Abandoned Assets, Business Expense ...394 About The

699

INDEX

Abandoned assets, business expense ...... 394 Allocation...... 391 About the authors ...... iii Business expense...... 391 Above-the-line-deductions ...... 387 All risk contract ...... 333 Acceleration of payment clause, suretyship ...... 294 Alteration ...... 230, 235 Acceptance ...... 95,217 Alternative minimum tax...... 443 Bankruptcy...... 149 Other adjustments...... 444 Contract...... 93 Tax preference items...... 444 Draft ...... 217 Alternatives to the writing requirement ...... 100 Of collateral ...... 305 Amortization...... 521 Offer ...... 95,263 AMT FORMULA ...... 443 Accident and health plans, fringe benefit ...... 370 Annual Accommodation Exclusion, gift tax ...... 673 Endorser ...... 224 Reports, securities ...... 180 Party, negotiable instruments ...... 228 Annuity contracts ...... 357, 362 Accord and satisfaction ...... 112 Anomalous endorsement ...... 224 Accountant-client privilege ...... 63 Answer for the debt of another, statute of frauds . . . 100 Accounting Anticipatory Coupled with an interest ...... 510 Breach ...... 112 Methods ...... 426, 610 Repudiation ...... 276 Accrual ...... 428 Antifraud provisions...... 181 Principles...... 16 Antitrust...... 186 Accounts, intangible collateral ...... 293 Apparent authority...... 82 Accredited investor ...... 184 Artisans lien ...... 135 Accrual method ...... 428 Assessment of deficiency...... 448 Accumulated adjustment account ...... 614 Asset depreciation range ...... 516 Acknowledgments...... iv Assignees ACRS: 1981-1986...... 516 Contract...... 109 Act...... 84 Rights ...... 110 Age Discrimination in Employment ...... 193 Assignment ...... 303, 325 Americans with Disabilities ...... 194 Lease ...... 325 Antifraud provisions, 1933 ...... 179 Of contract rights ...... 109 Antitrust Improvements Act of 1976...... 188 Of income ...... 361 Discreditable ...... 16,31 Security interests ...... 303 Of parties, agency termination ...... 76 Warranties and rights ...... 109 ADA...... 194 Assignor’s warranties ...... 110 Additional standard deduction...... 433 At-risk rules ...... 397 ADEA ...... 193 S corporation ...... 614 Adjusted Basis ...... 478 Attachment of security interests ...... 291 Adjustments ...... 148 Attorney, power of...... 76 To basis, partnership...... 635 Attornment ...... 325 Administration ...... 611 Auctions ...... 94 Bankruptcy proceeding ...... 140 Authority of agent ...... 82 S corporation ...... 611 Authorized signature ...... 227 Adoption expenses ...... 438 Authors, about ...... iii Fringe benefit ...... 370 Automatic perfection ...... 297 ADR...... 516 Awards ...... 358, 364 Adverse possession ...... 321 Advertising and other forms of solicitation .... 17,32 After-acquired property clause ...... 294 Bad debts, corporate taxable income...... 515 Agent ...... 75 Bankruptcy...... 140, 151, 589 Authorized signature, authority and liabilities . . . 82 Agency termination ...... 76 Breach of duty ...... 83 Code ...... 140 Duties to ...... 78 Reorganization ...... 589 Remedies, principals breach ...... 78 Bank transactions ...... 235 Agreement ...... 93 Bargain Discharge by ...... 112 And sale deed ...... 327 Of an executor or an administrator ...... 100 Purchase, income ...... 358 AICPA ethics ...... 13 Bargained-for exchange...... 97 Alimony ...... 389 Bartered services or goods, income...... 361 And separate maintenance payments, income . . 356 Deduction ...... 389

