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Partnerships, Estates & Trusts 32nd
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Optional and M andatory Basis Adjustments 10-24
Adjustments on Transfers 10-25
Adjustments on Distributions 10-27
Special Forms of Partnerships 10-28
Tax Shelters and Limited Partnerships 10-28
Publicly Traded Partnerships 10-28
Limited Liability Companies 10-29
Limited Liability Partnerships 10-30
Limited Liability Limited Parmership 10-31
Tax Planning Consi derations 10-31
Liquidating Distribution or Sale to Partners 10-31
Problem Materials 10-32
Discussion Questions 10-32
Issue Identification Questions 10-33
Proble,ns 10-33
Comprehensive Problems 10-43
Tax Strategy Problem 10-44
Case Study Problem 10-44
Tax Research Problems 10-45
CHAPTER 11
... SCORJ>ORATIONS 11-1
Sh ould an S Election Be M ade? 11 ·3
Advantages of S Corporation Treatment 11-3
Disadvantages of S Corporation Treatment 11-3
S Corporation Requirements 11·4
Shareholder-Related Require,nents 11-4
Corporation-Related Requirements 11-5
Electi on of S Corporat ion Status 11·7
Making the Election 11-8
Tennination of the Election 11-9
S Corporation Operations 11-13
Taxable Year 11-13
Accounting Method Elections 11-14
Ordinary Income or Loss and Separately Stated
Items 11-14
Spe.cial S Corporation Taxes 11-15
Taxation of the Shareholder 11 -19
Income Allocation Procedures 11-19
Income Pass-Though to Shareholders 11-20
Loss and Deduction Pass-Through to Shareholders 11-21
Fami ly S Corporations 11-25
Basis Adjustments 11-25
Basis Adjustments to S Corporation Stock 11-25
Basis Adjustments to Shareholder Debt 11-27
S Corporation Distributions 11-28
Corporations Having No Earnings and Profits 11-28
Corporations Having Accumu lated Earnings and
Profits 11-29
Other Rules 11 -33
Tax Preference Ite,ns and Other AMT Adjustments 11-34
Transactions Involving Shareholders and Other Related
Parties 11-34
Fringe Benefits Paid to a Shareholder-Employee 11-34
Tax Planning Consi derations 11-35
Election to Allocate Income Based on the S Corporation's
Accounting Methods 11-35
Increasing the Benefits from S Corporation Losses 11-36
Contents .,. Co r por ati on s vii
Salary Levels 11-37
Passive Income Requirements 11-37
Compl iance and Procedural Considerat ions 11-38
Making the Election 11-38
Filing the Corporate Tax Return 11-39
Estimated Tax Payments 11-39
Consistency Rules 11-40
Sample S Corporation Tax Return 11-40
Problem M aterials 11 -41
Discussion Questions 11-41
Issue Identification Questions 11-42
Problems 11-43
Comprehensive Problems 11-49
Tax Strategy Problems 11-51
Tax Form/Return Preparation Problems 11-51
Case Study Problem 11-54
Tax Research Problems 11-54
CHAPT ER 12
... THEGITTTAX 12-1
The Unified Transfer Tax System 12· 2
History and Purpose of Transfer Taxes 12-2
Unified Rate Schedule 12-3
Impact of Taxable Gifts on Death Tax Base 12-3
Unified Credit 12-3
Gift Tax Formula 12-4
Determination of Gifts 12-4
Exclusions and Deductions 12-4
Gift-Splitting Election 12-4
Cumulative Nature of Gift Tax 12-6
Unified Credit 12-6
Transfers Subject t o t he Gift Tax 12· 7
Transfers for Inadequate Consideration 12-7
Statutory Exemptions from the Gift Tax 12-8
Cessation of Donor's Dominion and Control 12-10
Va luation of Gifts 12-11
Gift Tax Consequences of Certain Transfers 12-13
Exclusions 12-1 6
Amount of the Exclusion 12-16
Present Interest Requirement 12-16
Gift Tax Deductions 12-18
Marita l Deduction 12-1 9
Charitable Contribution Deduction 12-21
The Gift-Splitting Electi on 12-22
Computation of the Gift Tax liability 12-23
Effect of Previous Taxable Gifts 12-23
Unified Credit Available 12-24
Comprehensive Illustration 12-25
Basis Considerations for a lifetime Giving Plan 12-26
Property Received by Gift 12-26
Property Received at Death 12-27
Below -M arket Loans: Gift and Income Tax
