Basic Income Tax 2018-2019

sixth Edition

Preview Book

Basic Income Tax 2018-2019

Name: Basic Income Tax 2018-2019
Author: William Kratzke

by William P. Kratzke

Preview Book

This is the sixth edition of this casebook, updated May 01, 2018 and incorporating the Tax Cuts and Jobs Act. Visit http://elangdell.cali.org/ for the latest version and for revision history. This book is a basic income tax text. I intend this text to be suitable for a three-hour course for a class comprised of law students with widely different backgrounds.

About the Author(s)

Professor William Kratzke is a Cecil C. Humphreys Professor of Law at the University of Memphis. He received his B.A. in Political Science and the Far Eastern & Russian Institute from the University of Washington in 1971. This naturally caused him to be interested in attending law school. He received his J.D. from Valparaiso University in 1974 and was a member of the Valparaiso University Law Review’s editorial board. He received his LL.M. from Georgetown University in 1977.

Professor William Kratzke teaches tax law courses at the University of Memphis. He has been a faculty member there since 1979. He has taught courses across the curriculum. In addition to tax courses, he has taught trademarks, torts, civil procedure, world trade law, economic analysis, and other courses. He visited Santa Clara University and the University of Mississippi. He received Fulbright Teaching Awards in 1997 (Moldova) and 2001-2002 (Russia).

Professor Kratzke has written in the areas of tax law, trademark law, tort law, and antitrust law.

Conditions of Use and Copyright

William Kratzke, Basic Income Tax 2018-2019 Edition, Published by CALI eLangdell Press. Available under a Creative Commons BY-NC-SA 3.0 License. CALI® and eLangdell® are United States federally registered trademarks owned by the Center for Computer-Assisted Legal Instruction. The cover art design is a copyrighted work of CALI, all rights reserved. The CALI graphical logo is a trademark and may not be used without permission.

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Printed version

Paperback is available on Lulu.com.

Table of Contents

Introduction. Basic Income Tax 2016-2017

Introduction.1 - About the Author

Introduction.2 - Notices

Introduction.3 - About CALI eLangdell Press

Introduction.4 - Preface

Chapter One. The Government Raises Money: Introduction to Some Basic Concepts of Taxes and Taxing Income

1.1 - Introduction to Some Basic Concepts

1.2 - Taxing Income

1.3 - Some Definitions

1.4 - Layout of the Code

1.5 - Not All Income Is Taxed Alike

1.6 - Illustration of the Tax Formula:

1.7 - Sources of Tax Law and the Role of Courts

1.8 - Some Income Tax Policy and Some Income Tax Principles

1.9 - What We Tax: What Is Income?

Chapter Two. What Is Gross Income: Section 61 and the Sixteenth Amendment

2.1 - The Constitutional and Statutory Definitions of “Gross Income”

2.2 - The Constitutional and Statutory Definitions of “Gross Income:” Accessions to Wealth

2.3 - The Constitutional and Statutory Definitions of “Gross Income:” Realization

2.4 - The Constitutional and Statutory Definitions of “Gross Income:” Dominion and Control

Chapter Three. Exclusions from Gross Income

3.1 - The Society and Government that We Want

3.2 - Social Benefits

3.3 - Employment-Based Exclusions from Gross Income

Chapter Four. Loans and Cancellation of Indebtedness

4.1 - Tax Consequences of Borrowing Money

4.2 - Cancellation of Indebtedness

4.3 - Is It a Loan? Is There an Accession to Wealth?

4.4 - Section 108(a)'s Other Provisions

4.5 - Transactions Involving Property Subject to a Loan

4.6 - VI. Transactions Treated as Loans

Chapter Five. Progressivity and Assignment of Income

5.1 - Compensation for Services

5.2 - Income Splitting and the Joint Return

5.3 - Income Derived from Property

5.4 - Interest Free Loans and Unstated Interest

Chapter Six. Deductions: Business Expenses

6.1 - Expense or Capital

6.2 - Deductibility Under §§ 162 or 212

6.3 - Depreciation, Amortization, and Cost Recovery

Chapter Seven. Personal Deductions

7.1 - “Tax Expenditures”

7.2 - Denial of Discretion in Choosing How or What to Consume

7.3 - Creating a More Efficient and Productive Economy

7.4 - Deferral Until Consumption

Chapter Eight. Tax Consequences of Divorce and Intra-Family Transactions

8.1 - Introduction

8.2 - Before Marriage

8.3 - During Marriage

8.4 - After Marriage: Tax Consequences of Divorce

Chapter Nine. Timing of Income and Deductions: Annual Accounting and Ac-counting Principles

9.1 - Annual Accounting

9.2 - Deferral Mechanisms

9.3 - Basic Accounting Rules

Chapter Ten. Character of Income and Computation of Tax

10.1 - Capital Gain

10.2 - Sections 1245 and 1250: Depreciation Recapture

10.3 - Section 1231: Some Limited Mismatching

10.4 - More Matching