Basis...... 476, 587 Certificate of deposit ...... 216 Inherited property adjusted basis ...... 478 Certified check ...... 218 Liabilities ...... 477 CESA ...... 388 Lump sum ...... 477 CF...... 271 Of shareholder in boot ...... 580 CGS...... 394 Partners...... 632 Change Partnership ...... 632 In governing law ...... 298 Property converted into business use ...... 479 Of law agency termination ...... 77 Sale of stocks gifts ...... 477 Chapter Shareholder ...... 580 13...... 149 Subsidiary liquidation...... 587 7 liquidation ...... 140, 143 Bearer 9 adjustment of debts of a municipality ...... 140 Form ...... 296 Character...... 672 Paper ...... 220 Of gain ...... 483 Beneficiary...... 672 Charitable Contract...... 108 Contributions ...... 403 Of a warranty ...... 266 Deduction ...... 674 Taxable income ...... 672 Chattel paper ...... 293, 299 BIG...... 617 Check ...... 218, 235 Bilateral contract...... 95 Negotiable instruments ...... 235 Blank endorsement, negotiable instruments ...... 222 Child Bona fide purchaser ...... 327 And dependent care credit ...... 437 Bond ...... 150 Tax credit...... 441 Compensated surety ...... 150 Children...... 189 Repurchase ...... 510 CIA books ...... i Books, Gleim ...... i CIF...... 271 Boot ...... 580 Civil liability ...... 178 Shareholder property contribution ...... 580 Securities Act of 1933 ...... 57 Breach Securities Exchange Act of 1934...... 59 Defenses ...... 273 Claim Of duty, agent...... 83 Bankruptcy...... 140 Built-in gains tax ...... 617 For refund ...... 447 Business Clayton Act of 1914...... 187 Deduction ...... 387 Closed-end credit ...... 137 Expense ...... 390 CMA books ...... i Gifts ...... 393 Cobra and ERISA ...... 195 Income ...... 354 Code of Professional Conduct ...... 13 Property...... 485 Coinsurance clause...... 334 Regulation by government ...... 175 Collapsible corporation ...... 583 Use of home...... 394 Collateral ...... 291 Buyer ...... 273, 300 Collection...... 449 Collins, William A...... iii Combat zone compensation ...... 367 Commercial impracticability ...... 108 C&F...... 271 Commissions Cafeteria plans ...... 371 Interpretations ...... 32 Cancelation ...... 234, 335 Referral fees ...... 17,32 Insurance...... 335 Committee of unsecured creditors...... 148 Cancel sales contract ...... 276 Commodity Capacity, contracts ...... 100 Account, collateral...... 293 Capital Contracts, collateral ...... 293 Accounts partners ...... 633 Common-law lien ...... 135 Contributions ...... 510 Community property ...... 321 Cost recovery ...... 516 Compensated sureties...... 150 Gains and losses ...... 479 Compensation ...... 354, 391 Recovery corporate distribution...... 582 Business expense...... 391 Capitalized acquisition costs...... 476 Corporate taxable income ...... 513 Cash Injury or sickness, income exclusion ...... 365 Method ...... 426 Compensatory damages ...... 113 Proceeds ...... 301 Compliance with Standards ...... 16 Cashiers check...... 218 Composition with creditors ...... 139 Casualty Computations And theft losses ...... 395, 401 Estate tax and credits ...... 678 Insurance...... 334 Gift tax ...... 674 Or theft losses ...... 401 Concurrent C corporation ...... 509 Estates ...... 319 Celler-Kefauver Act of 1950 ...... 188 Liens ...... 136 Certificated security...... 296 Conditional endorsement ...... 223 Copyright © 2004 Gleim Publications, Inc. and/or Gleim Internet, Inc. Index 701

Conditions ...... 106 Criminal liability Confidential client information...... 16,30 1934 Act ...... 61 Confidentiality...... 63 Agency ...... 81,84 Conflict of interest ...... 28 Securities Act of 1933 ...... 59 Consequential damages ...... 113 Current Consideration ...... 97,98 Reports, securities ...... 180 UCC...... 264 Current distributions ...... 640 Consigned goods, PSMI ...... 291 Curtesy ...... 676 Consolidated Omnibus Budget Reconcilation Act . . 195 Customary partner services ...... 638 Consolidation ...... 589 Constructive Condition ...... 107 Death Notice ...... 78,327 Agency termination ...... 77 Ownership ...... 585 Benefits, fringe benefit...... 370 Receipt ...... 427 Offerer or offeree ...... 95 Consulting services, definitions and standards .... 34 Debt Consumer Nondischargeable ...... 146 Credit Protection Act ...... 137 Of another ...... 394 Goods ...... 292 Debtor ...... 140, 150, 292 Contingent Contract...... 151 Fees ...... 16,30 Remedies ...... 306 Interest ...... 319 Rights ...... 306 Contracts ...... 93,100, 103 Debtor- Beneficiaries ...... 108 Creditor relationships...... 135 In restraint of trade ...... 102 In-possession ...... 148 Performance ...... 106 Decedent, income in respect of...... 358, 671 Within the statute of frauds...... 99 Deductions...... 387, 634 Contractual And credits, combined, partnership ...... 645 Defenses ...... 55 Dividends-received ...... 512 Liability From gross estate ...... 677 Third parties, agency...... 78 Of a corporation ...... 511 To third parties, agency ...... 83 Partnership ...... 634 Contradictory terms...... 221 Deeds ...... 325 Contributors and reviewers...... ii Default ...... 304, 330 Control ...... 296, 579 Classification ...... 509 Or possession, perfection...... 295 Mortgage ...... 330 Copyright ...... 188 Defective product ...... 267 Core proceedings ...... 142 Defenses Corporate Accountant...... 58 Basis in property...... 580 Contractual ...... 55 Distribution gain ...... 581 Negligence...... 56 Liquidation ...... 581 Surety ...... 151 Misstatement ...... 182 To liability ...... 229 Tax...... 579 UCC...... 273 Taxable income ...... 509 Del credere agent ...... 76 Corporation Delivery ...... 296, 327 Deductions...... 511 Control ...... 296 Income tax formula ...... 510 Ex-ship ...... 271 Cost-insurance-freight ...... 271 Demand instrument...... 225 Cost of goods sold ...... 394 Demolition, business expense ...... 394 Costs ...... 674 Dependent Cosureties ...... 150 Care assistance ...... 370 Counteroffer...... 94 Status ...... 434 Cover, defense ...... 273 Depletion ...... 524 Coverdell Education Savings Accounts ...... 388 Deposit account ...... 293 CPA books...... i Depreciation...... 393 Cramdown bankruptcy...... 149 Destination contract ...... 268, 270 Credit for the elderly or disabled ...... 437 Destruction ...... 95 Creditor ...... 140, 150 Detour ...... 80 Beneficiary...... 108 Direct Debtor relationships ...... 135 Liability ...... 79 Duty to disclose ...... 150 Skip, GSII ...... 679 Rights, security interests ...... 303 Disability discrimination ...... 194 Credits Disabled access credit...... 439 Combined, partnership ...... 645 Estate ...... 678