Consequences 12-28
General Ru les 12-28
De Mini,nis Rules 12-28
Tax Planning Considerat ions 12-29
Tax-Saving Features of Inter Vivos Gifts 12-29
Negative Aspects of Gifts 12-30
viii Co r por ation s ~ Con t e n ts
Compliance and Procedural Considerations 12·30
Fi ling Require1nenrs 12-30
Due Dare 12-31
Gift-Splitting Election 12-31
Liabil ity for Tax 12-31
Determination of Value 12-32
Statute of Limitations 12-32
Problem Materials 12·33
Discussion Questions 12-33
Issue Identification Questions 12-34
Proble1ns 12-34
Comprehensive Proble1n 12-37
Tax Strategy Problems 12-38
Tax Form/ Return Preparation Problems 12-38
Case Study Problems 12-39
Tax Research Problems 12-39
CHA PT ER 13
~ THE ESTATE TAX 13·1
Estat e Tax Formula 13·2
Gross Estate 13-2
Deductions 13-3
Adjusted Taxable Gifts and Tax Base 13-4
Tentative Tax on Estate Tax Base 13-4
Reduction for Posr-1976 Gift Taxes 13-4
Unified Credit 13-5
The Gross Estate: Val uat ion 13-6
Dare-of-Death Valuation 13-6
Alternate Valuation Dare 13-7
The Gross Estate: Inclusions 13·8
Comparison of Gross Estate with Probate
Estate 13-9
Property in Which the Decedent H ad an
Interest 13-9
Dower or Curresy Rights 13-10
Transferor Provisions 13-10
Annuities and Other Retirement Benefits 13-13
Jointly Owned Property 13-14
General Powers of Appointment 13-15
Life Insurance 13-16
Consideration Offset 13-17
Recipient Spouse's Interest in QTIP Trust 13-17
Deductions 13-18
Debts and Fu neral and Administration Expenses 13-18
Losses 13-19
Charitable Contr ibution Deduction 13-19
Marital Deduction 13-20
Computation of Tax Liability 13·23
Taxable Estate and Tax Base 13-23
Tentative Tax and Reduction for Posr-1976 Gift
Taxes 13-23
Unified Credit 13-23
Portabi lity Between Spouses of Exemption
Amount 13-24
O ther Credits 13-24
Comprehensive Illustration 13-25
Liquidity Concerns 13·28
Deferral of Payment of Estate Taxes 13-28
Srock Redemptions to Pay Death Taxes 13-29
Spe.cial Use Valuation of Farm Real Property 13-29
Generation-Skipping Transfer Tax 13-30
Tax Planning Considerat ions 13·31
Use of Inter Vivos Gifts 13-32
Use of Basic Exclusion Amount 13-32
What Size Marital Deduction Is Best? 13-33
Use of Discla i1ners 13-33
Role of Life Insurance 13-33
Q ualifying the Estate for Install ment
Payments 13-34
Where to Deduct Administration Expenses 13-34
Compl iance and Procedural Considerations 13·35
Filing Requ irements 13-35
Due Dare 13-35
Valuation 13-35
Election of Alternate Valuation Dare 13-35
Problem Mat erials 13-36
Discussion Questions 13-36
Issue Identification Q uestions 13-37
Problems 13-37
Comprehensive Problems 13-41
Tax Strategy Proble1ns 13-42
Tax Form/Return Preparation Problems 13-43
Case Study Problems 13-44
Tax Research Problems 13-4 5
C H APT E R 1 4
~ lNCOME T AXAT ION OF T RUSTS AND ESTATES 14· 1
Basic Concepts 14-2
Inception of Trusts 14-2
Inception of Estates 14-2
Reasons for Creating Trusts 14-3
Basic Principles of Fiduciary Taxation 14-3
Principles of Fiduciary Accounting 14-4
The Importance of Identifyi ng Income a nd
Principal 14-4
Principal and Income: T he Uniform Act 14-5
Categorization of Depreciation 14-6
Formula for Taxable Income and Tax Liability 14-7
Gross Income 14-7
Deductions for Expenses 14-7
Distribution Deduction 14-9
Personal Exemption 14-9
Credits 14-10
Distributable Net Income 14-10
Significa nce of DNI 14-11
Definition ofDNI 14-11
Manner of Computing DNI 14-11
Determining a Simple Trust's Taxable Income 14-13
Allocation of Expenses to Tax-Exempt
Income 14-14
Determination of DNI and the Distr ibution
Deduction 14-15
Tax Treatment for Beneficiary 14-15
Shortcut Approach to Provi ng Correctness of Taxable
Income 14-16
Effect of a Net Operati ng Loss 14-16
Effect of a Net Capital Loss 14-16
Comprehensive Illustration: Determining a Simple
Trust's Taxa ble Income 14-17
 Cont ent s ..,. Corpo rati ons ix

