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| Special Note | |
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| Highlights | |
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| Table of Illustrations | |
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| Introduction | |
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| History, Policy and Structure | |
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| A Brief History of Income Taxation | |
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| In General | |
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| The American Income Tax | |
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| Theoretical Aspects of Income Taxation | |
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| Progressivity, The Marginal Rate of Tax and the Effective Rates of Tax | |
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| Alternatives to the Income Tax | |
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| Value Added Tax | |
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| Net Worth or Wealth Taxes | |
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| Head Tax | |
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| Consumption or Cash Flow Tax | |
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| The "Flat Rate Tax" | |
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| Problems With the Income Tax | |
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| Allocation of Resources: Imputed Income | |
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| Comprehensive Tax Base | |
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| Tax Expenditures | |
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| Complexity | |
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| Recovery of Capital: A Major Theme in the Field | |
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| Methods of Recovering Capital | |
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| Application to Easements: Inaja Land | |
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| Inflation: Kerbaugh-Empire | |
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| Other Theoretical Problems | |
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| Structure of the Internal Revenue Code | |
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| Income in General; Compensation for Services | |
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| What Constitutes Income in General: Cesarini, Old Colony Trust, Glenshaw Glass and Drescher | |
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| Fringe Benefits | |
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| Miscellaneous Benefits Under [section] 132 | |
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| Meals and Lodging | |
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| Group Term Life Insurance | |
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| Employee Death Benefits | |
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| Accident and Health Benefits | |
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| Bargain Purchases of Stock or Other Property and Stock Options | |
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| Unrestricted Property | |
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| Restricted Property | |
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| General Rule | |
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| Incentive Stock Options | |
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| Section 83 | |
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| Election | |
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| Stock options under [section] 83 | |
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| How Not to Pay Tax on a Billion Dollars: Deferred Compensation Goes Better With Coke | |
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| Other Items of Compensation Income | |
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| Tips | |
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| Strike Payments | |
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| Other Miscellaneous Items of Compensation Income | |
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| Other Items of Income and Exclusions from Income | |
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| Interest | |
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| In General | |
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| Tax Exempt Interest | |
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| Private Activity Bonds; Qualified Bonds | |
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| Original Issue Discount | |
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| Background | |
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| The 1982 Rules | |
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| Dividends and Other Distributions to Stockholders | |
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| Rents | |
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| In General | |
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| Royalties | |
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| In General | |
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| Advance Royalties: It's Only a Paper Moon | |
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| Proceeds From Life Insurance | |
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| Annuities | |
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| Gifts and Inheritances | |
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| Rationale for Excluding | |
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| Definition of "Gift": Duberstein | |
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| Gifts of Income From Property | |
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| Inheritances | |
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| In General | |
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| Transfers in Trust: Irwin v. Gavit | |
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| Prizes, Scholarships and Fellowship Grants | |
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| Prizes: McDonell | |
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| Scholarships and Fellowship Grants | |
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| Discharge of Indebtedness | |
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| General Rule and Background: Old Colony Trust; Clark; Kirby Lumber; Zarin | |
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| Insolvent or Bankrupt Debtor | |
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| Recovery of Damages to the Person or Business | |
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| In General | |
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| Damages From Personal Injuries | |
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| Damages From Injuries to Business; Raytheon | |
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| Damages to Capital | |
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| Alimony and Similar Payments | |
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| Miscellaneous Items of Income and Exclusions From Income | |
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| In General | |
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| Illegal Income: The Fantastic Saga of Wilcox, Rutkin and James | |
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| Income from Dispositions of Property | |
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| Overview | |
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| The Requirement of a Realization | |
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| In General: Macomber, Bruun, Cottage Savings | |
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| Marital Property Settlements and Other Satisfactions of Obligations: Davis; Farid-Es-Sultaneh | |
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| Computation of Gain or Loss Realized | |
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| Amount Realized | |
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| Adjusted Basis | |