Discharge ...... 111, 146, 233 Eligible parties, Chapter 7 ...... 143 Bankruptcy...... 146, 230 Employee By agreement...... 112 Achievement awards, business expense ...... 393 By operation of law ...... 112 Benefits ...... 368 Of any party ...... 231 Expenditures ...... 404 Of debt ...... 511 Fringe benefits, S corporation...... 612 Of indebtedness income ...... 357 Retirement Income Security Act ...... 195 Surety ...... 152 Employer-provided life insurance ...... 369 Types ...... 111 Employment...... 189 Disciplinary systems within the profession ...... 38 Discrimination...... 192 Disclaimer of warranties...... 266 Endorsement...... 222, 230 Disclosed and nondisclosed principals...... 81 Endowment contracts ...... 357 Discrimination...... 192 Enforceable contract ...... 97 Dishonor ...... 232 Enforcement, lien ...... 136 Dismissal ...... 147 Entertainment...... 391, 405, 514 Disparate Business expense...... 391 Impact ...... 193 Equal Credit Opportunity Act ...... 138 Treatment ...... 193 Equal Pay Act...... 195 Disposition of installment obligations ...... 484 Equipment ...... 293 Disproportionate distributions ...... 642 Equitable mortgage ...... 330 Distributable net income, estates ...... 670 ERISA ...... 195 Distributions ...... 614 Estate ...... 585, 667, 669 Deduction, estates and trusts ...... 670 Credits ...... 678 Of partnership ssets ...... 640 Income ...... 358 Of property...... 615, 640 In land ...... 318, 322 S corporation ...... 614 Or trust ...... 358 Separate ...... 581 Redemptions ...... 585 Distributive share, partners...... 634 Tax...... 671, 675, 678 Division, reorganization ...... 589 Tax return ...... 678 DNI...... 670 Estimated tax payments...... 445 Documents ...... 293 Estoppel ...... 100, 136 Domestic service ...... 190 Agency by ...... 75 Dower ...... 676 Contract by ...... 100 Draft ...... 216 Ethics rulings on responsibilities to clients ...... 30 Drawers or makers signature ...... 230 Exceptions ...... 144, 151 Due Parol evidence rule ...... 106 Care, ethics principle...... 14 Surety reimbursement ...... 151 Diligence ...... 58 Voidable preferences ...... 144 Durable agency ...... 76 Exclusions ...... 364 Duress ...... 104 Income ...... 361 Economic...... 105 Exclusive dealing, antitrust ...... 187 Duties ...... 83 Exclusive-use test, home office test...... 395 Agent ...... 78 Excused nonperformance ...... 272 Lessor ...... 323 Executor of administrator agreements, statute of Obedience ...... 83 frauds ...... 100 Parties to contract ...... 106 Exempt assets, bankruptcy ...... 143 Principal ...... 83 Exemptions ...... 182 Tenants ...... 324 Antitrust...... 188 To disclose, creditor ...... 150 Securities...... 182 Existing Goods ...... 269 Use...... 321 E&P...... 614 Exoneration, surety ...... 152 EA books...... i Expectation interest...... 113 Easements...... 321 Express ECOA ...... 138 Actual authority, agent...... 82 Economic duress ...... 105 Condition ...... 107 Education expenses ...... 405 Contract...... 94 EEOC ...... 193 Grant...... 321 Effects of Warranties ...... 265 Illegality ...... 102 Extending time of payment ...... 152 Termination on authority ...... 78 Extension agreement, debtor ...... 139 EIC...... 442 Extraordinary dividend, corporate ...... 582 Elections Extreme duress ...... 229 Partnership ...... 634 S corporation ...... 609 Electronic chattel paper ...... 296 Eligibility, S corporation ...... 609