Determining Taxable Income for Complex Trusts and Due Dates for Payment of the Tax 15-11
Estates 14-19 Interest on Tax Not Ti,nely Paid 15-12
Determination of DNI a nd the Distribution Fa ilure-to-Fil e and Failure-to-Pay Pena lties 15-13
Deduction 14-20 Fai lure to File 15-15
Tax Treat ment for Beneficiary 14-21 Fai lure to Pay 15-16
Effect of a Net Operating Loss 14-24
Estimated Taxes 15-17
Effect of a Net Capital Loss 14-24
Payment Requ irements 15-17
Comprehensive Illustration: Determin ing a Complex
Trust's Taxable Income 14-24 Penalty for Underpaying Esti1nated Taxes 15-18
Exceptions to the Penalty 15-19
Income in Respect of a Decedent 14-27
Other More Severe Penalties 15-20
Defin ition and Common Examples 14-27
Negligence 15-20
Sign ificance of IRD 14-28
Substantial Understatement 15-21
Grantor Trust Provisions 14-30 Transactions ,vithout Economic Substance 15-22
Purpose and Effect 14-30 Civil Fraud 15-22
Revocable Trusts 14-31 Criminal Fraud 15-23
Post-1986 Reversionary Interest Trusts 14-31
Statute of Limitations 15-24
Retention of Administrative Powers 14-31
General Three-Year Rule 15-24
Retention of Economic Benefits 14-31
Six-Year Rule for Su bstantial Omissions 15-24
Control of O thers' Enjoyment 14-32
When No Return is Filed 15-26
Tax Planning Consi derations 14-33 Other Exceptions to Three-Year Rule 15-26
Ability to Sh ift Income 14-33 Refund Claims 15-27
Ti ming of Distributions 14-33
Liability for Tax 15-27
Property Distri butions 14-34
Joint Returns 15-27
Choice of Year-End for Estates 14-34
Transfore.e Liability 15-29
Deduction of Administration Expenses 14-34
Tax Practice Issues 15-29
Co mpliance and Procedura l Consideratio ns 14-35
Fi ling Require,nents 14-35 Statutory Provisions Concerning Tax Return
Preparers 15-29
Due Date for Return and Tax 14-35
Reportable Tra nsaction Disclosures 15-30
Documents to Be Furn ished to IRS 14-35
Ru les of Circular 230 15-31
Sample Simple and Complex Trust Returns 14-35
Statements on Standards for Tax Services 15-32
Prob lem Mate rials 14-36 Tax Accounti ng and Tax La,v 15-35
Discussion Q uestions 14-36 Accountant-Client Privilege 15-36
Issue Identification Questions 14-37
Problem Materials 15-37
Problems 14-37
Discussion Questions 15-37
Comprehensive Proble,n 14-40
Issue Identification Q uestions 15-38
Tax Strategy Problems 14-40
Problems 15-38
Tax Form/Return Preparation Problems 14-4 1
Comprehensive Problem 15-4 1
Case Study Problems 14-42
Tax Strategy Proble,n 15-41
Tax Research Problems 14-43
Case Study Problem 15-41
Tax Research Problems 15-41
CHAPT ER 15
... ADMINISTRATIVE PROCEDURES 15-1 C H APT ER 16
Ro le of t he Inter nal Revenue Service 15·2 ... U.S. TAXAT ION Of FOREIGN-RELATED
Enforcement and Collection 15-2 TRANSACTIONS 16-1
Interpretation of the Statute 15-2 The U.S. System of International Taxation 16·2
Aud its of Tax Re t ur ns 15-3 Participation Exemption System 16-3
Percentage of Returns Examined 15-3 Taxation of U.S. Citizens and Resident Aliens 16· 5
Selection of Returns for Audit 15-3 Foreign Tax Credit 16-5
Disclosure of Uncertain Tax Positions 15-5 Foreign-Earned Income Exclusion 16-10
Alternatives for a Taxpayer Whose Return Is Audited 15-5 Taxation of Nonresident Aliens 16-15
90-Day Letter 15-7 Definition of Nonresident Alien 16-15
Litigation 15-7 Investment Income 16-17
Requests for Rulings 15-9 Trade or Business Income 16-18
Information to Be Included in Taxpayer's Request 15-9 Taxation of U.S. Businesses Operating Ab road 16-19
Will the IRS Rule ? 15-10 Domestic Subsidiary Corporations 16-20
When Ru lings Are Desirable 15-10 Foreign Branches 16-20
Due Oates 15-10 Foreign Corporations 16-21
Due Dates for Returns 15-10 Potential Deferral of Tax on Foreign Earn ings 16-21
Extensions 15-11 Controlled Foreign Corporations 16-24
x Co r por ati on s ~ Contents

