Inside tax law : what matters and why / Stephen Utz.
2011
KF6289 .U89 2011 (Map It)
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Details
Author
Title
Inside tax law : what matters and why / Stephen Utz.
Published
New York : Wolters Kluwer Law & Business, [2011]
Copyright
©2011
Call Number
KF6289 .U89 2011
ISBN
9780735594401 (pbk.)
0735594406 (pbk.)
0735594406 (pbk.)
Description
xx, 256 pages : illustrations ; 26 cm
System Control No.
(OCoLC)732318649
Note
Includes index.
Record Appears in
Gift
Gift of Prof. Marvin A. Chirelstein
Gift

The Arthur W. Diamond Law Library
Gift of Prof. Marvin A. Chirelstein
Table of Contents
Preface
xix
ch. 1
Getting Started: Basic Facts, Concepts, and Techniques
1
A.
The Lawyerly Approach to Tax Concepts
2
B.
Legal Materials
2
1.
Interpreting the Code
2
2.
Common-Law Principles
2
3.
Regulatory Process
3
4.
Tax Reform Issues
3
5.
Legislative History
4
6.
Judicial and Administrative Rulings
4
a.
Courts
4
b.
Administrative Law
5
7.
Constitutional Issues
7
8.
Filling in Forms?
7
C.
Importance of the Federal Income Tax in Revenue Terms
7
D.
Comparing Exclusions and Deductions
9
E.
Income Tax Rate Structures, Tax Equity, and Tax Neutrality
10
ch. 2
A First Look at Income
15
A.
How the Code's Skeletal Definition of Income Works
16
B.
Gross Income, Adjusted Gross Income, and Taxable Income
16
C.
The Background Notion of Income
18
1.
Income and Subjective Preference
18
2.
Income and Effort
18
3.
Receipt
19
4.
Receipt Plus the Right to Keep
19
5.
Links with Detailed Discussions in Later Chapters
20
D.
Other Theories of the Nature of Income
20
E.
Types of Income
22
ch. 3
Employee Pay and Perks
27
A.
In-Kind Benefits Connected with Employment
28
B.
Salary Paid Net of Income Tax
29
C.
Convenience of the Employer
32
D.
The Rationale
33
E.
Statutory Exclusions for Fringe Benefits
34
1.
Section 119
35
2.
Section 132-Other Fringe Benefit Exclusions
37
a.
No-Additional-Cost Fringe Benefits
37
b.
Qualified Employee Discounts
39
c.
Working Condition Fringe Benefits
40
d.
De Minimis Fringe Benefits
41
e.
Exclusions for Broad Benefits Offered to All Employees
41
F.
Employees' Home Offices
41
G.
Qualified Retirement and Profit-Sharing Plans
42
H.
Qualified Stock Options, Forfeitable Property Transfers, and Loans as Employee Benefits
42
ch. 4
Getting Your Own Back: Recoveries of Damages, Damage Settlements, Insurance Benefits, and More
45
A.
What "Recovery" Means in This Context
46
B.
The Development of Recovery Exclusion
47
1.
A Broad Exclusion for Fault-Based Recoveries: Clark v. Commissioner
47
C.
Statutory Treatment of Certain Recoveries
49
1.
Damages for Personal Physical Injury Excluded Under [§]104(a) (2)
49
2.
Tax Equity of These Exclusions
50
D.
Insurance Recoveries
50
E.
How Non-Death Benefits of Life Insurance Are Taxed
52
F.
Damages and Settlements
54
1.
Commissioner v. Glenshaw Glass Corporation
54
2.
Raytheon Production Corporation v. Commissioner
55
3.
Contingent Fees
55
G.
. Tax Treatment of Tenants' Improvements to Leaseholds
56
H.
Other Property Improved Without Realization
57
I.
"Recovery" of Basis
57
ch. 5
Gifts, Windfalls, and Other Haphazard Gains
61
A.
Fortuitous Accessions to Wealth in General
62
B.
Grassroots Rationale of the Gift Exclusion
62
1.
Theories of Income and the Case for Inclusion
62
2.
Taxing Gifts Would Destroy the Equation of Total Private Income with Social Product
63
3.
A Macroeconomic Reason for Excluding Gifts
63
4.
Distinguishing Gifts from Other Fortuitous Gains
64
5.
Intrafamily Gifts
64
C.
Cases on the Meaning of "Gift"
67
D.
Basis Issues Related to Gifts
68
E.
The Basis of Income and Residual Interests in Gift Property
71
F.
Gifts That Form Part of Other Transactions
74
G.
Net Gifts
74
H.
Prizes and Awards, Scholarships and Fellowships
76
ch. 6
Basis
79
A.
Fundamentals
80
B.
Early Recovery of Basis
82
C.
Tax Burdens on Property and Business Activities
87
D.
How Basis Affects Annual Accounting
88
E.
Adjusted Basis
89
F.
Property Used in a Trade or Business
90
ch. 7
Why Tax Timing Matters: The Value of Money over Time
93
A.
How Delayed Tax Liability Lowers the Tax Rate
94
B.
'Open Transaction' Treatment
96
C.
Cost Recovery in Different Kinds of Income-Earning Activity
98
D.
Realization and Time Value
99
E.
Inflation's Effect on the Value of Money over Time
100
F.
Installment Sale Treatment Revisited
101
G.
Correlation of Deductions with Income
101
H.
The Interactive Tax Treatment of Costs and Yields
101
I.