Fair Frolic, agency...... 80 Credit Reporting Act ...... 138 Frustration of purpose ...... 108 Debt Collection Practices Act ...... 138 FTC rule, shelter principle ...... 226 Labor Standards Act ...... 194 Fungible goods...... 269 Family partnership ...... 637 FUTA ...... 191 Farm products, tangible personal property, Taxes ...... 444 collateral ...... 292 Future FAS vessel ...... 271 Advances...... 300 FCPA ...... 182 Advances clause ...... 294 FCRA ...... 138 Goods ...... 269 FDCPA ...... 138 Interest ...... 319 Federal Insurance Contributions Act ...... 189 Securities regulation ...... 175 Gain or loss ...... 487 Statutory liability ...... 57 Gambling winnings, income ...... 358 Trade Commission Act of 1914 ...... 187 Garnishment ...... 139 Unemployment Tax Act ...... 191 General Fee simple, absolute ...... 318 Agents...... 76 Fellowship, income ...... 358 Assignment for the benefit of creditors ...... 139 FICA ...... 445 Business credit ...... 439 FICA, Social Security tax ...... 444 Recapture ...... 617 Fictitious payee ...... 230 Intangible...... 293 Fiduciary duty...... 83 Standards, ethics rule ...... 15 Filing Warranty deed ...... 327 A financing statement, perfection by ...... 295 Gift ...... 364, 478, 513 Requirements...... 446 Corporate taxable income ...... 513 Status ...... 431 Income exclusion ...... 364 Financing statement ...... 138 Partnership interest ...... 637 Fines, corporate taxable income ...... 515 Property...... 486 Fire insurance ...... 334 Splitting, gift tax ...... 674 Firm offer rule...... 262 Tax...... 673 Fixed amount of money ...... 219 Return ...... 675 Fixtures ...... 332 Gleim, Irvin N...... iii Vs real estate, security interests ...... 302 Good faith ...... 108, 225, 262 FLSA...... 194 Goods ...... 292 Foreclosure ...... 304, 331 Collateral ...... 292 Foreign Contract covering ...... 261 Corrupt Practices Act...... 182 Security interest ...... 291 Tax credit...... 439 Governing law ...... 298 Travel ...... 391 Government regulation of business ...... 175 Foreign-earned income exclusion ...... 367 Gratuitous agents ...... 76 Foreseen third parties ...... 57 Gross Form Estate tax, credits, valuation...... 675 10-K ...... 180 Income ...... 349, 510 10-Q ...... 180 Receipts ...... 610 8-K...... 180 Group Of organization Boycotts, antitrust ...... 186 Ethics rule ...... 17 Term life insurance ...... 190 Interpretations ...... 32 Growing crops ...... 269 Formal requirements, mortgage ...... 330 GSTT ...... 679 Formation ...... 579 Guaranteed payment, partnership ...... 638 Agency ...... 75 Guarantor ...... 150, 228 Contract...... 93 Corporate ...... 579 Partnership ...... 631 Suretyship contract ...... 150 Hasselback, James R...... iii Tax year ...... 631 Hazard ...... 333 Termination ...... 75 Head of household ...... 432 Former practitioners ...... 19 Health plans, fringe benefit...... 370 Formula Hobby losses ...... 399, 405 Income tax, estates and trusts ...... 669 Holder ...... 221, 300 Individual income tax...... 349 In due course ...... 224, 300 Fraud ...... 103, 229 Holding period ...... 482, 632 Contract...... 103 Hostile fire, insurance ...... 334 In the inducement ...... 103 Hotelkeepers lien ...... 136 Fraudulent transfers, bankruptcy...... 144 Freehold estates...... 318 Fringe benefits ...... 368 Copyright © 2004 Gleim Publications, Inc. and/or Gleim Internet, Inc. 704 Index

Identifiable proceeds ...... 301 Intangible...... 394 Identify and resell goods, defense ...... 275 Collateral ...... 293 Illegal Expense ...... 394 Activities ...... 359 Property...... 261 Discrimination...... 193 Intangible collateral ...... 293 Illegality, offer ...... 95 Integrity ...... 14 Impairment of right of recourse or collateral ...... 235 And objectivity ...... 15,28 Implication, easement...... 321 Ethics rulings ...... 15,28 Implied ...... 94 Interpretations ...... 28 Actual authority...... 82 Ethics Principle...... 14 Condition ...... 107 Intended beneficiary ...... 108 Contract...... 94 Interest ...... 320, 355 Warranty of Expense, corporate taxable income...... 515 Authority ...... 84 Income ...... 355 Fitness for a particular purpose...... 265 Insurable ...... 336 Merchantability ...... 265 Joint tenancy ...... 320 Implied-in- Land ...... 99 Fact conditions ...... 107 State and local government obligations ...... 365 Law condition ...... 107 Internal Revenue Service Restructuring and Reform Impostor ...... 230 Act of 1998 ...... 63 Imputed interest ...... 360 Interpretations ...... 32 Incapacity ...... 151 AICPA ethics ...... 14 Incentive stock options ...... 370 And rulings...... 18 Incidental damages, defense ...... 275 Inter vivos gifts ...... 673, 680 Income ...... 355, 672 Intoxication ...... 101 Assignment ...... 361 Intrastate offerings ...... 183 Business ...... 354 Inventory ...... 292, 429 Estate or trust...... 358 Investment Forecast method...... 525 Expenses...... 404 From life insurance ...... 357 Income ...... 355 Gross ...... 349, 510 Interest expense ...... 402 In respect of a decedent ...... 358, 671 Property...... 293, 299 Investment ...... 355 Involuntary Tax...... 349 Bankruptcy...... 140 Formula...... 669 Conversions...... 489 Incompetence offerer or offeree ...... 95 IRA contribution ...... 388 Incomplete instrument ...... 221 IRS discipline of accountants ...... 39 Indebtedness discharge, income...... 357 Issuer ...... 176 Indemnity...... 333 Independence ...... 14,19 Ethics rulings ...... 26 Joint Ethics Enforcement Program ...... 38 Impaired ethics rulings...... 26 Judgement creditor ...... 136 Rule ...... 14 Judicial Standards Board...... 14 Action, repossession by, security interests .....304 Independent contractors ...... 80 Decree, foreclosure...... 331 Individual income tax rates and brackets ...... 425 Lien ...... 136 Inducements Jury duty pay ...... 389 Fraud ...... 103 Income ...... 358 Infancy ...... 230 Inherited property ...... 478, 486 Land Innocent misrepresentation ...... 104 Interest in, statute of frauds ...... 99 Insanity, agency termination ...... 76 Sale contract ...... 330 Insider ...... 144, 181 Lapse of time ...... 94 Preferential transfer...... 144 Large partnership election ...... 644 Securities...... 181 Leasehold improvements ...... 479 Trading ...... 181 Lease improvements ...... 367 Insolvency ...... 140 Legal Inspection notice...... 327 Liability, CPAs ...... 53 Instruments ...... 293, 299 Purpose contracts ...... 101 And chattel paper, buyer ...... 299 Legality ...... 100 Semi-intangible collateral ...... 293 Lessor-lessee...... 322 Insurable interest ...... 269, 336 Lessors Insurance...... 333 Duties ...... 323 Expense, business expense ...... 392 Rights ...... 323 Payments for living expenses, income Letter-of-credit right...... 296 exclusion ...... 367 Levy ...... 139 Insuring an employee ...... 514 Copyright © 2004 Gleim Publications, Inc. and/or Gleim Internet, Inc. Index 705

