(BQ) Part 2 book "Income tax fundamentals" has contents: Accounting periods and methods and depreciation; capital gains and losses; withholding, estimated payments, and payroll taxes; partnership taxation; the corporate income tax; tax administration and tax planning. | Chapter 7 Accounting Periods and Methods and Depreciation LEARNING OBJECTIVES . After completing this chapter, you should be able to: LO Determine the different accounting periods and methods allowed for tax purposes. LO Understand the concept of depreciation and be able to calculate depreciation expense using the MACRS tables. LO Identify when a Section 179 election to expense the cost of property may be used. LO Apply the limitations placed on depreciation of ‘‘listed property’’ and ‘‘luxury automobiles.’’ LO Understand the tax treatment for goodwill and certain other intangibles. LO Determine whether parties are considered related for tax purposes, and classify the tax treatment of certain relatedparty transactions. Overview Taxpayers operating a business, whether professional, rental, manufacturing, or another activity, should have an understanding of the accounting periods (calendar, fiscal, or short-period tax years) and accounting methods (cash, accrual, or hybrid methods) allowed. This chapter begins by addressing how and when individual, partnership, and corporate taxpayers should report taxable income. The calculation of depreciation of business assets is also an important issue for most businesses. The Modified Accelerated Cost Recovery System (MACRS) is the tax depreciation method currently in use under . tax law. There are many special depreciation provisions which are discussed in this chapter including bonus depreciation, the election to expense (Section 179), and the limitations on ‘‘listed property’’ and ‘‘luxury’’ automobiles. The chapter covers the tax treatment of goodwill, going-concern value, covenants not to compete, franchises, trademarks, and other intangibles. Also covered is the limitation on the deduction of losses realized in certain related-party transactions. 7-1 Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, .
