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, TABLE OF CONTENTS
Solutions Manual: South-Western Federal Taxation 2026:
Comprehensive, 49th Edition
Authors: Young, Persellin, Nellen, Cuccia, Maloney, Lassar, Cripe
ST
Part 1. Introduction and Basic Tax Model
UV
Chapter 1. An Introduction to Taxation and Understanding the Federal Tax Law
Chapter 2. Working with the Tax Law
Chapter 3. Tax Formula and Tax Determination
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Part 2. Gross Income
Chapter 4. Gross Income: Concepts and Inclusions
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Chapter 5. Gross Income: Exclusions
Part 3. Deductions and Credits
Chapter 6. Deductions and Losses: In General
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Chapter 7. Deductions and Losses: Certain Business Expenses and Losses
Chapter 8. Depreciation, Cost Recovery, Amortization, and Depletion
Chapter 9. Deductions: Employee and Self-Employed-Related Expenses
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Chapter 10. Deductions and Losses: Certain Itemized Deductions
Chapter 11. Investor Losses
Chapter 12. Tax Credits and Payments
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Part 4. Property Transactions
Chapter 13. Property Transactions: Determination of Gain or Loss, Basis Considerations,
Nontaxable Exchanges, and Tax-Free Transactions
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Chapter 14. Property Transactions: Capital Gains and Losses, § 1231, and Recapture
Provisions
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Part 5. Special Tax Computations and Accounting Periods and Methods
Chapter 15. The Deduction for Qualified Business Income for Noncorporate Taxpayers
Chapter 16. Accounting Periods and Methods
Part 6. Corporations
, Chapter 17. Corporations: Introduction and Operating Rules
Chapter 18. Corporations: Organization and Capital Structure
Chapter 19. Corporations: Distributions Not in Complete Liquidation
Chapter 20. Corporations: Distributions in Complete Liquidation and an Overview of
Reorganizations
Part 7. Flow-Through Entities
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Chapter 21. Partnerships: Formation, Operation, and Basis
Chapter 22. Partnerships: Distributions, Transfer of Interests, and Terminations
Chapter 23. S Corporations
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Part 8. Advanced Tax Practice Considerations
Chapter 24. Taxes in the Financial Statements
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Chapter 25. Exempt Entities
Chapter 26. Multistate Corporate Taxation
Chapter 27. Taxation of International Transactions
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Chapter 28. Tax Practice and Ethics
Part 9. Family Tax Planning
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Chapter 29. The Federal Gift and Estate Taxes
Chapter 30. Income Taxation of Trusts and Estates
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, Solution and Answer Guide: Young, Persellin, Nellen, Cuccia, Lassar, Maloney, Cripe, SWFT Comprehensive Volume
2026, 9798214043753; Appendix F: Practice Set Assignments—Comprehensive Tax Return Problems
Solution and Answer Guide
YOUNG, PERSELLIN, NELLEN, CUCCIA , LASSAR, MALONEY, CRIPE, SWFT COMPREHENSIVE
VOLUME 2026, 9798214043753; APPENDIX F: PRACTICE SET ASSIGNMENTS—COMPREHENSIVE
TAX RETURN PROBLEMS
TABLE OF CONTENTS
Problem 1 Solutions ............................................................................................................... 1
ST
Problem 2 Solutions ............................................................................................................. 7
UV
PROBLEM 1 SOLUTIONS
1. Michael is self-employed and reports his business income on Schedule C. Both his
consulting fees and his expense reimbursements are reported on Line 1.
Line 1: Gross receipts [$92,800 consulting fees + $17,820 expense
IA
reimbursements + $7,000 Stewart Mining fee (see item 2)] $117,620
The travel expenses of $16,070 are deducted as follows:
Line 24a: Travel (airfare $8,200 + lodging $5,200 + transportation $920) $14,320
_A
Line 24b: Meals [$3,500 – disallowed portion (50% $3,500)] 1,750
2. Because Michael is a cash basis taxpayer, the $7,000 received from Stewart Mining in
2024 is included in gross receipts on Schedule C. The Granger Mining transaction has
no effect on the 2024 tax return. There is no income because no payment is received,
PP
and there is no bad debt deduction because Michael has no basis in the receivable.
The $5,100 received from Holliday will be taxable in 2025.
3. The $9,000 contribution to the H.R.10 Keogh retirement plan and the $3,800 of
premiums on health insurance are not reported on Schedule C but are deducted on
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Schedule 1, Lines 16 and 17, respectively. The remaining expense are deducted on
Schedule C as follows:
Line 8: Advertising $2,400
Line 18: Office expenses 1,200
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Line 22: Supplies 3,200
Line 23: State occupation license 300
Line 27a (also listed separately on page 2, Part V):
Business phone and Internet service $860
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Subscriptions to trade journals 240
Membership dues to trade associations 180 1,280
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D?