Liabilities ...... 477, 580, 587 Minority shareholders, subsidiary liquidation ...... 587 After delegation ...... 111 Minors, contracts ...... 100 Agent ...... 82 Mistake, contract formation ...... 104 CPAs ...... 53 Mitigation of the statute of limitations ...... 449 Defenses and rights ...... 226 Modifications, UCC ...... 264 Of a surety ...... 150 Modified acceptances, offer ...... 263 Partnership ...... 631, 640 Money distributions ...... 640 Shareholder property contribution ...... 580 Monopoly...... 186 Subsidiary liquidation...... 587 Moral consideration...... 97 To third parties ...... 56 Mortgages and other liens ...... 328 Licensing statutes ...... 102 Movable property ...... 261 Liens ...... 135 Moving Arising by operation of law ...... 302 Deduction ...... 389 Creditor ...... 299 Expenses...... 361 Life estate ...... 319 MSAs ...... 390 Lifetime learning credit...... 438 Multiple LIFO recapture ...... 617 Insurance coverage...... 336 Like-kind exchanges ...... 488 Support agreement ...... 436 Limited liability company ...... 509 Mutual Liquidated damages ...... 113, 277 Assent, contracts ...... 103 Liquidating distributions ...... 642 Rescission ...... 112 Liquidation ...... 139, 143 Mutuality of obligation ...... 97 Corporate ...... 585 Listed property and automobiles ...... 519 Listing agreement ...... 326 Name of organization ...... 17 LLC...... 509 Nature of collateral ...... 292 Loan costs ...... 393 Necessity, easement ...... 321 Loans from financial institution clients, Negligence...... 267 independence...... 21 Defenses of ...... 56 Lodging and meals, fringe benefit ...... 370 Liability for ...... 54 Long-term contracts ...... 430 Negotiability requisites...... 218 Losses Negotiable And limits...... 395 Document of title...... 300 Corporate Instruments ...... 215 Liquidation ...... 586 Negotiation ...... 221 Unrecognized ...... 581 Net operating loss ...... 396, 525 From sales or exchanges of business property . . 387 NOL...... 396, 525 Partnership ...... 636 Nonassignability, insurance ...... 335 Lump sum ...... 477 Noncore proceedings, bankruptcy ...... 142 Nondischargeable debts ...... 146 Nondisclosed and disclosed principals...... 81 MACRS: 1987 and after...... 517 Nonexistent principal ...... 81 Maintenance payments, separate, income ...... 356 Nonmaterial breach...... 111 Marital deduction gift tax ...... 674 Nonpartner capacity ...... 639 Marketable title ...... 325 Nonrecognition transactions Markets, securities ...... 176 Involuntary conversions ...... 489 Married Filing a Like-kind exchanges ...... 488 Joint Return ...... 431 Nonrefundable personal credits ...... 437 Separate Return ...... 431 Not enforceable ...... 97 Materialmans lien ...... 136 Notice ...... 327 Real property ...... 332 Notification, duty of agent...... 83 Meals ...... 391 Not performable within 1 year, statute of frauds . . . 99 And lodging, fringe benefit ...... 370 Novation ...... 112 Business expense...... 391 Mechanics lien ...... 136 Real property ...... 332 Obedience, duty of agent ...... 83 Medical ...... 674 Objectivity and independence, ethics principle .... 14 Costs, gift tax ...... 674 Obligations...... 269, 291 Expenses, deductible ...... 400 Obligee ...... 111, 150 Insurance reimbursements, estate tax ...... 676 Obligor ...... 150 Reimbursement plans, business expense .....394 Occupational Safety and Health Act ...... 192 Savings account, deduction ...... 390 Offer ...... 94,262 Mental incompetence ...... 101 And acceptance ...... 93 Merchants ...... 261 Contract...... 93 Merger ...... 589, 644 Offeree ...... 95 Partnership ...... 644 Offeror...... 95 Reorganization ...... 589