Deemed Paid Foreign Tax Credit 16-30 ~ APPENDfXC

Transfer Pricing 16-33
MACRS Tables C-1
Inversions 16-35
Tax Planning Considerations 16-36 ~ APPENDfXO
Deduction Versus Credit for Foreign Taxes 16-36
Glossary D· 1
Election to Accrue Foreign Taxes 16-37
Special Earned Income Elections 16-38 ~ APPENDfX E
Tax Treaties 16-38
Spe.cial Resident Alien Elections 16-39 AJCPA Statements on Standards for Tax
Services Nos. 1- 7 E-1
Compliance and Procedural Considerations 16-40
Foreign Operations of U.S. Corporations 16-40 ~ APPENDfX f
Reporting the Foreign Tax Credit 16-40
Reporting the Earned Income Exclusion 16-40 Comparison of Tax Attributes for C Corporations,
Fi ling Requirements for Aliens and Foreign Partnerships, and S Corporations F-1
Corporations 16-41
~ APPENDfXG
Financial Statement Implications 16-41
Foreign Tax Credit 16-41 Reserved G· 1
Problem Materials 16-43 ~APPENDfXH
Discussion Questions 16-43
Issue Identification Questions 16-45 Actuarial Tables H-1
Problems 16-45
~ APPENDfX I
Comprehensive Problem 16-49
Tax Strategy Problem 16-50 Index of Code Sections I· 1
Tax Form/Return Preparation Problems 16-50
Case Study Problems 16-51 ~ APPENDfXJ
Tax Research Problems 16-52 Index of Treasury Regulations J· 1

~ APPENDfX K

AP PE N DI C E S Index of Government Promulgations K-1

~ APPENOfXA ~ APPENDfX L

Tax Research Working Paper File A-1 Index of Court Cases L· 1

~ APPENOfXB ~APPENDfXM

Tax Forms B·1 Subject Index M -1

ABOUT THE EDITORS
Kenneth E. Anderson is the Pugh CPAs Professor of Accounting at the University of Ten-
nessee. He earned a B.B.A. from the University of W isconsi n-Milwaukee and subsequent-
ly attai ned the level of tax manager with Arthur Young (nov, part of Ernst & Young). He
then earned a Ph.D. from Indiana Universiry. He teaches corporate taxation, partnership
taxation, and tax strategy. Professor Anderson also is the Director of the Master of Ac-
countancy Program. He has published articles in The Accounting Review, The Journal of
the American Taxation Association, Advances in Taxation, the Journal of Accountancy,
the Journal of Financial Service Professionals, and a number of other journa ls.

KEN NETH E. A NDERSON

Trmothy J. Rupert is a Professor at the D' Amore-McKim School of Business at Northeast-

ern Universiry. He received his B.S. in Acco unting and his Master of Taxation from the
Universiry of Akron. He also earned his Ph.D. from Penn State Un iversity. Professor Ru-
pert's research has been published in such journa ls as The Accounting Review, The Journal
of the American Taxation Association, Behavioral Research in Accounting, Advances in
Taxation, Applied Cognitive Psychology, Advances in Accounting Education, and Journal
of Accounting Education. In 2010, he received the O utstand ing Educator Award from the
Massach usetts Society of CPAs. He also has received the Universiry's Excellence in Teach-
ing Award and the D'Amore-McKim School's Best Teacher of the Year a\vard multiple
times. He is active in the American Accounting Association and the American Taxation
TIMOTHY J. RUPE RT
Association (ATA) and has served as president, vice president, and secretary of the ATA.