VE
RO
PP
_A
IA
UV
ST
, TABLE OF CONTENTS
Solutions Manual: South-Western Federal Taxation 2026:
Comprehensive, 49th Edition
Authors: Young, Persellin, Nellen, Cuccia, Maloney, Lassar, Cripe
ST
Part 1. Introduction and Basic Tax Model
UV
Chapter 1. An Introduction to Taxation and Understanding the Federal Tax Law
Chapter 2. Working with the Tax Law
Chapter 3. Tax Formula and Tax Determination
IA
Part 2. Gross Income
Chapter 4. Gross Income: Concepts and Inclusions
_A
Chapter 5. Gross Income: Exclusions
Part 3. Deductions and Credits
Chapter 6. Deductions and Losses: In General
PP
Chapter 7. Deductions and Losses: Certain Business Expenses and Losses
Chapter 8. Depreciation, Cost Recovery, Amortization, and Depletion
Chapter 9. Deductions: Employee and Self-Employed-Related Expenses
RO
Chapter 10. Deductions and Losses: Certain Itemized Deductions
Chapter 11. Investor Losses
Chapter 12. Tax Credits and Payments
VE
Part 4. Property Transactions
Chapter 13. Property Transactions: Determination of Gain or Loss, Basis Considerations,
Nontaxable Exchanges, and Tax-Free Transactions
D?
Chapter 14. Property Transactions: Capital Gains and Losses, § 1231, and Recapture
Provisions
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Part 5. Special Tax Computations and Accounting Periods and Methods
Chapter 15. The Deduction for Qualified Business Income for Noncorporate Taxpayers
Chapter 16. Accounting Periods and Methods
Part 6. Corporations
, Chapter 17. Corporations: Introduction and Operating Rules
Chapter 18. Corporations: Organization and Capital Structure
Chapter 19. Corporations: Distributions Not in Complete Liquidation
Chapter 20. Corporations: Distributions in Complete Liquidation and an Overview of
Reorganizations
Part 7. Flow-Through Entities
ST
Chapter 21. Partnerships: Formation, Operation, and Basis
Chapter 22. Partnerships: Distributions, Transfer of Interests, and Terminations
Chapter 23. S Corporations
UV
Part 8. Advanced Tax Practice Considerations
Chapter 24. Taxes in the Financial Statements
IA
Chapter 25. Exempt Entities
Chapter 26. Multistate Corporate Taxation
Chapter 27. Taxation of International Transactions
_A
Chapter 28. Tax Practice and Ethics
Part 9. Family Tax Planning
PP
Chapter 29. The Federal Gift and Estate Taxes
Chapter 30. Income Taxation of Trusts and Estates
RO
VE
D?
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, Solution and Answer Guide: Young, Persellin, Nellen, Cuccia, Lassar, Maloney, Cripe, SWFT Comprehensive Volume
2026, 9798214043753; Appendix F: Practice Set Assignments—Comprehensive Tax Return Problems
Solution and Answer Guide
YOUNG, PERSELLIN, NELLEN, CUCCIA , LASSAR, MALONEY, CRIPE, SWFT COMPREHENSIVE
VOLUME 2026, 9798214043753; APPENDIX F: PRACTICE SET ASSIGNMENTS—COMPREHENSIVE
TAX RETURN PROBLEMS
TABLE OF CONTENTS
Problem 1 Solutions ............................................................................................................... 1
ST
Problem 2 Solutions ............................................................................................................. 7
UV
PROBLEM 1 SOLUTIONS
1. Michael is self-employed and reports his business income on Schedule C. Both his
consulting fees and his expense reimbursements are reported on Line 1.
Line 1: Gross receipts [$92,800 consulting fees + $17,820 expense
IA
reimbursements + $7,000 Stewart Mining fee (see item 2)] $117,620
The travel expenses of $16,070 are deducted as follows:
Line 24a: Travel (airfare $8,200 + lodging $5,200 + transportation $920) $14,320
_A
Line 24b: Meals [$3,500 – disallowed portion (50% $3,500)] 1,750
2. Because Michael is a cash basis taxpayer, the $7,000 received from Stewart Mining in
2024 is included in gross receipts on Schedule C. The Granger Mining transaction has
no effect on the 2024 tax return. There is no income because no payment is received,
PP
and there is no bad debt deduction because Michael has no basis in the receivable.
The $5,100 received from Holliday will be taxable in 2025.
3. The $9,000 contribution to the H.R.10 Keogh retirement plan and the $3,800 of
premiums on health insurance are not reported on Schedule C but are deducted on
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Schedule 1, Lines 16 and 17, respectively. The remaining expense are deducted on
Schedule C as follows:
Line 8: Advertising $2,400
Line 18: Office expenses 1,200
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Line 22: Supplies 3,200
Line 23: State occupation license 300
Line 27a (also listed separately on page 2, Part V):
Business phone and Internet service $860
D?
Subscriptions to trade journals 240
Membership dues to trade associations 180 1,280
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