OID...... 361, 515 Perfection ...... 294 Income ...... 361 By filing a financing statement ...... 295 Open-end Of security interests ...... 294 Credit ...... 137 Perfect tender rule ...... 270 Mortgage ...... 329 Performance ...... 111, 269 Operating days method ...... 524 Contracts ...... 106 Operation of law Discharge ...... 111 Agency termination ...... 76 Peril ...... 333 Discharge ...... 112 Periodic tenancy ...... 322 Operations, S corporation ...... 611 Per se violations, antitrust ...... 186 Order form ...... i Personal Organization Defenses ...... 231 And syndication fees ...... 633 Exemptions ...... 434 Expense ...... 511 Phaseout ...... 436 Original issue discount...... 361 Spouse, dependent status ...... 434 Corporate taxable income ...... 515 Expense ...... 401 Income ...... 361 Financial planning, ethics...... 35 OSHA ...... 192 Holding company ...... 510 Other Service corporation ...... 510 Adjustments ...... 444 Personal thanks ...... ii Gross income ...... 358 PHC...... 510 Output contract...... 110 PII...... 610 Overall limitation on itemized deductions ...... 405 Tax, S corporation...... 616 Ownership, property ...... 318 Place of payment ...... 221 Plan of reorganization ...... 148 PMM...... 329 PMSI...... 291, 301 PAL, limitation rules ...... 398 Policy insurance ...... 333 Parol evidence Political contributions...... 394, 674 Rule ...... 105 Business expense...... 394 UCC...... 264 Gift tax ...... 674 Parsonage rental value, income exclusion ...... 367 Possession ...... 320 Partial liquidation ...... 585 Joint tenancy ...... 320 Partially Of collateral, security interests ...... 303 Disclosed principal ...... 81 Or control, perfection by...... 295 Integrated agreement ...... 106 Possessory interest...... 299 Parties to an issuance ...... 176 Possibility of reverter ...... 318 Issuer, securities...... 176 Post-effective period, securities ...... 178 Partners Power of attorney ...... 76 Basis...... 632 Practice ...... 14 Capital accounts ...... 633 Pre-1981 property ...... 516 Distributive share ...... 634 Preexisting legal duty, consideration ...... 97 Purchased interest ...... 632 Preferential transfer, bankruptcy ...... 144 Share of partnership income...... 358 Prefiling, period securities ...... 177 Taxable income ...... 633 Preliminary prospectus, securities ...... 177 Partnership ...... 631 Premature withdrawal penalties ...... 389 Asset, distribution ...... 640 Prepaid income ...... 428 Basis...... 632 Prescription ...... 321 Family ...... 637 Easement ...... 321 Gain ...... 632 Presentment...... 228 Liabilities ...... 640 Warranties ...... 228 Taxable income ...... 633 Price ...... 94 Tax administration...... 638 Price-fixing, antitrust ...... 186 Tax year ...... 633 Primarily liable ...... 227 Trust and estates ...... 509 Principals...... 150 Part performance ...... 107 Breach, agents remedies ...... 78 Passage of title...... 269 Disclosed and nondisclosed ...... 81 Passive Liabilities ...... 78 Activity ...... 398, 614, 636 Priorities in investment property ...... 301 Investment income tax...... 616 Priority Past consideration ...... 97 Creditors ...... 145 Patent ...... 188 Perfected security interests ...... 300 Payment ...... 137, 234 Unperfected security interests...... 299 Of tender ...... 137 Private Pensions ...... 357 Sale, security interests...... 304 Income ...... 357 Securities Litigation Reform Act of 1995...... 61 Privileged communication ...... 63 Prizes, income ...... 358, 364 Copyright © 2004 Gleim Publications, Inc. and/or Gleim Internet, Inc. Index 707

Procedure ...... 590 Record Corporation tax return due date ...... 590 Keeping...... 447 Proceeding, bankruptcy adminstration ...... 140 Notice ...... 327 Proceeds ...... 293 Recording ...... 327 Product liability ...... 267 Deeds ...... 325 Products, Gleim ...... i Mortgage ...... 330 Professional Recover Associations...... 509 Damages for buyer’s wrongful repudiation, Responsibilities ...... 13 defense ...... 276 Standards ...... 64 Goods Profit ...... 321 From insolvent Promise...... 93,216 Buyer, defense ...... 275 Negotiable instruments ...... 216 Seller, defense ...... 274 Promissory In transit, defense ...... 275 Estoppel ...... 98 Price plus incidental damages, defense ...... 275 Note ...... 216 Redemption ...... 584 Proof of claim, bankruptcy ...... 145 Stock...... 584 Property...... 485 U.S. savings bonds Converted into business use ...... 479 Educational expenses, income exclusion ....365 Distributions, S Corporation ...... 615 Red herring prospectus, securities ...... 177 Insurance...... 317, 334 Referral fees Transactions ...... 475 Ethics rule ...... 17 Basis...... 476 Interpretations ...... 32 Capitalized acquisition costs...... 476 Reformation ...... 114 Uniform capitalization rules ...... 476 Registered form ...... 296 Pro rata clause, insurance ...... 336 Registration Prospectus, securities ...... 178 Securities...... 176 Protected purchaser of securities ...... 300 Statement ...... 176 Proxy solicitation...... 180 Regulation A ...... 183 PSC...... 510 Reimbursed employee expenses, deduction...... 387 Public Reimbursements...... 151 Interest, ethics principle ...... 14 For moving expenses ...... 361 Policy, business expense...... 394 Surety ...... 151 Sale, security interests...... 304 Reincorporation ...... 589 Publicly traded partnerships ...... 509 Reorganization ...... 589 Punitive damages ...... 113 Rejection Purchase money security interest ...... 291 Nonconforming goods, defense ...... 273 Offer ...... 94 Related party sales ...... 484 Release...... 112 Qualified Contract...... 137 Educational loan, deduction ...... 390 Of Endorsement...... 223 Debtor, effect on surety ...... 152 Residence interest expense ...... 402 Surety ...... 153 Quarterly reports, securitites...... 180 Remainder interest ...... 319 Quasi-contract ...... 98,114 Remedies ...... 113, 326 Quitclaim deed ...... 327 Breach, of real estate contract ...... 326 Contract...... 111, 113 UCC...... 273 R&E expenditures, corporate taxable income .....514 Upon default ...... 139 Race-notice recording statute ...... 327 Remitter...... 218 Race recording statute...... 328 Rent ...... 355, 387, 391 Racial discrimination ...... 193 Business act...... 391 Rates ...... 667 Deduction ...... 387 Ratification, agent act ...... 84 Income ...... 355 Reacquisition ...... 234 Rental value of parsonage ...... 367 Reaffirmation, bankruptcy ...... 147 Renunciation ...... 234 Real Reorganization Defenses ...... 229, 303 And adjustments...... 148 Security interests ...... 303 Plan of...... 148 Estate ...... 325, 326 Reporting Property...... 261, 317 Corporate liquidation ...... 586 Reasonable use theory ...... 321 Requirements, 1934 act...... 179 Reasonably foreseeable third parties...... 57 Required writing, statute of frauds ...... 99 Recapitalization ...... 589 Requirements contract...... 110 Reorganization ...... 589 Requisites of negotiability...... 218 Reconciliation...... 526 Reconciling book and taxable income ...... 526 Copyright © 2004 Gleim Publications, Inc. and/or Gleim Internet, Inc. 708 Index

