Ebook Income tax fundamentals (2011 edition): Part 1

Income Tax Fundamentals 2011
Edition

Gerald E. Whittenburg
San Diego State University

Martha Altus-Buller
San Diego, California

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Income Tax Fundamentals, 2011 Edition
Gerald E. Whittenburg and Martha Altus-Buller

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Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.


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Page viii

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1st Pass Pages


CONCISE, CURRENT & PRACTICAL!
Income Tax Fundamentals’
Winning Forms Approach Is Time-Tested

I

ncome Tax Fundamentals 2011 Edition is designed as a self-contained book for an
introductory course in individual income taxation. We take pride in the concise,
current, and practical coverage of the income tax return preparation process.
Whittenburg/Altus-Buller continues to be the market-leading text with a forms approach
and is a reliable choice, with an experienced author team that offers a commitment to

accuracy. The text workbook format presents materials in practical sections with multiple
examples, Internet activities, and review problems. The presentation of the material does
not assume that the reader has taken a course in accounting, making it appropriate for
use as a self-study guide to federal income tax. Whittenburg/Altus-Buller adopters tell us:

“I use a forms-based approach to this course, and I chose this textbook for the
illustrations and the end of chapter materials. The problems and comprehensive
problems are very good.”
— Judy Daulton, Piedmont Technical College

“I have found the examples and illustrations to be of great benefit to the students in
their ability to comprehend the material.”
— John S. Ribezzo, Community College of Rhode Island

“I have found the examples and illustrations to be sufficient in quantity and detail.
The Self-Study Problems are particularly helpful. They allow students to check their
understanding of a small part of the material as they progress through the chapter.”
— Norma J. Hunting, Chabot College

Whittenburg/Altus-Buller’s hallmark “Forms Approach” allows students to practice
filling out tax returns right in the book without having to download tax forms online.
The “forms approach” is supported by an annotated 1040 map. The 1040 map is an
expanded tax formula, showing where each piece of the tax formula is covered in the
book. It is a helpful visual tool for instructors who like to reference the tax formula in
class. The 1040 map helps students understand how all of the elements of the text fit
together. To see the annotated 1040 map, please turn to pages x–xi.
Each individual tax form needed to complete the problems in the
text is included within Income Tax Fundamentals and within the
complimentary At Home™ software from H&R Block. H&R Block
At Home™ is practical and remarkably easy to use, with many helpful features available to

new users. The H&R Block At Home™ Web site (www.hrblock.com) offers useful tips,
calculators, and other current tax information. All of the 2010 Individual Income Tax
Return problems in the text may be solved using this software, or students may prepare
the tax returns by hand. If you would like to use H&R Block At Home™ on your campus
computers, please contact the publishing team.

Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.


Income Tax Fundamentals
Evolves Each Year
to Benefit You
NEW

TO

THIS EDITION

The 2011 Edition is updated to include the following new features and tax changes for tax year 2010. Due
to the back-up of tax bills in Congress, any bills affecting 2010 that are not passed when we go to press
will be covered in detail on the companion Web site.
t
A Student Guide to H&R Block At Home™ software is available on the companion Web site.
Instructions are accompanied by useful pointers and practical suggestions for each tax return problem
included in the text. The guide, written by Susan Snow Davis, Green River Community College, is
particularly helpful to new users of H&R Block At Home™ software and is a valuable resource for more
experienced users, as well.
t
Chapter 1 highlights several of the most prominent tax aspects of health care reform for 2010
and future years. The two health care reform acts that became law in March of 2010 (the Patient
Protection and Affordable Care Act and the Health Care and Education Reconciliation Act) contain

numerous tax provisions.
t
New tax provisions to assist the unemployed and businesses were added by the HIRE Act and the Small
Business Jobs Act, both passed in 2010. Selected tax changes from each tax act are covered in the text,
including the expanded Section 179 expensing rules and the extension of bonus depreciation through
the end of 2010.
t
Several tax provisions passed in prior years affecting 2010 are covered in the text. These include the
complete elimination of the phase-outs for itemized deductions and exemption deductions.
t
The Test Bank has been expanded by approximately 100 new multiple-choice questions.

AS WE GO

TO

PRESS

As we go to press, expected extensions of 2009 law to 2010 include:
t
The passage of an alternative minimum tax “patch.” Without a patch, an estimated one in five
taxpayers will pay alternative minimum tax in 2010.
t
The continuation of an itemized deduction for sales tax for taxpayers with little or no state income tax.
t
The continuation of the property tax deduction for taxpayers using the standard deduction.
t
The continuation of the tuition deduction.
t
The continuation of the $250 deduction for educator expenses.
Additionally, the 2010 law contains a $100 floor for casualty loss deductions, which we have used for all
casualty loss problems in the text. This $100 floor may be changed to $500 in the final weeks of 2010. To
access information on tax laws passed after the publication of this text, please visit www.cengage.com/
community/taxation or www.cengagebrain.com. At the CengageBrain.com home page, fill in the ISBN of
your title (from the back cover of your book) using the search box at the top of the page. This will take
you to the product page where free companion resources can be found.

iv

Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.


Step-By-Step Format
Builds Student Confidence
The practical, step-by-step format in Income Tax Fundamentals 2011
Edition builds from simple to complex topics. The authors are
careful to lead students down a path of understanding rather than
overwhelming them with excessive detail and multiple Internal
Revenue Code references.
t Helpful examples
within each chapter
provide realistic
stiic
scenarios for st
students
tud
uden
ents
ttss
to consider.

household if
hip test. A pe
between the tax
at any time du
rson is not
payer and the
ring the year

dependent wa
the relationshi
s in violation
EXAMPLE Sc
p
of local law.
ott provides
all of the supp
ort for an un
lives with him
re
la
ted family fri
for the entir
e tax year. He
end who
lives in anothe
also supports
r state. The fa
a cousin who
mily friend ca
dent, but the
n qualify as Sc
cousin cannot
ott’s depen. The family
the househol
friend meets
d test. Even
the member
though the co

tive, he could
of
us
in is not cons
have been a
idered a rela
dependent if
household pa
he met the m
rt of the test.
ember of the
◆
2. Gross Inco
me Test
The individua
l cannot have
gross i
($3 65

t The short sections within each chapter offer numerous examples, supported by the
“Self-Study Problems” throughout. The Self-Study Problems encourage students to
answer a series of short questions in a fill-in-the-blank or multiple-choice format. The
solutions to the Self-Study Problems are provided at the end of the text, offering
immediate solutions to students to help build confidence. The Self-Study Problems
are also found in the WebTutorTM product.
t The Quick Tax
Reference Guide
e
on the inside of the
h

back cover of the
textbook includes the
Tax Equation.

In

Wage Base for
Social Security
and Self-Emp
Wage Base for loyment Tax
Medicare

If Taxablee Inc
Inccom
In
om
me is
i Ov
Oveer:
er:
er
r:

SINGLE INDIVIDUAL
S
$0





$171,850

MARRIED INDIVID
UALS FILING
JOINT RETURNS
$0
$16,750
$68,000






HEADS OF HOUS
EHOLDS
$0



$45,550
$117,650


 

20 10 Fed era
l Ta x Ra te Sch
edu le

But Not Over:




$171,850

OR

QUALIFYING WIDO
W(ER)S
$16,750
$68,000




 



......... $11$457,6,55500
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LO 1.2 Descr

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