Federal Taxation of Property Transactions
Two significant complications affect the taxation of property transactions. The first complication is the special treatment of capital gains and losses. The second complication arises from the time value of money. This book aims to provide students with an appreciation for these two significant complexities through the descriptive materials and problems presented.
Chapter 1 introduces the concepts of basis and realization that are fundamental to the taxation of all transactions involving property. Chapter 2 follows with the effects of taxing gains and losses from capital assets differently from ordinary gains and losses. Chapter 3 deals with liabilities, which are essentially the opposite of assets or property, so that they can be considered negative property. Chapter 4 covers the rules applicable to the capitalization of costs incurred in the creation or acquisition of property and the recovery of those costs through a variety of expensing, amortization, and depreciation provisions. Chapter 5 covers non-recognition transactions (other than transfers involving partnerships, corporations or trusts) in which gain or loss is not recognized on disposition but is deferred through the mechanism of substituted basis. Chapter 6 deals with deferred compensation issues and other special problems arising in executive compensation arrangement using employer stock or stock options that reflect the lure of capital gain treatment. Chapter 7 covers the complexities that arise from the cliché that property is a bundle of rights, particularly when the ownership and long-term right to possession is divided under a lease or similar arrangement. Finally, Chapter 8 covers a number of special provisions that affect the deductibility of losses, including the wash sales rules, limitations on related party transactions, the at-risk and passive loss rules, and losses arising in certain leasing transactions.
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TABLE OF CONTENTS
REALIZATION OF GAIN OR LOSS
SALE OF A BUSINESS
DEFINITION OF A CAPITAL ASSET
SALE OR EXCHANGE
SECTION 1231 GAINS AND LOSSES
OTHER NONRECOGNITION PROVISIONS
EXECUTIVE COMPENSATION AND STOCK
NONSTATUTORY STOCK OPTIONS NSOs
INCENTIVE STOCK OPTIONS ISOs
DISCHARGE OF INDEBTEDNESS DOI
CAPITALIZATION AND COST RECOVERY
COST RECOVERY FOR TANGIBLE ASSETS
INTANGIBLES CONTRACT RIGHTS SELFCREATED
LIMITATIONS ON DEDUCTIONS AND LOSSES
LOSSES BETWEEN RELATED PARTIES