xi
ABOUT THE AUTHORS
Anna C. Fo,vler is the John Arch White Professor Emeritus in the Department of Ac-
counting at the University of Texas at Austin. She received her B.S. in accou nting from the
University of Alabama and her M.B.A. and Ph.D. from the Un iversity of Texas at Austin.
Active in the American Taxation Association throughout her academic career, she served
on the edi torial board of its journal and held many positions, includi ng president. She is a
former member of the American Insti tute of CPA's Tax Executive Committee and a former
chair of the AICPA's Regulation/Tax Subcommittee for the CPA exam. She has published a
number of articles, most of which have dealt with estate plann ing or real estate transaction
issues. In 1999, she received the O utsta ndi ng Accounti ng Ed ucator Award of the Texas
Society of CPAs and in 2002 the Ray M. Sommerfeld O utstandi ng Educator Award, co-
sponsored by the American Taxation Association and Ernst & Young.

Richard J. Joseph is the President and Chief Executive Officer of Babson Global, Inc., a
\Vholly o,vned education subsidiary of Babson College. At Babson Global, he is respon-
sible for financial and operational managemen t, client relationships, and executive deci -
sion maki ng. Dr. Joseph is former Provost-for-Term and Chief Academic Officer of Bryant
University, Rhode Island. In this role, he oversa\v Brya nt's faculty affairs, academic pro-
grams, College of Arts and Sciences, College of Business, and School of Health Sciences.
Before joining Bryant, he \Vas Provost and Global Dean of Hult International Business
School. There, he played a major role in establishing H ult academic centers in Shanghai,
Dubai, London, and San Francisco. Before his term at H ult, he served 13 years on the Tax
Faculty and Admin istration of The University of Texas at Austin. Prior to embarking on
his academ ic career, Dr. Joseph \VOrked as an international banker at Citibank, Riyadh; an
investment banker at Lehman Brothers, Ne\v York; a securities trader at Becker Paribas,
Dallas, and Bear Stearns, New York; and a mergers and acquisitions lawyer for the Bass
Group, Fort Worth. A graduate magna cum /aude of Harvard College, O xford University,
and The University of Texas at Austin School of La\v, he is co-editor of the Handbook
of Mergers and Acquisitions (Oxford University Press) and author of The Origins of the
American Income Tax (Syracuse University Press). He has written numerous commen-
taries in the Financial Times, The Christian Science Monitor, Tax Notes, and Tax Notes
International.

David S. Hulse is an Associate Professor of Accountancy at the Un iversity of Kentucl..."Y,

\Vhere he teaches introductory and corpora te taxation courses. He received an undergrad-
uate degree from Shippensburg University, an M .S. from Louisia na State Un iversity, and a
Ph.D. from the Pen nsylva nia State Un iversity. Professor H ulse has published a number of
ar ticles on tax issues in academic and professional journals, including The Journal of the
American Taxation Association, Advances in Taxation, the Journal of Financial Service
Professionals, the Journal of Financial Planning, and Tax Notes.

LeAnn Luna is a Professor of Accounting at the University of Tennessee. She is a CPA and
holds an undergraduate degree from Southern Methodist University, an M.T. from the
University of Denver College of La"v, and a Ph.D. from the University of Tennessee. She
has ta ught introductory taxation, corporate and par tnership taxation, and tax research.
Professor Luna also holds a joint appointment ,vith the Center for Busi ness and Economic
Research at the University of Tennessee, \Vhere she interacts frequently ,vith state policy-
makers on a var iety of policy-related issues. She has published ar ticles in the Journal of
Accounting and Econornics, National Tax Journal, The Journal of the American Taxation
Association, and State Tax Notes.

xii
 About the Authors ~ Corporations xiii

William]. Moser is an Assistant Professor in the Department of Accountancy at the Farmer

School of Business at M iami University. He received his B.S. in Accountancy from Miami
University in 1995, his Masters in Accountancy ,vith an emphasis in taxation from North-
ern Illinois University in 1997, and his Ph.D. from the University of Arizona in 2005. He
has co-authored articles in the Journal of Accounting Research, the Journal of Financial
and Quantitative Analysis, Review of Accounting Studies, The Journal of the American
Taxation Association, and the Journal of Business, Finance and Accounting. Professor
Moser has received numerous teaching a,vards including the Provost's Outstanding Junior
Faculty Teaching A,vard at University of Missouri in 2010 and the Grant Thornton Teach-
ing Excellence Award in 2009.

