McGraw Hills Taxation of
Individuals 2024 Edition 15th Edition
ST
SOLUTIONS
UV
IA
MANUAL
_A
PP
Brian Spilker
Benjamin Ayers
John Barrick
RO
John Robinson
Troy Lewis
Connie Weaver
VE
────────────────────────────────────────────────────
Comprehensive Solutions Manual for Instructors
D?
and Students
© Brian Spilker, Benjamin Ayers, John Barrick, John Robinson, Troy Lewis & Connie
?
Weaver. All rights reserved. Reproduction or distribution without permission is prohibited.
© Successhands
, Solutions Manual for McGraw-Hill’s Taxation of Individuals (2024 Edition,
15th Edition)
Brian Spilker, Benjamin Ayers, John Barrick, John Robinson, Troy Lewis &
Connie Weaver
ST
PART I: INTRODUCTION TO TAXATION
1. An Introduction to Tax
UV
2. Tax Compliance, the IRS, and Tax Authorities
3. Tax Planning Strategies and Related Limitations
PART II: BASIC INDIVIDUAL TAXATION
IA
4. Individual Income Tax Overview, Dependents, and Filing Status
5. Gross Income and Exclusions
6. Individual Deductions
_A
7. Investments
8. Individual Income Tax Computation and Tax Credits
PART III: BUSINESS-RELATED TRANSACTIONS
PP
9. Business Income, Deductions, and Accounting Methods
10. Property Acquisition and Cost Recovery
11. Property Dispositions
RO
PART IV: SPECIALIZED TOPICS
12. Compensation
13. Retirement Savings and Deferred Compensation
14. Tax Consequences of Home Ownership
VE
D?
?
© Successhands
, Solutions Manual—Taxation of Individuals, by Spilker et al.
Solution Manual For
McGraw-Hill's Taxation of Individuals 2024 Edition,
15th Edition Spilker
SMT
Chapter 1-14
Chapter 1
An Introduction to Tax
UEDV
Discussion Questions
(1) [LO 1] Jessica’s friend Zachary once stated that he couldn’t understand why
ICAO
someone would take a tax course. Why is this a rather naïve view?
Taxes are a part of everyday life and have a financial effect on many of the major
personal decisions that individuals face (e.g., investment decisions, evaluating
_NA
alternative job offers, saving for education expenses, gift or estate planning, etc.).
(2) [LO 1] What are some aspects of business that require knowledge of taxation?
What are some aspects of personal finance that require knowledge of taxation?
PNPO
Taxes play an important role in fundamental business decisions such as the
following:
What organizational form should a business use?
Where should the business locate?
RISO
How should business acquisitions be structured?
How should the business compensate employees?
What is the appropriate mix of debt and equity for the business?
Should the business rent or own its equipment and property?
How should the business distribute profits to its owners?
SVE
One must consider all transaction costs (including taxes) to evaluate the merits of
a transaction.
EDU
Common personal financial decisions that taxes influence include: choosing
investments, retirement planning, choosing to rent or buy a home, evaluating
alternative job offers, saving for education expenses, and doing gift or estate
planning.
?R?
(3) [LO 1] Describe some ways in which taxes affect the political process in the
United States.
U.S. presidential candidates often distinguish themselves from their opponents
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
1
, Solutions Manual—Taxation of Individuals, by Spilker et al.
based upon their tax rhetoric. Likewise, the major political parties generally have
very diverse views of the appropriate way to tax the public. Determining who is
taxed, what is taxed, and how much is taxed are difficult questions. Voters must
have a basic understanding of taxes to evaluate the merits of alternative tax
SMT
proposals offered by opposing political candidates and their political parties.
(4) [LO 2] Courtney recently received a speeding ticket on her way to the university.
Her fine was $200. Is this considered a tax? Why or why not?
UEDV
The $200 speeding ticket is not considered a tax. Instead, it is considered a fine
or penalty. Taxes differ from fines and penalties because taxes are not intended
to punish or prevent illegal behavior.
(5) [LO 2] Marlon and Latoya recently started building a house. They had to pay
ICAO
$300 to the county government for a building permit. Is the $300 payment a tax?
Why or why not?
The building permit is not considered a tax because $300 payment is directly
_NA
linked to a benefit that they received (i.e., the ability to build a house).
(6) [LO 2] To help pay for the city’s new stadium, the city of Birmingham recently
enacted a 1 percent surcharge on hotel rooms. Is this a tax? Why or why not?
PNPO
The 1 percent surcharge is a tax. The 1 percent surcharge is an earmarked tax –
i.e., collected for a specific purpose. The surcharge is considered a tax because
the tax payments made by taxpayers do not directly relate to the specific benefit
received by the taxpayers.
RISO
(7) [LO 2] As noted in Example 1-2, tolls, parking meter fees, and annual licensing
fees are not considered taxes. Can you identify other fees that are similar?
There are several possible answers to this question. Some common examples
include entrance fees to national parks, tag fees paid to local/state government
SVE
for automobiles, boats, etc.
(8) [LO 2] If the general objective of our tax system is to raise revenue, why does the
EDU
income tax allow deductions for charitable contributions and retirement plan
contributions?
In addition to the general objective of raising revenue, Congress uses the federal
tax system to encourage certain behavior and discourage other behavior. The
?R?
charitable contribution deduction is intended to encourage taxpayers to support
the initiatives of charitable organizations, whereas deductions for retirement
contributions are intended to encourage retirement savings. Another objective of
the tax system is to redistribute wealth.