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| Background | |
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| Cost Basis | |
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| In General | |
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| Mortgages and Other Debts of the Purchaser or Seller: Crane | |
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| Mortgaging Property Held: Woodsam | |
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| The "Footnote 37" Problem: Tufts; Diedrich | |
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| Adjustment of the Purchase Price | |
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| Bargain Purchases of Property by Shareholders or Employees | |
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| Miscellaneous Problems | |
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| Carryover Basis | |
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| Gifts; Taft | |
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| Transfers in Trust | |
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| Substituted Basis | |
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| Fair Market Value Basis: Property Acquired From a Decedent | |
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| Present Rule | |
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| Property Acquired From a Decedent: The Saga of Carryover Basis | |
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| Property Acquired From a Decedent: The Saga of Carryover Basis continued | |
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| Special Rules for Stock, Securities and Mutual Fund Shares | |
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| Adjustments to Basis: The Basis as History | |
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| Disallowance of Some Losses and Exclusion of Some Gains | |
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| In General | |
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| Losses From Sales of Residence or Other Personal-Use Property | |
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| Losses From Sales of Property in Activities Not Engaged in for Profit | |
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| Disallowance of Losses Versus Nonrecognition of Losses | |
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| Exclusion of Gain From Sale of Residence | |
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| Recognition of Gain or Loss | |
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| In General | |
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| Tax-Free Exchanges of Business or Investment Property of "Like Kind" | |
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| Overview | |
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| Mortgages | |
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| The Requirement That the Property Be of "Like Kind" | |
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| Real Property; Jordan Marsh | |
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| Personal Property | |
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| The Requirement That the Property Be Held for Productive Use in Trade or Business or for Investment | |
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| Three-Cornered Exchanges | |
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| Tax-Free Involuntary Conversions (Condemnations, Casualties) Where Proceeds Reinvested | |
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| General Rules | |
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| Involuntary Conversions of Real Estate | |
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| Other Tax-Free Transactions | |
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| Wash Sales of Stock or Securities | |
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| Losses on Sales and Exchanges Between Related Taxpayers | |
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| In general | |
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| "Related Taxpayers"; Constructive Ownership Rules | |
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| Use of Disallowed Loss by Buyer | |
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| Character of Gain or Loss: Capital Gains | |
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| The Preferential Treatment of Capital Gains | |
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| The Rules for Taxing Capital Gains and Losses | |
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| Background | |
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| The Mechanics | |
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| Capital Gain Rules Under the 1997 Act | |
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| Capital Loss Rules | |
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| Planning Implications | |
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| Holding Appreciated Property Indefinitely | |
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| Holding an Appreciated Capital Asset Longer Than Its Required Holding Period | |
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| Selling Property That Has Declined in Value | |
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| Combined Gains and Losses | |
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| Holding Period Problems; Short Sales | |
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| Tax Straddles | |
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| Definition of Capital Gains and Losses | |
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| Statutory and Judicial Rules | |
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| Inventory, Property Held Primarily for Sale to Customers | |
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| "Corn Products" Assets | |
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| Depreciable and Real Property Used in a Trade or Business | |
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| Section 1231 Treatment | |
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| Copyrights, Literary or Other Artistic Compositions Created by the Taxpayer, Memoranda Held by the Taxpayer and Similar Property | |
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| Patents | |
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| Recapture of Depreciation | |
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| Sale of Depreciable Property to a Related Party | |
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| Accounts Receivable | |
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| Transfers of Franchises, Trademarks and Trade Names | |
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| Cancellation of Lease or Distributor's Agreement | |
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| Retirement of Bonds | |
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| Worthless Securities | |
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| Bad Debts | |
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| General Comments on the Sale or Exchange Requirement | |
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| Planning Implications: Sale of a Going Business | |
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| Policy Aspects of Capital Gains Taxation | |
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| Exotic Wall Street Techniques Employed by the Wealthy to Avoid Capital Gains: of ESOP Sales, Upreits, Equity Swaps, Shorting Against the Box, Swap Funds, DECS and the Like: Congressional Response to Some of These Techniques | |
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| Assignment of Income: Who is Taxed and the Nature of the Tax | |
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| Background | |
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| Gratuitous Assignments of Income: Birth of a Metaphor | |
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| Assignments of Income for Consideration | |
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| Application of Assignment of Income Doctrine | |
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| Oil, Gas, and Other Minerals | |