Further Illustrations of the Time Value of Money
103
1.
Growth of Money over Time
103
2.
Reversing the Process: Discounting to Present Value
103
J.
Tax Shelters Based on the Time Value of Money
104
ch. 8
Borrowing and Debt
109
A.
Rationale of Loan Treatment
110
B.
Interest on Debt
111
C.
Relief from Liability
112
D.
Cancellation of Debt
113
E.
Recourse and Nonrecourse Debt
114
F.
The Basis of Nonrecourse-Financed Property
115
G.
Original Issue Discount and Other Elusive Forms of Interest
120
ch. 9
Realization and Recognition
127
A.
The Structure of Section 1001 and Nonrecognition Provisions
128
B.
What Constitutes a Disposition?
128
1.
Securities and Similar Instruments
128
2.
Real Estate Interests
132
3.
Other Types of Property Modification or Improvement
133
C.
The Effect of Encumbrances and Liabilities on Amount Realized
134
D.
Nonrecognition and the Preservation of Tax Consequences
136
1.
Section 1031
136
a.
The Mechanics of Like-Kind Exchanges
136
b.
What Is "Like Kind"?
140
2.
Nonrecognition Contributions to Entity Capital
140
E.
Overriding Recognition Rules
140
1.
Recapture
140
2.
Short Sales and "Short Against the Box" Transactions
141
F.
Loss Recognition-Sections 165 and 267(a)(1)
142
G.
Realization and Receipt
143
ch. 10
Timing and Transactional Parity
147
A.
The Judicial Doctrines
147
1.
Constructive Receipt
148
2.
Economic Benefit
150
3.
Claim of Right
152
4.
Tax Benefit Rule
154
B.
Comparison of Claim of Right and Tax Benefit Adjustments
160
C.
Overlapping Application of the Judicial Doctrines
160
ch. 11
Fitting Families In
165
A.
Key Tax Issues Raised by Groups of Related Individuals
166
B.
Taxpayers' Expenses for Children and Elderly Dependents
168
1.
Medical Expenses
168
2.
Section 152
168
C.
The Joint Return and the Marriage Penalty
170
D.
Separation and Divorce
171
1.
Property Settlements
172
2.
Alimony
173
3.
Child Support
174
4.
Medical Expenses Paid for a Nondependent Child
174
5.
Survey of Divorce and Separation Payments
174
E.
Joint and Survivor Benefits from Qualified Plans
175
F.
Restrictions on Tax Items Related to Intrafamily Transactions
175
G.
Unresolved Family and Household Tax Issues
175
1.
Work in the Home
175
2.
Transfers Within Households and Among Relatives
176
ch. 12
Spending Money to Make Money: Business and Investment Deductions
179
A.
Expenses of Seeking Income Versus Personal Expenses
180
B.
The Broad Scheme of Business and Investment Deductions
180
C.
Ordinary and Necessary
183
D.
Personal Expenses Disguised as Profit-Oriented Expenses
184
1.
Hobbies
185
2.
Employee's Expenses for the Trade or Business of Being Employed
187
a.
Childcare and Similar Expenses
187
b.
Business Clothes
188
3.
Housing
189
4.
Travel, Transportation, and Commuting Expenses
189
6.
Entertainment
192
6.
Home Office and Vacation Rentals
194
7.
Litigation Expenses
195
ch. 13
Itemized (Mainly Personal) Deductions
199
A.
Deductions Above and Below the Line
200
B.
Medical Expenses
202
C.
Casualty Losses
203
D.
Home Mortgage and Equity Loan Interest
204
E.
State Taxes
205
F.
Charitable Contributions
206
G.
Miscellaneous Itemized Expenses
209
H.
Personal (Non-Itemized) Exemptions
210
I.
Alimony, Certain Retirement Savings Investments
210
ch. 14
Capital Gains and Losses
213
A.
What a Capital Asset Is Not
214
1.
Property Held Primarily for Sale to Customers in the Ordinary Course of Business
215
2.
Depreciable Property and Land Used in a Trade or Business
216
3.
Literary Compositions, Letters, Etc
216
4.
Notes and Accounts Receivable
217
5.
Government Publications
217
6.
Commodities Derivatives in the Hands of a Dealer
217
7.
Hedging Operation Instruments
217
8.
Supplies
218
B.
Problems in Classifying Capital Assets
218
C.
Applying the Capital Gains Tax Rates to Multiple Capital Asset Transactions
219
D.
Multiple Tax Rates for Different Kinds of Long-Term Capital Gains
220
E.
Capital Loss Carryover
221
F.
Section 1231 and "Quasi-Capital" Assets
221
ch. 15
Capitalization and Cost Recovery
225
A.
Capitalization
226
B.
Depreciation Methods
228
C.
Property-Specific Limitations on Cost Recovery Deductions
230
D.
The Mechanics of Straight-Line Depreciation
231
1.
The Basic Method
231
2.
"Conventions" About When the Property Begins to Be Used for Business Purposes
232
E.
Methods of Faster Depreciation
232
F.
Expensing Under Section 179
234
G.
Depletion and Intangible Drilling Costs
234
H.
Recapture
235
ch. 16
Assignment of Income
239
A.
The Basic Judicial Rule
240
B.
Transfers of Income from Property
242
C.
Are Property Rights to Future Income from Services Different?
244
D.
Use of Trusts to Shift Income and Statutory "Grantor Trust' Rules
245
Table Of Cases
249
Index
251