Michael S. Schadewald, Ph.D., CPA, is a Clinical Associate Professor in the Fisher School
of Accounting at the University of Florida, where he teaches courses in accounting and
taxation. A graduate of the University of Minnesota, Professor Schade,vald has published
more than 50 articles in academ ic and professional journals, including The Accounting
Review, Journal of Accounting Research, and Contemporary Accounting Research. He
also has served on numerous editorial boards, including The Journal of the American
Taxation Association, International Tax Journal, Journal of State Taxation, and Issues in
Accounting Education. Prior to joining the faculty at the University of Florida, Professor
Schade,vald taught at the University of Wisconsin-Mi lwaukee, ,vhere he also served as the
Director of the Deloitte Center for Multistate Taxation, and the University of Texas in
Austin. Prior to entering academics, he ,vorked in the Mi lwaukee office of Arthur Young
(no,v EY).
PREFACE
New to this Edition

INDIVIDUALS
• Complere updaring of the chapter marerial for rhe provisions in the Tax Curs and Jobs Acr of 2017 affecting individual taxpayers,
including an explanation of the new rules and the relared implications of rhe following irems:
• Reduction in marginal tax rares
• Elimi nation of personal and dependency exe,nprions
• Changes in the deducrabi liry of state and local taxes and casualty losses
• Elimi nation of miscellaneous itemized deductions
• Changes ro the a lrernative min i,num tax
• Increase in rhe ch ild rax credit
• Complete updating of sign ificant courr cases and IRS rul ings and procedures duri ng 2017 and early 2018
• All tax rare schedu les have been updated to reflect the rates and inflarion adjusrments for 2018
• Whenever new updates become available, they wi ll be accessi ble via MyLab Accou nting
• Updaring of the end-of-chaprer rax rerurn problems to 2017 (2017 tax forms are included because the 2018 rax forms were nor avail-
able ,vhen th is edition wenr to prinr), bur also including a supplemental expla nation for each rax return problem of how the solurion
,viii change for the 2018 tax year given rhe provisions of rhe Tax Curs and Jobs Act.

CORPORATIONS
• Complete updating of the chapter material for the provisions in rhe Tax Curs and Jobs Acr of 2017 affe.cring corporarions and other
enriries, including an explanarion of the new ru les and the relared i,nplications of the following items:
• Reduced corporate tax rate
• Qualified business income deduction
• New li,nitarions on interest, business losses, and NOLs
• New ru les for rhe raxation of international transactions
• The comprehensive corporate tax return, Problem C:3-65, has all new numbers for rhe 2017 forms
• The comprehensive parrnersh ip tax return, Problem C:9-58, has all new numbers for the 2017 forms
• The comprehensive S corporarion rax return, Problem C:1 1-62, has all new numbers for rhe 2017 forms
• All tax rare schedu les have been updated to reflect the rates and inflarion adjusrments for 2018
• Whenever new updates become available, rhey ,viii be accessible via MyLab Accou nting

SOLVING TEACHING AND LEARNING CHALLENGES

The Ruperr/Anderson 2019 Series in Federa l Taxarion is appropriare for use in any firsr course in federal taxarion, and comes in a
choice of three vol umes:
• Federal Taxarion 2019: Individuals
• Federal Taxarion 2019: Corporations, Parrnerships, Esrates & Trusrs (the compan ion book to Individuals)
• Federal Taxarion 2019: Comprehensive (1 4 chapters from Individuals and 15 chapters from Corporarions)
• • For a customized edirion of any of rhe chaprers for these texrs, contact your Pearson represenrarive and he or she can create a custom
rexr for you.
• The Individuals volume covers all entities, although the rrearment is often briefer rhan in the Corporations and Con,prehensive vol-
umes. The Individuals volume, therefore, is appropriate for colleges and universities that require on ly one semester of taxation as ,veil
as those that require more t han one semester of taxation. Furt her, this volmne adapts the suggestions of the Model Tax Curriculmn as
promu lgated by the A,nerican Insrirure of Certified Public Accou nranrs.
• The Corporations, Partnerships, Estates & Trusts and Con,prehensive volumes contain three comprehensive tax rerurn problems
,vhose data change wit h each edition, rhereby keeping the problems fresh . Problem C:3-65 conrains the comprehensive corporare
tax rerurn, Problem C:9-58 conrains the comprehensive partnership rax rerurn, and Problem C: 11-62 conta ins the comprehensive
S corporarion rax rerurn, ,vhich is based on the same facts as Problem C:9-58 so that studenrs can compare the returns for these
nvo entities.
• The Corporations, Partnerships, Estates & Trusts and Co,nprehensive volu mes conrain sections called Financial Sratemenr Implica-
tions, wh ich discuss the implications of Accou nting Standards Codificarion (ASC) 740. The main discussion of accou nting for income
taxes appears in Chaprer C:3. The financial sratemenr i,nplicarions of other tra nsactions appear in Chaprers C:7, C:8, and C:16
(Corporations volume only).
xiv
 Preface ..,. Corporation s xv

