Preface
Fundamentals of Income Tax Theory and Practice is a text developed to provide students with both the conceptual and practical information needed for a sound understanding of individual income tax at a reasonable cost. The text uses the latest information available from the Internal Revenue Service and combines it with background, conceptual information, and pedagogy to provide you with a resource that will enable you to learn how to handle your own income tax, help others, and provide a solid foundation if you wish to continue your study of individual, partnership, corporation, estate, and trust taxes.
Fundamentals of Income Tax Theory and Practice will be your guide to learning individual income tax. The text is designed around the IRS’s Publication 17: Your Federal Income Tax for the federal tax chapters. While Publication 17 is not a textbook, it is a rich source of material. In addition, a couple of other publications will be used to supplement this text and the material presented in Publication 17. The IRS material is available electronically from the Web page or you may write or visit an IRS office to pick up the materials.
Fundamentals of Income Tax Theory and Practice will provide context and explain concepts. It will provide examples. It will supplement the material in Publication 17 when more needs to be said. Finally, the text will reinforce your learning through the completion of end-of-chapter questions, short problems, and tax return preparation problems.
Throughout the chapters covering the federal income tax, you will be directed to read and study material in this text and in Publication 17. In addition, you will be asked to obtain IRS and California (if your instructor is using the California chapters) tax forms and publications to assist in your understanding of the material and to complete the end-of-chapter problems.
At the end of each chapter is a section on Tax Planning Opportunities followed by questions and short problems plus (in most chapters) one or two tax return preparation problems. Chapter 15, Appendix B: Comprehensive Tax Return Problem includes a comprehensive tax return problem.
Fundamentals of Income Tax Theory and Practice was created for the college student who wants to learn about the U.S. income tax system and how to save money on taxes; it will also help interested students prepare for other income tax courses and/or work in the tax field. This text is most effectively used in an income tax course where the objectives include learning both the tax concepts and how to prepare income tax returns.
The text incorporates the use of the Internal Revenue Service’s Publication 17: Your Federal Income Tax as an integral part of the federal tax text material. The text does not include all tax forms or tax publications as students can obtain them at no cost and with only a little effort since both the IRS and California provide the materials in hard copy and online to download or print from their Web pages. The first page of each chapter instructs the student which tax forms and publications they will need. Besides Publication 17, students are only directed to obtain Publications 15-A (for withholding tables), 970 (for the tax benefits of education), and 946 (for depreciation tables and guidance).
The 2008 edition of this text is the first; supplemental materials are planned for courses beginning in the fall of 2008. Solutions to the end-of-chapter questions and problems and the comprehensive problems will be provided to any instructor who adopts the text.