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| Leases | |
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| Gratuitous Assignments | |
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| Assignments for Consideration-Cancellation of the Lease by Landlord or Tenant | |
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| Assignments for Consideration-Third Party Transactions | |
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| Trusts | |
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| Creation of the Trust | |
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| Related Topics | |
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| How to Pay for Law School (?): Below Interest Loans | |
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| Unearned Income of Children | |
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| Alimony | |
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| Assignment of Income Without Tears | |
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| Business Deductions | |
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| Structural Issues in General | |
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| Putting the Tax Code on the Back of an Envelope | |
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| The Deep Structure of the Tax System | |
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| The Statutory Structure of the Tax System | |
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| Deductions Arising Out of Business and Profit Seeking Activity | |
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| Common Business Expenses | |
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| Ordinary and Necessary Business Expenses | |
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| Travel and Transportation Expenses: Flowers; Hantzis; Andrews; Correll | |
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| The Dichotomy Between Deduction and Capital or Personal Expenses | |
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| Necessary Rental and Similar Payments; Starr's Estate; Fitzpatrick | |
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| Education Expenses | |
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| The Law; Hill; Coughlin | |
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| The Economics: What Does It Really Cost to Go to Law School? | |
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| Expenses for the Production of Income, or for the Maintenance of Investment Property: Higgins; Gilmore; Estate of Baier; Surasky; Myer J. Fleischman; Horrmann; Lowry | |
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| Miscellaneous Business and Pleasure Travel Expenses: Rudolph | |
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| Entertainment, Amusement and Recreation Expenses: Sutter; Cohan; Sanitary Farms | |
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| Limits on Deductibility of Business Meals: Sutter Lives | |
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| The Substantiation Requirement for Travel, Entertainment, and Business Gifts | |
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| Moving Expenses | |
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| Activities Not Engaged in for Profit | |
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| Office in the Home; Soliman | |
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| Rental of Vacation or Other Homes | |
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| Depreciation and Accelerated Cost Recovery | |
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| Background | |
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| Rationale for Depreciation | |
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| Inflation Problems | |
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| Basic Methods of Depreciation | |
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| The Myth That Accelerated Depreciation Stimulates Investment in Plant and Equipment | |
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| "Sinking Fund" Depreciation | |
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| The ACRS System; Sharp | |
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| Other Business Deductions | |
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| Depletion | |
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| Intangible Drilling and Development Costs | |
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| Bond Premium | |
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| Purchased Intangibles: Section 197; Newark Morning Ledger | |
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| Miscellaneous Rapid Write-Offs | |
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| Alimony and Similar Payments; The Marriage Tax | |
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| Alimony and Property Settlements | |
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| Property Settlements; Davis | |
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| The Marriage Tax: Once More With Feeling | |
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| Limitations on Deductions | |
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| In General | |
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| The Limit of Reasonable Compensation for Services | |
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| In General | |
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| The Problems of the Double Tax on Corporate Dividends | |
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| The Limit of Personal Expenses | |
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| Miscellaneous Personal Expenses: Smith | |
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| Education Expenses | |
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| The Limit of Capital Expenditures: Welch, Mt. Morris Drive-In; Midland Empire; Morton Frank; INDOPCO | |
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| The Limit of Public Policy | |
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| Background | |
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| Illegal Bribes, Kickbacks and Other Payments | |
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| Fines and Penalties | |
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| Treble Damage Payments Under the Antitrust Laws | |
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| Expenses to Influence Legislation and Elections | |
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| Other Limits | |
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| Expenses and Interest Relating to Tax Exempt Income: Tax Arbitrage | |
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| Sham Transactions or Transactions Lacking Economic Substance: Knetsch | |
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| Itemized Deductions and Personal Exemptions | |
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| Itemized Deductions | |
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| In General | |
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| Expenses of Tax Advice, Attorneys' Fees, and Litigation | |
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| Tax Advice and Litigation | |
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| Attorneys' Fees Generally | |
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| Interest | |
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| Taxes; Cramer | |
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| Casualties and Other Losses | |
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| Casualties | |
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| Other Losses | |
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| Bad Debts and Worthless Securities: Whipple | |
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| Bad Debts | |
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| Worthless Securities | |
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| Medical Expenses: Ochs | |
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| Charitable Contributions | |
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| In General | |
