Principles of Business Taxation (2019)

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.

Principles of Business Taxation is revised annually by a panel of expert tax practitioners and educators. All chapters are reviewed as well as the ancillary materials and new test bank questions are added with each annual edition.

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 oper