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Solution and Answer Guide NELLEN, YOUNG, CRIPE, LASSAR, PERSELLIN, CUCCIA, SWFT CORPORATIONS, PARTNERSHIPS, ESTATES & TRUSTS 2026, 9780357989074; CHAPTER 1: UNDERSTANDING AND WORKING WITH THE FEDERAL TAX LAW TABLE OF CONTENTS Discussion Questions........................................................................................................... 1 Problems ............................................................................................................................. 8 Research Problems........................................................................................................... 14 Check Figures.................................................................................................................... 16 Solution To Ethics & Equity Feature.................................................................................17 DISCUSSION QUESTIONS 1. (LO 1) When enacting tax legislation, Congress often is guided by the concept of revenue neutrality so that any changes neither increase nor decrease the net revenues raised under the prior rules. Revenue neutrality does not mean that any one taxpayer’s tax liability remains the same. Since this liability depends on the circumstances involved, one taxpayer’s increased tax liability could be another’s tax saving. Revenueneutral tax reform does not reduce deficits, but at least it does not aggravate the problem. 2. (LO 2) Economic, social, equity, and political factors play a significant role in the formulation of tax laws. Furthermore, the Treasury Department, the IRS, and the courts have had impacts on the evolution of tax laws. For example, control of the economy has been an important economic consideration in passing a number of laws (e.g., rapid depreciation, changes in tax rates). But ultimately the tax law is written by Congress. 3. (LO 2) The tax law encourages technological progress by allowing amortization deductions and ta
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