First Assignment:

Look over the Internal Revenue Code (Title 26, United States Code). We will look at the organization of the IRC, and I will pass out a table of contents for Title 26 (unfortunately out of date but comprehensive to its date).

Find Subchapter K in the Internal Revenue Code (the "Code"). Where does it start? Where does it end? How is it organized? Same questions for Subchapter C and Subchapter S in the Code.

These three subchapters are the three schemes of business taxation in the Code.

Look at the Regulations in your anthology, and notice that Treasury Regulations are numbered to correspond with the Code sections to which they pertain, often with the prefix “1.“ or “301.“, and followed by a dash and numbered subdivisions. E.g. “301.7701-1 Classification of Organizations for Federal Tax Purposes.” Find and mark the regulations under Subchapters C, K and S in your Code anthology. I use Post-It index tabs for mine.

Read Chapter 1 in Burke & Friel’s Introduction to the Taxation of Business Organizations and Choice of Entity. (“B&F”)

This is an overview and introductory reading. However I suggest you begin now, referring to Chapter 1, to list the types of business organizations your authors discuss, and create a chart or table for yourself, that organizes in separate columns the key differences among them.

 

In the Code, read the following sections:

§1; §11; §701; §1366.

§7701(a) (1 through 11, 13, 14, 23, 24, and 42 through 45)

Read Internal Revenue Regulations:

§301.7701-3(a), (b) and (c).

 

Concepts important to recall from Tax I:

Ø Basis §1012

Ø Ordinary income vs. capital gain §1222

Ø How to calculate gain/loss from transactions in property §1001

Ø Gain realized vs. gain recognized

Eisner v. Macomber 252 U.S. 189(1920); Cottage Savings, 499 U.S. 554 (1991)

Ø Adjusted basis §§1011 & 1016

Ø Holding period §1223

Ø Accounting period/taxable year §441

Ø Accounting method §446

Ø Depreciation §167; §168