Solutions Manual for South-Western Federal Taxation 2027: Individual Income Taxes, 50th Edition (Young, Nellen, Persellin, Lassar, Cuccia & Cripe, 2026) | All Chapters Covered 1–20

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, TABLE OF CONTENTS
Solutions Manual: South-Western Federal Taxation 2027: Individual
Income Taxes, 50th Edition
Authors: Young, Nellen, Persellin, Lassar, Cuccia, Cripe
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Part I: INTRODUCTION AND BASIC TAX MODEL
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1. An Introduction to Taxation and Understanding the Federal Tax Law
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2. Working with the Tax Law
3. Tax Formula and Tax Determination: An Overview of Property Transactions
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Part II: GROSS INCOME
4. Gross Income: Concepts and Inclusions
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5. Gross Income: Exclusions

Part III: DEDUCTIONS
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6. Deductions and Losses: In General
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7. Deductions and Losses: Certain Business Expenses and Losses
8. Depreciation, Cost Recovery, Amortization, and Depletion
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9. Deductions: Employee and Self-Employed-Related Expenses
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10. Deductions and Losses: Certain Itemized Deductions
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11. Investor Losses
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Part IV: SPECIAL TAX COMPUTATIONS METHODS, TAX CREDITS,
AND PAYMENT PROCEDURES
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12. Alternative Minimum Tax
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13. Tax Credits and Payment Procedures

Part V: PROPERTY TRANSACTIONS
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14. Property Transactions: Determination of Gain or Loss, and Basis Considerations
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15. Property Transactions: Nontaxable Exchanges
16. Property Transactions: Capital Gains and Losses
17. Property Transactions: Section 1231, and Recapture Provisions

, Part VI: ACCOUNTING PERIODS, ACCOUNTING METHODS, AND
DEFERRED COMPENSATION
18. Accounting Periods and Methods
19. Deferred Compensation

Part VII: CORPORATIONS AND PARTNERSHIPS
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20. Corporations and Partnerships
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, Solution and Answer Guide: Young, Nellen, Persellin, Cuccia, Lassar, Cripe, Gill, SWFT Individual Income Taxes
2027, 9798214058085; Appendix F: Practice Set Assignments—Comprehensive Tax Return Problems



Solution and Answer Guide
YOUNG, NELLEN, PERSELLIN, CUCCIA, LASSAR, CRIPE, GILL, SWFT INDIVIDUAL INCOME TAXES
2027, 9798214058085; APPENDIX F: PRACTICE SET ASSIGNMENTS—COMPREHENSIVE TAX
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RETURN PROBLEMS
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TABLE OF CONTENTS
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Problem 1 Solutions.................................................................................................................................. 1
Problem 2 Solutions................................................................................................................................. 4
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PROBLEM 1 SOLUTIONS
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1. Christopher reports his taxable compensation of $85,000 on Line 1 of Form 1040. This
includes his salary of $105,200 and the $6,000 bonus he received in 2025 (because he
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is a cash basis taxpayer). This sum is reduced by his $19,000 contribution to his
§ 401(k) plan (taxation is deferred until he takes distributions from the plan) and
$7,200 of health insurance premium payments. Because these premiums were paid
with pre-tax dollars, these costs are not included on Schedule A as qualifying medical
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expenses. The cost of commuting from home to work and back home again is a
personal expense, so Christopher is not permitted to claim a deduction for his
commuting mileage.
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2. Ashley reports her income from her sole proprietorship on Schedule C (Form 1040).
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Her consulting income of $72,000 is reported on Part I of Schedule C. Since she uses
the cash method of accounting for tax purposes, she includes the $3,000 receipt for
work done in 2024 but not the $5,000 she billed for 2025 work that she has not yet
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collected. The $6,400 uncollected receivable from 2023 cannot be deducted as a bad
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debt because Ashley has no basis in the item. (She never recognized that income in a
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prior year.)

Her total deductible business expenses are $17,474:
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 Line 9 Car expenses of $658 for mileage (940 miles × $0.70 standard business
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mileage rate)
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 Line 13 Depreciation of $800 on the fireproof safe (from Form 4562, see item 3)
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 Line 22 Supplies of $8,000 ($4,800 drafting supplies + $3,200 reproduction
materials)
 Line 23 Taxes and licenses of $500
 Line 27b Other expenses of $1,250 (detailed in Part V of Schedule C, page 2, as
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Dues and subscriptions $390 and Uniforms $860)
 Line 30 Home office deduction of $6,266 (see item 3)
Net profit from the sole proprietorship is $54,526 on Line 31, Schedule C (Form 1040).
Because Ashley is self-employed, she computes self-employment tax of $7,704 using
Schedule SE (Form 1040). This tax is reported on Line 4 of Schedule 2 (Form 1040).



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