Rupert/Anderson 2019 Series in Federal Taxation has an appropriate blend of technica l content of the tax law with a high level of
readability for students. It is focused on enabling students to apply tax pri nciples within the chapter to real-life situations using many
strong pedagogical aids:
Real-World Example
These co,nments relate the text material to events, cases, and statistics occurring in the tax and business environment. T he statistical
data presented in some of these comments are taken from the IRS's Statistics of Income at W\V\V.irs.gov.
Book-to-Tax Accounting Comparison
These comments compare the tax discussion in the text to the accounting a nd/or financial state1nent treatment of this material. Also,
the last section of Chapter C:3 discusses the financial statement implications of federal income taxes.
What Would You Do in This Situation?
Unique to the Rupert/Anderson series, these boxes place students in a decision-making role. The boxes include many controversies
that are as yet unresolved or are currently bei ng considered by the courts. These boxes make extensive use of Ethical Material as they
represent choices that may put the practitioner at odds with the cl ient.
Stop & Think
These «speed bu1nps" encourage students to pause and apply what they have just learned. Solutions for each issue are provided in the box.
Ethical Point
These comments provide the ethical i1npl ications of material discussed in the adjoining text. Apply what they have just learned.
Tax Strategy Tip
These comments suggest tax planning ideas related to material in the adjoining text.
Additional Comment
These comments provide supplemental information pertaining to the adj acent text.

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Study Plan The Study Plan acts as a tutor, providing personalized reco,nmendations for each of your students based on his or her
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xv i Corporations ~ Preface

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Instructor Teaching Resources

