Introduction to Taxation Solutions

CHAPTER 1

INTRODUCTION TO TAXATION

SOLUTIONS TO PROBLEM MATERIALS

Status: Q/P
Question/ Present in Prior
Problem Topic Edition Edition

1 Effect of state and local taxes on decision making Unchanged 1 2 Tax structure Unchanged 3 3 Proportional versus progressive tax Unchanged 14 4 FICA and FUTA compared Unchanged 15 5 Use taxes Unchanged 4 6 Cumulative nature of the Federal gift tax Unchanged 6

7 Federal gift tax and use of annual exclusions Unchanged 7

8 Issue ID New 9 Ethics problem Unchanged 9 10 Issue recognition Unchanged 10 11 Issue ID Modified 11 12 Issue ID New 13 Ad valorem tax on realty: effect of tax holiday Unchanged 13 14 Issue recognition Unchanged 16 15 Issue recognition Unchanged 17 16 General sales tax: excluded items Unchanged 18 17 Income tax computation Modified 19 18 Entity choice Unchanged 20 19 Entity choice Modified 21 20 Implicit tax Unchanged 22 21 Tax rate determination Unchanged 23 22 Tax rate determination Unchanged 24 23 Justification for annual exclusion Unchanged 25

24 Justification for several tax provisions Unchanged 26

25 Economic and social considerations: home ownership Unchanged 27

26 Multiple justifications for several tax provisions New

27 Involuntary conversion: application and Unchanged 28

nonapplication of wherewithal to pay concept 28 Mitigating the effect of the annual accounting Unchanged 29 period concept 29 Coping with inflation: indexation procedure Unchanged 30

1-1 Status: Q/P
Question/ Present in Prior
Problem Topic Edition Edition

30 Internet activity Unchanged 31 31 VAT versus national sales tax: expected taxpayer Unchanged 32 compliance compared

Bridge Discipline
Problem

1 Bridge to Economics Unchanged 1

PROBLEM MATERIAL

1. Some tax