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Federal Income Tax
South Texas College of Law Houston
Yamamoto, Kevin M.

Tax Outline Yamamoto Spring 1999
Draft

SUBCHAPTER B – Computation of Taxable Income
§1c: Tax Rate for Single/Individual
§1h: Tax Rate on Net Capital Gains

PART I: DEFINITIONS
61: GI Defined
62: AGI Defined
63: Taxable Income Defined (Standard Deduction defined)
65: Ordinary Income Defined
67: 2% Floor for on miscellaneous itemized deductions: look to list §67a: if there 2% floor does not apply
68: overall limitation on itemized deductions

PART II: ITEMS SPECIFICALLY INCLUDED IN GI
71: Alimony & Separate Maintenance Payments
72: Annuities
74: Prizes and awards
82: Reimbursement for Moving expenses (except as provided in §136a6: fringe benefit for moving expenses)

PART III: ITEMS SPECIFICALLY EXCLUDED FROM GI
101: Certain Death Benefits: GI shall not include Insurance Benefits paid by reason of death
102: Gifts & inheritances (Deitrich case: detached and dissineterested act)
108: Income from discharge of indebtedness
109: improvements by less on lessor’s property
119: meals or lodging furnished for convenience of employer
121: Exclusion of Gain from sale of principle residence: ownership and use requirement: within 2 years
132: Fringe benefits (all seven)

PART V: DEDUCTIONS FOR PERSONAL EXEMPTIONS
151: Allowance for Personal Exemption
152: Defines a dependent

PART VI: ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS
162: Trade or Business Expense deductions SHALL BE ALLOWED if ordinary and necessary
163: interest expenses are deductable
164: taxes are deductible…
165: losses are deducible…
167: Depreciation Definition: shall be allowed for reasonable allowance for exhaustion, wear and tear and obsolosence
168: ACRS
195: Start-Up expenditures
197: Amortization of goodwill and certain other tangibles (not depreciable)

PART VII: ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS:
212: Expenses for Production of Income: NON-business, individual profit making expenses are Deductable
213: Medical, dental expenses etc…
215: Alimony payments are deductible (payor)
217: Moving Expenses
221: Interest on educational loans

PART VIII: SPECIAL DEDUCTIONS FOR CORPORATIONS

PART IX: ITEMS NOT DEDUCTIBLE
262: Personal Family or living expenses ARE NOT DEDUCTABLE
263: Capital expenditures are not deductible
274: dissalowance of certain entertainment expenses (under §212) AND 50% for meals…§274n
280F: luxury automobile

SUBCHAPTER O: GAIN OR LOSS FOR DISPOSITION OF PROPERTY

PART I: DETERMINATION OF AMOUNT OF AND RECOGNITION OF GAIN OR LOSS
1001a: realized gain
1001b: amount realized
1001c: amount recognized
1011: Adjusted Basis
1012: Basis for property is cost
1014: Basis for property acquired from a decedent
1015: basis for property acquired as a gift
1016: Adjustment to basis
1017: discharge of indebt

happens to the remaining benefits to be paid to a life insurance beneficiary, if the beneficiary was receiving (via insurance contract), annual payments and dies before reaching her life expectancy? 1.101-4c
12. §1h: Tax on Net Capital Gains
13. §1212b: treatment of carryovers from Net Capital Losses

I. Sources of Tax Law & History:
1. Tax Code first (part of the USC)
n Separated into Codes
n Title 26
n Subtitle A (Income Tax)
n Chapter 1 (subchapters A, B, c for corporations, K for partnerships)
2. Case Law: Courts do the following:
n Interpreting code and regulation
n create judicial doctrine (can be in addition to the code)
a. Trial Level Courts
n United States Tax Court: Article I Court (only court that you can go into without paying your taxes up front)
(i) no jury (only judge)
(ii) More knowledgable about tax
n United States Court of Federal Claims
(iii) no jury
(iv) refund tribunal
n Federal District Court (published in Fsupp)
(v) Refund Tribunal
(vi) Jury Trials
(vii) Must pay tax and ask for it back from IRS and then go to Federal District Court
Supreme