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
2
Individuals 2024 Edition 15th Edition
ST
SOLUTIONS
UV
IA
MANUAL
_A
PP
Brian Spilker
Benjamin Ayers
John Barrick
RO
John Robinson
Troy Lewis
Connie Weaver
VE
────────────────────────────────────────────────────
Comprehensive Solutions Manual for Instructors
D?
and Students
© Brian Spilker, Benjamin Ayers, John Barrick, John Robinson, Troy Lewis & Connie
?
Weaver. All rights reserved. Reproduction or distribution without permission is prohibited.
© Successhands
, Solutions Manual for McGraw-Hill’s Taxation of Individuals (2024 Edition,
15th Edition)
Brian Spilker, Benjamin Ayers, John Barrick, John Robinson, Troy Lewis &
Connie Weaver
ST
PART I: INTRODUCTION TO TAXATION
1. An Introduction to Tax
UV
2. Tax Compliance, the IRS, and Tax Authorities
3. Tax Planning Strategies and Related Limitations
PART II: BASIC INDIVIDUAL TAXATION
IA
4. Individual Income Tax Overview, Dependents, and Filing Status
5. Gross Income and Exclusions
6. Individual Deductions
_A
7. Investments
8. Individual Income Tax Computation and Tax Credits
PART III: BUSINESS-RELATED TRANSACTIONS
PP
9. Business Income, Deductions, and Accounting Methods
10. Property Acquisition and Cost Recovery
11. Property Dispositions
RO
PART IV: SPECIALIZED TOPICS
12. Compensation
13. Retirement Savings and Deferred Compensation
14. Tax Consequences of Home Ownership
VE
D?
?
© Successhands
, Solutions Manual—Taxation of Individuals, by Spilker et al.
Solution Manual For
McGraw-Hill's Taxation of Individuals 2024 Edition,
15th Edition Spilker
SMT
Chapter 1-14
Chapter 1
An Introduction to Tax
UEDV
Discussion Questions
(1) [LO 1] Jessica’s friend Zachary once stated that he couldn’t understand why
ICAO
someone would take a tax course. Why is this a rather naïve view?
Taxes are a part of everyday life and have a financial effect on many of the major
personal decisions that individuals face (e.g., investment decisions, evaluating
_NA
alternative job offers, saving for education expenses, gift or estate planning, etc.).
(2) [LO 1] What are some aspects of business that require knowledge of taxation?
What are some aspects of personal finance that require knowledge of taxation?
PNPO
Taxes play an important role in fundamental business decisions such as the
following:
What organizational form should a business use?
Where should the business locate?
RISO
How should business acquisitions be structured?
How should the business compensate employees?
What is the appropriate mix of debt and equity for the business?
Should the business rent or own its equipment and property?
How should the business distribute profits to its owners?
SVE
One must consider all transaction costs (including taxes) to evaluate the merits of
a transaction.
EDU
Common personal financial decisions that taxes influence include: choosing
investments, retirement planning, choosing to rent or buy a home, evaluating
alternative job offers, saving for education expenses, and doing gift or estate
planning.
?R?
(3) [LO 1] Describe some ways in which taxes affect the political process in the
United States.
U.S. presidential candidates often distinguish themselves from their opponents
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
1
, Solutions Manual—Taxation of Individuals, by Spilker et al.
based upon their tax rhetoric. Likewise, the major political parties generally have
very diverse views of the appropriate way to tax the public. Determining who is
taxed, what is taxed, and how much is taxed are difficult questions. Voters must
have a basic understanding of taxes to evaluate the merits of alternative tax
SMT
proposals offered by opposing political candidates and their political parties.
(4) [LO 2] Courtney recently received a speeding ticket on her way to the university.
Her fine was $200. Is this considered a tax? Why or why not?
UEDV
The $200 speeding ticket is not considered a tax. Instead, it is considered a fine
or penalty. Taxes differ from fines and penalties because taxes are not intended
to punish or prevent illegal behavior.
(5) [LO 2] Marlon and Latoya recently started building a house. They had to pay
ICAO
$300 to the county government for a building permit. Is the $300 payment a tax?
Why or why not?
The building permit is not considered a tax because $300 payment is directly
_NA
linked to a benefit that they received (i.e., the ability to build a house).
(6) [LO 2] To help pay for the city’s new stadium, the city of Birmingham recently
enacted a 1 percent surcharge on hotel rooms. Is this a tax? Why or why not?
PNPO
The 1 percent surcharge is a tax. The 1 percent surcharge is an earmarked tax –
i.e., collected for a specific purpose. The surcharge is considered a tax because
the tax payments made by taxpayers do not directly relate to the specific benefit
received by the taxpayers.
RISO
(7) [LO 2] As noted in Example 1-2, tolls, parking meter fees, and annual licensing
fees are not considered taxes. Can you identify other fees that are similar?
There are several possible answers to this question. Some common examples
include entrance fees to national parks, tag fees paid to local/state government
SVE
for automobiles, boats, etc.
(8) [LO 2] If the general objective of our tax system is to raise revenue, why does the
EDU
income tax allow deductions for charitable contributions and retirement plan
contributions?
In addition to the general objective of raising revenue, Congress uses the federal
tax system to encourage certain behavior and discourage other behavior. The
?R?
charitable contribution deduction is intended to encourage taxpayers to support
the initiatives of charitable organizations, whereas deductions for retirement
contributions are intended to encourage retirement savings. Another objective of
the tax system is to redistribute wealth.
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
2