Rescission ...... 114, 153, 277 Securities...... 175 Effect on surety ...... 153 Act of 1933 ...... 175 Of negotiation...... 221 And Exchange Commission ...... 175 Responsibilities Exchange Act of 1934 ...... 175 Ethics principle ...... 14 Exemptions ...... 182 Professional ...... 13 Markets ...... 176 To client...... 30 Registration ...... 176 Restatement of contracts ...... 94 Self- Restraint of trade, contracts ...... 102 Employed ...... 387 Restrictive endorsement ...... 222 FICA tax ...... 190 Retirement savings contribution ...... 388 Health insurance...... 387 Reversion ...... 319 Individuals contributions, deduction ...... 387 Reviewers and contributors ...... ii Persons...... 190 Revocability of assignments ...... 110 Tax...... 190, 387 Revocation...... 153, 610 Help repossession, security interests...... 304 Effect on surety ...... 153 Seller defenses...... 274 Of acceptance, defense ...... 273 Seller’s obligations ...... 270 Offer ...... 95 Semi-intangible collateral ...... 293 S corporation election ...... 610 Separately stated items ...... 634 Right ...... 303 Services ...... 354 Assignee’s ...... 110 Compensation ...... 354 Lessors ...... 323 Partnership ...... 632 Negotiable instruments ...... 226 Sex discrimination...... 193 Stock...... 583 Shareholder Surety ...... 151 Reorganizations ...... 588 Tenants ...... 324 Treatment ...... 581, 586 To demand assurances ...... 276 Shelf registration, securities ...... 178 Riparian rights ...... 321 Shelter principle ...... 226 Risk of loss ...... 268, 326 Sherman Act of 1890...... 186 Robinson-Patman Act of 1936 ...... 188 Shipment contract ...... 268, 270 Roth IRAs ...... 388 Short-term commercial paper ...... 183 Royalties, deduction ...... 387 Sight draft ...... 217 Rule SIMPLE, deduction ...... 388 101...... 14 Simple trust ...... 672 10b-5 ...... 60,181 Taxable income ...... 672 144...... 185 Sinking-fund income ...... 511 144A ...... 185 Skip person, GSII...... 679 504...... 184 Social Security 505...... 184 Benefits, income ...... 359 506...... 184 Tax...... 189 Rulings and interpretations...... 18 Solely for stock ...... 579 Shareholder property contribution ...... 579 Special Agents...... 76 Sale ...... 261 Damages ...... 113 By nonowners ...... 270 Endorsement...... 222 Or exchange ...... 480 Rules ...... 482 Satisfaction ...... 330 Surety defenses ...... 151 Mortgage ...... 330 Taxes ...... 616 Or release ...... 137 Warranty deed ...... 327 Scienter...... 104 Specific performance...... 114 S corporation ...... 509, 609 Specified perils contract...... 333 Election ...... 610 Split ...... 644 SEC...... 14,175 Partnership ...... 644 10b-5 ...... 181 Stock...... 584 1231 ...... 39 Standard deductions ...... 446 179 expense ...... 520 Additional standard deductions ...... 433 Discipline accountants ...... 39 Standards for tax services ...... 36 Sec. Start-up costs, deduction ...... 393 1231 ...... 487 State law ...... 175 1245 ...... 485 Statute of 1250 ...... 486 Frauds...... 99,264, 323 351 Exchange for Stock...... 486 Limitations ...... 59,112, 277, 447 Secondarily liable ...... 227 Statutory Second mortgage ...... 329 Liens ...... 135 Secured Provisions ...... 136 Creditors rights ...... 145 Violation ...... 101 Transactions ...... 291

