WHY STUDY TAXES?
Taxation is an important topic for business students. One must be conversant with this topic and be able to understand how taxes affect individuals and businesses. The ability of students to understand taxation as it impacts business decision-making is affected by their knowledge and understanding of several aspects of taxation, such as basic tax rules, terminology, policies underlying the tax law, how the tax law is created, the relationship between GAAP and tax rules, and the role of a tax adviser. Tax Aspects of Business Transactions: A First Course provides the knowledge of taxation that business students need to be successful as both students and graduates working in a business or government field.

PURPOSE AND APPROACH OF THIS TEXT
This textbook is based on a model tax curriculum created by a group of professionals within the American Institute of Certified Public Accountants (AICPA). The AICPA model changes the technical content of traditional undergraduate tax education and encourages the development of particular skills as part of a student's training in the tax area. For decades, the first undergraduate tax course covered tax fundamentals within the realm of the federal income tax rules applicable to individuals. While used for many years, this traditional approach was at odds with other business courses which focus on corporations and other business entities. The traditional approach was also at odds with what most business professionals need to know about taxes.

The AICPA model for the first tax course focuses on tax basics with an emphasis on all types of entities--not just individuals. Thus, taxation, as relevant to corporations, partnerships, limited liability companies, and sole proprietorships is covered. In addition, the model for the first tax course stresses the importance of exposure to a range of tax concepts within the framework of financial reporting. A tax course that focuses on all types of entities will better prepare students for many possible work environments, such as public accounting, industry, non-profit organizations, and government. For the second semester tax course, the AICPA model looks further at business entities using a life cycle approach, further emphasizes differences between tax and financial accounting theory, and discusses electronic applications in the tax area.

The AICPA model suggests that the subject matter be taught with an emphasis on the development of certain skills--communication, interpersonal, problem solving, use of technology, ethical considerations, and team building. As students study taxation, they will find that the subject matter is a natural for skill development in these areas, particularly critical thinking and problem solving.

A POSITIVE EXPERIENCE AHEAD
If the word "taxes" conjures up thoughts of completing tax forms, lots of complexity, and an uninteresting minutiae of rules to memorize, students will be in for a pleasant surprise as they study taxes using the approach followed in this textbook. In addition to the goal of following the AICPA model tax curriculum, this book was also written with the goal of making the subject matter understandable. While many of the rules, exceptions, and definitions in the tax law are complex, the introduction to taxation in this text focuses more on general concepts, underlying policies, how some tax rules compare to GAAP, basic compliance (filing) obligations, the role of a tax adviser, and current tax issues. This book is designed to serve as a tool for understanding how taxes are relevant to various types of business transactions, and thus, how taxes play a part in decisions that businesses make.

If this book is approached and used as it was intended--to explain tax concepts--a more permanent and useful knowledge base for this subject matter will be obtained. This conceptual approach, along with a focus on the relationship of taxation to financial accounting, will enable students to better understand taxes in the business decision-making process, rather than as just a discrete set of rules primarily relevant to the process of completing tax forms.

The conceptual approach of the text is important in appreciating how what may look like a lot of topics, can be covered in a one semester course. The reduced focus on detailed tax rules and added focus on concepts also makes it possible for the material to be presented in a very understandable manner.