Academic journal article Issues in Accounting Education

Principles of Taxation for Business and Investment Planning

Academic journal article Issues in Accounting Education

Principles of Taxation for Business and Investment Planning

Article excerpt

SALLY M. JONES, Principles of Taxation for Business and Investment Planning, 2004 Edition (New York, NY: McGraw-Hill/Irwin, 2004, pp. xii, 532).

The 2004 edition of this text continues to provide a comprehensive introduction to the federal income tax system, incorporating the organizational layout and topical coverage proposed by the AICPA Model Tax Curriculum. It offers users a "unique approach" to learning about topics typically found in introductory texts, and even includes a chapter on international and multistate tax issues.

It seeks "to teach students to recognize the major tax issues inherent in business and financial transactions." Thus, it emphasizes general tax rules and provides significantly less detailed coverage of exceptions and special considerations. This makes the text much easier to read than typical compliance-oriented ones, although instructors who prefer a compliance-oriented pedagogy will most likely find it lacking in technical details.

For instructors not wanting to place more emphasis on understanding the role taxes play in making financial decisions, numerous tax-planning examples using net present value (NPV) of aftertax cash flows are included throughout the text. For students who have not been exposed to NPV concepts, a simple, yet helpful, introduction is provided early in the text, something not often found in tax textbooks.

Because the text is compatible with the AICPA Model Tax Curriculum, more emphasis is placed on business activities and organizations than on individual taxation. For example, unlike many texts, the chapter on accounting methods includes a very useful introduction to book/tax accounting differences. GAAP is contrasted with tax law income measurement perspectives, introducing students to the difference between tax expense per books and tax payable. Another example is the discussion on sale of a home. It is included in the last chapter entitled, "Tax Consequences of Personal Activities," rather than in the usual chapter on nontaxable exchanges. For instructors who are used to following the individual tax formula, this topical emphasis and organizational layout may take some adjusting to. …

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