Stock Taxable Distributions ...... 583 Distribution...... 679 Dividends...... 366 Termination ...... 679 Redemptions ...... 515, 584 Tax-exempt income...... 394 Rights ...... 583 Tenants Split ...... 584 Duties ...... 324 Stop-payment order ...... 237 Rights ...... 324 Strict Tender ...... 137, 234 Foreclosure ...... 331 Offers ...... 180 Liability ...... 267 Termination ...... 585, 610 Performance ...... 107 Act of parties ...... 76 Subagents ...... 82 Agency ...... 75 Subject matter ...... 95 Lien ...... 136 Subleases ...... 325 Operation of law ...... 76 Subrogation ...... 152, 335 Partnership ...... 644 Subsidiary liquidation...... 587 Redemptions ...... 585 Substantial S corporation ...... 610 Abuse, bankruptcy ...... 147 Statement ...... 295 Performance ...... 107 The exclusive-use test ...... 395 Substantially disproportionate...... 585 The Fair Labor Standards Act of 1938 ...... 194 Redemptions ...... 585 The HOPE scholarship credit ...... 438 Substitutes...... 98 The SEC and IRS may also discipline accountants . 39 Consideration ...... 98 Third parties...... 303 Performance ...... 273 Liability to ...... 56 Surety ...... 150 Rights, security interests ...... 303 Liability and defenses ...... 150 Third-party beneficiaries ...... 108 Suretyship contract ...... 151 Tie-in sales, antitrust ...... 187 Surrender of possession ...... 136 Time ...... 320, 326 Surviving spouse ...... 431 Extension, payment effect on surety ...... 152 Syndication fees, partnership ...... 633 Joint tenancy ...... 320 Title...... 320 Insurance...... 328 Joint tenancy ...... 320 Tax...... 392, 667 Search ...... 328 Administration, partnership...... 638 Tombstone ads, securities ...... 177 Attributes ...... 587 Tort liability ...... 79,324 Benefit item recovery, income exclusion...... 366 Trade ...... 387 Computations ...... 445 Acceptance draft...... 217 Assessment of deficiency Deductions...... 387 Collection...... 449 Transfer...... 221 Statute of limitations ...... 448 And assignment ...... 331 Estimated tax payments...... 445 Mortgage ...... 331 Filing requirements ...... 446, 447 Warranties ...... 228 Notice of deficiency ...... 448 Transportation expenses ...... 404 Standard deduction ...... 446 Travel ...... 391 Statute of limitations ...... 447 And meals ...... 514 Credits ...... 437 Corporate taxable income ...... 514 Adoption expenses ...... 437 Business expense...... 391 Child and dependent care credit ...... 437 Expenses...... 404 Credit for elderly or disabled...... 437 Treasure trove income...... 358 Disabled access credit...... 439 Treasury stock ...... 510 Foreign tax credit ...... 439 Trust ...... 669 General business credit ...... 439 Deed ...... 329 Nonrefundable personal credit ...... 437 Estates ...... 667 Residential mortgage interest credit...... 438 Funds ...... 358 Determination expenses ...... 404 Or estate ...... 667 Estate ...... 678 Trustee Formula estates and trusts ...... 669 Bankruptcy...... 140 Income, partners...... 633 Powers ...... 142 Paid or accrued, business expense ...... 392 Truth-in-Lending Act ...... 137 Preference items...... 444 Tuition Rates ...... 667 Costs, gift tax ...... 674 Return preparer liability ...... 61 Tying Self-employment...... 387 Antitrust...... 187 Year ...... 426, 510, 610 Or tie-in sales ...... 187 Partnership ...... 631, 633 Types of S corporation ...... 610 Discharges and contract remedies ...... 111 Reorganization ...... 589 Copyright © 2004 Gleim Publications, Inc. and/or Gleim Internet, Inc. 710 Index

UCC...... 215 Unauthorized signature ...... 227 Agent ...... 227 Unborn animals ...... 269 Uncertificated security ...... 296 Unconditional promise or order to pay ...... 219 Unconscionability ...... 103, 262 Contract...... 103 Underwriter, securities ...... 176 Undue influence ...... 105 Unemployment benefits, income ...... 358 Unenforceable contract ...... 97 Uniform Capitalization rules ...... 476 Commercial Code ...... 215 Unilateral contract ...... 95 Unit of production method ...... 524 Unmarried ...... 433 Unperfected security interests priority ...... 299 Use of home, business expense ...... 394 Usury laws ...... 102

Vacant land, business expense...... 393 Valid contract ...... 96 Validly ...... 96 Valuing the gross estate ...... 677 Vested...... 319 Vested interest ...... 319 Vicarious liability ...... 79 Agency ...... 79 Violation fiduciary duty, agent ...... 77 Vocational Rehabilitation Act ...... 194 Voidable preferences ...... 144 Voluntary bankruptcy...... 140 VRA...... 194

Wage and hour law ...... 194 Wages...... 189 Waiting period, securities ...... 177 Waiver...... 112, 136 War, agency termination ...... 77 Warranty ...... 265 Assignor’s ...... 110 Insurance...... 334 Of title and against infringement ...... 266 Welfare-to-work credit ...... 441 Withhold delivery of goods, defense ...... 274 Workers compensation ...... 191 Working papers ...... 64 Worthless securities, corporate taxable income....515 Wraparound mortgage...... 329