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TABLE OF CONTENTS
Solutions Manual: South-Western Federal Taxation 2026: Individual
Income Taxes, 49th Edition
Authors: Young, Persellin, Nellen, Cuccia, Maloney, Lassar, Cripe
Part 1. Introduction and Basic Tax Model
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
Part 2. Gross Income
Chapter 4. Gross Income: Concepts and Inclusions
Chapter 5. Gross Income: Exclusions
Part 3. Deductions
Chapter 6. Deductions and Losses: In General
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
Chapter 10. Deductions and Losses: Certain Itemized Deductions
Chapter 11. Investor Losses
Part 4. Special Tax Computation Methods, Tax Credits, and Payment
Procedures
Chapter 12. Alternative Minimum Tax
Chapter 13. Tax Credits and Payment Procedures
Part 5. Property Transactions
Chapter 14. Property Transactions: Determination of Gain or Loss and Basis Considerations
Chapter 15. Property Transactions: Nontaxable Exchanges and Tax-Free Transactions
Chapter 16. Property Transactions: Capital Gains and Losses
Chapter 17. Property Transactions: § 1231 and Recapture Provisions
Part 6. Accounting Periods, Accounting Methods, and Deferred Compensation
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Chapter 18. Accounting Periods and Methods
Chapter 19. Deferred Compensation
Part 7. Corporations and Partnerships
Chapter 20. Corporations and Partnerships
MEDGEEK
, Solution and Answer Guide: Young, Nellen, Persellin, Lassar, Cuccia, Cripe, SWFT Individual Income Taxes
2026, 9798214043906; Appendix F: Practice Set Assignments—Comprehensive Tax Return Problems
STUVIA?_APPROVED
Solution and Answer Guide
YOUNG, NELLEN, PERSELLIN, LASSAR, CUCCIA, CRIPE, SWFT INDIVIDUAL INCOME TAXES 2026,
9798214043906; APPENDIX F: PRACTICE SET ASSIGNMENTS —COMPREHENSIVE TAX RETURN
PROBLEMS
TABLE OF CONTENTS
Problem 1 Solutions ............................................................................................................... 1
Problem 2 Solutions ............................................................................................................. 7
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
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
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,
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
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
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
Subscriptions to trade journals 240
Membership dues to trade associations 180 1,280
MEDGEEK
, STUVIA?_APPROVED??
TABLE OF CONTENTS
Solutions Manual: South-Western Federal Taxation 2026: Individual
Income Taxes, 49th Edition
Authors: Young, Persellin, Nellen, Cuccia, Maloney, Lassar, Cripe
Part 1. Introduction and Basic Tax Model
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
Part 2. Gross Income
Chapter 4. Gross Income: Concepts and Inclusions
Chapter 5. Gross Income: Exclusions
Part 3. Deductions
Chapter 6. Deductions and Losses: In General
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
Chapter 10. Deductions and Losses: Certain Itemized Deductions
Chapter 11. Investor Losses
Part 4. Special Tax Computation Methods, Tax Credits, and Payment
Procedures
Chapter 12. Alternative Minimum Tax
Chapter 13. Tax Credits and Payment Procedures
Part 5. Property Transactions
Chapter 14. Property Transactions: Determination of Gain or Loss and Basis Considerations
Chapter 15. Property Transactions: Nontaxable Exchanges and Tax-Free Transactions
Chapter 16. Property Transactions: Capital Gains and Losses
Chapter 17. Property Transactions: § 1231 and Recapture Provisions
Part 6. Accounting Periods, Accounting Methods, and Deferred Compensation
MEDGEEK
, STUVIA?_APPROVED??
Chapter 18. Accounting Periods and Methods
Chapter 19. Deferred Compensation
Part 7. Corporations and Partnerships
Chapter 20. Corporations and Partnerships
MEDGEEK
, Solution and Answer Guide: Young, Nellen, Persellin, Lassar, Cuccia, Cripe, SWFT Individual Income Taxes
2026, 9798214043906; Appendix F: Practice Set Assignments—Comprehensive Tax Return Problems
STUVIA?_APPROVED
Solution and Answer Guide
YOUNG, NELLEN, PERSELLIN, LASSAR, CUCCIA, CRIPE, SWFT INDIVIDUAL INCOME TAXES 2026,
9798214043906; APPENDIX F: PRACTICE SET ASSIGNMENTS —COMPREHENSIVE TAX RETURN
PROBLEMS
TABLE OF CONTENTS
Problem 1 Solutions ............................................................................................................... 1
Problem 2 Solutions ............................................................................................................. 7
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
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
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,
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
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
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
Subscriptions to trade journals 240
Membership dues to trade associations 180 1,280
