, Treasury regulations and case law. In addition to introducing students to the various types of tax authority, the "hierarchy" of these sources is discussed along with a strong consideration of tax planning, which is crucial for successful business operation and tax research.
- PART II: FEDERAL TAXATION OF BUSINESS INCOME AND DEDUCTIONS
- Part II illustrates how businesses calculate taxable income starting with a discussion of accounting periods and methods, a more detailed overview of taxable income and how taxes are owed or refunded. The focus then shifts to a discussion of which items of income are taxed and which expenditures can be deducted against taxable income.
- PART III: TRANSACTIONS INVOLVING BUSINESS PROPERTY
- Part III provides a substantive discussion of the tax consequences of owning property, such as depreciation, gain/loss on disposal, and the rules pertaining to property transactions. A comparison of the financial accounting depreciation methods and tax laws is emphasized in the chapter.
- PART IV: CALCULATING TAX LIABILITY AND TAXES OWED
- Part IV discusses calculation of tax liability including discussions of net operating losses, AMT and other business tax liabilities. In addition, chapter 11 addresses the topic of tax credits, which function to reduce taxes owed. This part helps students gain an understanding of how the tax liability is calculated for corporations and for individuals or businesses who operate a business as a sole proprietorship or in the form of a pass-through entity such as a partnership, LLC, LLP or S corporation.
- PART V: SPECIFIC BUSINESS ENTITY ISSUES
- Part V discusses the tax laws unique to different business entities. This Part discusses corporate formation, distribution and other corporate tax issues. Part V also discusses the business tax structure and considerations for sole proprietorships and flow-through entities including S corporations. The tax rate structure is examined as well as the reduced tax rates that apply to qualified dividends and net capital gains. Part V also discusses tax planning issues and brings the student information that allows them to understand the significance of tax considerations in the operation of a business.
- PART VI: TAXATION OF INTERNATIONAL TRANSACTIONS
- Part VI introduces the student to the operation of U.S. taxation of international transactions. As business becomes increasingly global, virtually all business must consider issues of taxation in international transactions. Part VI addresses the tax structure of inbound transactions, effectively connected income, outbound transactions, foreign tax credits for individuals and business, tax status and more. This Part VI is a sound addition to Principles of Business Taxation and provides the student with a basic understanding of tax consequences affecting businesses involved in international transactions.
Principles of Business Taxation (2018) is now available in an eBook format which you can download to your computer instantly.