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| Percentage Limits | |
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| New Rules | |
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| Vehicle donations | |
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| Noncash Charitable Contributions | |
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| Floor on Miscellaneous Itemized Deductions | |
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| The Standard Deduction | |
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| Personal and Dependency Exemptions | |
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| Exemption Amount | |
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| Qualifying Child | |
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| Alternative Minimum Tax | |
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| Tax Planning | |
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| Introduction | |
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| Tax Shelters | |
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| The Building Blocks of Tax Shelters | |
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| The "At Risk" Limitations | |
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| In General | |
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| The Collapse of the Savings & Loan Industry | |
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| Passive Activity Losses | |
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| In General | |
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| Relationship Between the "At Risk" Rules and the Passive Activity Loss Rules | |
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| Judicial and Administrative Limitations: Franklin | |
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| Corporate Tax Shelters | |
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| Other Tax Avoidance Techniques | |
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| Corporate Inversion | |
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| Corporate Owned Life Insurance | |
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| Foreign Credit Cards | |
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| Tax Shelters Without Tears | |
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| Deferred Payment Sales: Logan | |
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| In General | |
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| The Installment Method of Reporting | |
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| Deferred Compensation: A Survey | |
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| In General | |
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| Non-Qualified Plans | |
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| Current Razzle-Dazzle Executive Compensation Techniques | |
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| Incentive Stock Options | |
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| Qualified Plans | |
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| Festival of IRA's | |
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| Deductible IRA | |
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| Roth IRA | |
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| Nondeductible IRA | |
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| Spousal IRA | |
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| Education IRAs (now referred to as Coverdell Education Savings Accounts) | |
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| Strategies for Investing in IRAs | |
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| Section 529 plans-Qualified Tuition Programs | |
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| A Bird's Eye View of Sophisticated Estate Planning | |
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| Tax Accounting | |
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| In General | |
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| Transactional Problems | |
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| Annual Accounting: Sanford & Brooks | |
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| Claim of Right: North American Oil; Lewis | |
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| The Tax Benefit Rule | |
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| In General: Alice Phelan Sullivan Corp. | |
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| Equitable Applications: Hillsboro | |
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| Accounting Methods | |
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| Overview | |
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| The Cash Method | |
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| In General | |
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| Constructive Receipt | |
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| Accounts Receivable | |
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| Application: Executive Compensation Arrangements | |
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| Prepaid Expenses | |
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| The Accrual Method | |
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| In General | |
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| Income | |
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| Deductions: General Dynamics | |
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| Current Law: Economic Performance | |
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| Prepaid Income: American Automobile Association; Schlude | |
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| Credits | |
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| In General | |
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| Child etc. Care Credit: Smith | |
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| Other Credits | |
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| Speculations on an Investment Tax Credit | |
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| Earned Income Credit ("EIC") | |
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| Child Tax Credit | |
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| Hope Scholarship Credit and Lifetime Learning Credit: Recap of Tax Assistance to Education | |
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| Deduction for Qualified Tuition | |
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| Deduction of Interest on Educational Loans | |
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| The HOPE Scholarship Credit and the Lifetime Learning Credit | |
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| Ethics | |
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| General Comments | |
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| Standards for Advising Taxpayers on Return Positions | |
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| ABA Formal Opinion 85-352 | |
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| IRS Circular 230-Best Practices and Other Standards | |
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| Section 6694 | |
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| Tax Shelter Rules | |
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| ABA Opinion 346 | |
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| Circular 230-Tax Shelter Opinions | |
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| I.R.C. [section] 6700-Abusive Tax Shelters | |
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| Conclusion | |
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| Appendix: The Miraculous Effects of the Time Value of Money | |
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| Capital Gains Rules | |
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| Table of Cases | |
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| Table of Internal Revenue Code Sections | |
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| Table of Treasury Regulations | |
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| Table of Revenue Ruling | |
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| Index | |