SOLUTIONS MANUAL FOR MCGRAW-HILL'S ESSENTIALS OF FEDERAL TAXATION, 2025 EDITION, EVERGREEN RELEASE BY BRIAN C. SPILKER, BENJAMIN C. AYERS, JOHN

Solutions GManual—Taxation Gof GIndividuals, GbyGSpilker Get
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SOLUTIONS MANUAL FOR MCGRAW-HILL'S ESSENTIALS OF
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FEDERAL TAXATION, 2025 EDITION, EVERGREEN RELEASE
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BY BRIAN C. SPILKER, BENJAMIN C. AYERS, JOHN
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© GMcGraw GHill G LLC. G All Grights G reserved. G No Greproduction G oriodistribution Gwithout Gthe Gprior G written Gconsent G of
G McGraw GHill G LLC.

1

, Solutions GManual—Taxation Gof GIndividuals, GbyGSpilker Get
al.
SOLUTION MANUAL FOR G G


McGraw-
Hill's Taxation of Individuals 2024 Edition,
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15th Editio n Spilker
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Chapter 1-14 G




Chapter 1 G



An Introduction to Tax
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Discussion Questions G




(1) [LO 1] Jessica’s friend Zachary once stated that he
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couldn’t understand why someone would take a
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tax course. Why is this a rather naïve view?
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Taxes are a part of everyday life and have a financial
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effect on many of the major personal decisions that
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individuals face (e.g., investment decisions,
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evaluating al ternative job offers, saving for
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education expenses, gift or estate planning, etc.).
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(2) [LO 1] What are some aspects of business that
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require knowledge of taxation? What are some
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aspects of personal finance that require knowledge
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of taxation?
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Taxes play an important role in fundamental business
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decisions such as the followi ng:
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 What organizational form should a business use?
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 Where should the business locate? G G G G

 How should business acquisitions be structured?
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 How should the business compensate employees?
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© GMcGraw GHill G LLC. G All Grights G reserved. G No Greproduction G oriodistribution Gwithout Gthe Gprior G written Gconsent G of
G McGraw GHill G LLC.

2

, Solutions GManual—Taxation Gof GIndividuals, GbyGSpilker Get
al.
What is the appropriate mix of debt and equity for the
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business? G

 Should the business rent or own its equipment and
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property? G

 How should the business distribute profits to its owners?
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One must consider all transaction costs (including
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taxes) to evaluate the merits of a transaction.
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Common personal financial decisions that taxes
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influence include: choosing inve stments, retirement
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planning, choosing to rent or buy a home, evaluating
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alternati ve job offers, saving for education expenses,
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and doing gift or estate planning.
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(3) [LO 1] Describe some ways in which taxes affect
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Gthe political process in the United States.
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U.S. presidential candidates often distinguish themselves from
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their opponents
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© GMcGraw GHill G LLC. G All Grights G reserved. G No Greproduction G oriodistribution Gwithout Gthe Gprior G written Gconsent G of
G McGraw GHill G LLC.

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, Solutions GManual—Taxation Gof GIndividuals, GbyGSpilker Get
al.

based upon their tax rhetoric. Likewise, the major
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political parties generally have very diverse views of
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the appropriate way to tax the public. Determining
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who is t axed, what is taxed, and how much is taxed
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are difficult questions. Voters must h ave a basic
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understanding of taxes to evaluate the merits of
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alternative tax propo sals offered by opposing
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political candidates and their political parties.
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(4) [LO 2] Courtney recently received a speeding ticket
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on her way to the university. Her fine was $200. Is
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this considered a tax? Why or why not?
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The $200 speeding ticket is not considered a tax.
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Instead, it is considered a fine or penalty. Taxes
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differ from fines and penalties because taxes are not
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intended to punish or prevent illegal behavior.
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(5) [LO 2] Marlon and Latoya recently started building a house.
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GThey had to pay G G G



$300 to the county government for a building permit.
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GIs the $300 payment a tax? Why or why not?
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The building permit is not considered a tax because
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$300 payment is directly linke d to a benefit that they
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received (i.e., the ability to build a house).
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(6) [LO 2] To help pay for the city’s new stadium, the
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city of Birmingham recently enacted a 1 percent
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surcharge on hotel rooms. Is this a tax? Why or
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why not?
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© GMcGraw GHill G LLC. G All Grights G reserved. G No Greproduction G oriodistribution Gwithout Gthe Gprior G written Gconsent G of
G McGraw GHill G LLC.

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