T his progra m comes ,virh the fo llowing reaching resources.
Supplements available to instructors a t
www.i;igarsonhighered.com/gearsontax
Instructor's Resource Manual
authored by Mitchell Franklin from LeMoyne College and
Joshua Coyne from University o f Memphis
Instructor's Solutions Manual
authored by Kenneth Anderson from University of
Tennessee and Timothy Rupert from Northeastern
University
Test Bank
authored by Anthony Masino from East Tennessee State • Type (Multiple-choice, true/false, short-answer, essay)
University and Ann Burstein Cohen from SUNY at Buffalo • Page references to where content is found in the text
Computerized TestGen
PowerPoint Presentations
authored by Allison Mcl eod from University of North
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Mu lt istate Tax Chapter
authored by Michael Schadewald from University of
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TaxAct 2017 Professional Software
Feat u res of the Supp lement
• Sample syllabi
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• Solutions to the tax form/tax return preparation problems
• Solutions to discussion questions
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Over 1,500 multiple-choice, true/false, short-answer, essays, and worked problems.
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An entire chapter, complete with problems (and solutions) dedicated to multi-
state tax practices.
Available online with Individuals, Corporations, and Comprehensive Texts-please
contact your Pearson representative for assistance with the registration process.
This user-friendly tax preparation program includes more than 80 tax forms,
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Acknowledgments
O ur pol icy is to provid e annua l editions a nd to prepare ti mely updated s upple ments ,vhen major tax revisions occur. We a re most ap-
preciative of th e suggestions made by outside reviewers beca use t hese extensive review proced ures have been va lua ble to t he a uthors
a nd editors d uring the revision process.
We also a re gratefu l to the various graduate assistants, doctoral stud ents, a nd colleagues who have reviewed the text a nd supple-
mentary ma te rials a nd checked solutions to maintain a h igh level of technical accuracy. In particu lar, we ,vould like to acknowledge
the following colleagues who assisted in th e p repa ratio n of s upple1nenral materials for t his text : Ann Bu rstein Cohen, SUNY a t Buf-
fa lo; Joshua G. Coyne, University o f Me1np his; Kare De1naresr, Carroll Com1nunity College; Allison McLeod , University of North
Texas; Mitchell Franklin, LeMoyne College; a nd A ntho ny Masino, East Tennessee State University.
In a d dition, ,ve want to thank Myro n S. Scho les, Mark A. Wolfson, Merle M. Erickson, M . L. H an lon, Edward L. Maydew, a nd
Terry J . Shevlin fo r allowing us to use t he model d iscussed in their text , Taxes and Business Strategy: A Planning Approach, as the
basis for material in Chapter 1:18.
Please send a ny comments to Kenneth E. Anderson or Timo thy J. Rupert.
TAX RESEARCH
LEARNING OBJECTIVES
After studying this chapter, you should be able to
1 Distinguish between closed fact and open fact tax situations
2 Describe the steps in the tax research process
3 Explain how the facts influence tax consequences
4 Identify the sources of tax law and assess the authoritative value of each
s Consult tax services to research an issue
6 Apply the basics of Internet-based tax research
7 Use a citator to assess tax authorities
s Describe the professional guidelines that CPAs in tax practice should
follow
9 Prepare work papers and communicate to clients
1 -2 Corporati ons .,.. Chapter 1
C H APTER OUTLINE
Overview of Tax Research ... 1-2
Steps in the Tax Research
Process ...1-3
Importance of t he Facts to the Tax
Consequences ... 1-5
The Sources of Tax Law... 1-7
Tax Services ... 1-25
The Internet as a Research
Tool ... 1-26
Citators... 1-28
Professional Guidelines for Tax
Services... 1-30
Sample Work Papers and Client
Letter...1-34
'
OBJECTIVE 1 Tax research is the process of solving tax-related problems by applying tax law to specific
Distinguish between
closed fact and open fact
tax situations
ADDITIONAL COMMENT
Closed-fact situations afford the
tax advisor the least amount
of f lexibility. Because the facts
are already establ ished, the tax
advisor must develop the best
solution possible w ithin certain
predetermined constraints.
EXAM PLE C :1 - 1 ....
ADDITIONAL COMM ENT
Open-fact or tax-planning situa-
t ions give a tax advisor flexibility
to structure transactions to accom-
plish t he client's objectives. In this
type of situation, a creative tax
advisor can save taxpayers dollars
t hrough effective tax planning.
EXAM PLE C :1 -2 ....
This chapter introduces the reader co the tax research process. Its major focus is the sources
of the tax law (i.e., the Internal Revenue Code and other tax authorities) and the relative
\Veight given to each source. The chapter describes the steps in the tax research process
and places particular emphasis on the importance of the facts to the tax consequences. It
also describes the features of frequently used tax services and computer-based tax research
resources. Finally, it explains ho,v co use a citator.
The end product of the tax research process-the communication of results to the
client-also is discussed. This text uses a hypothetical set of facts to provide a compre-
hensive illustration of the process. Sample ,vork papers demonstrating how to document
the results of research are included in Appendix A. The text also discusses t\VO types
of professional gu idelines for CPAs in tax practice: the American Institute of Certified
Public Accountants' (AICPA's) Statements on Standards for Tax Services (reproduced in
Appendix E) and Treasury Department Circular 230.
OVERVIEW OF TAX RESEARCH
sets of facts . Sometimes it involves researching several issues and often is conducted to
formulate tax policy. For example, policy-oriented research wou ld determ ine ho,v far
the level of charitable contributions might decline if such contributions \Vere no longer
deductible. Economists usually conduct this type of tax research to assess the effects of
government policy.
Tax research also is conducted to determine the tax consequences of transactions
co specific taxpayers. For example, client-oriented research ,vould determine \Vhether
Smith Corporation could deduct a particular expenditure as a trade or business expense.
Accounting and la\v firms generally engage in this type of research on behalf of their
clients.
This chapter deals only ,vith client-oriented tax research, wh ich occurs in two contexts:
1. Closed fact or tax compliance situations: The client contacts the tax advisor after
completing a transaction or \Vhi le preparing a tax return. In such situations, the tax
consequences are fa irly straighcfonvard because the facts cannot be modified co obtain
different results. Consequently, tax saving opportunities may be lose.
Tom informs Carol, his tax advisor, t hat on November 4 of the current year, he sold land held
as an investment for $500,000 cash. His basis in the land was $50,000. On November 9, Tom
reinvested the sales proceeds in another plot of investment property costing $500,000. This is a
closed fact situation. Tom wants to know the amount and t he character of the gain (if any} he
must recognize. Because Tom solicits the tax advisor's advice after the sale and reinvestment,
the opportunity for tax planning is limited. For example, the possibility of deferring taxes by
using a like-kind exchange or an installment sa le is lost. ....
2. Open fact or tax planning situations: Before structuring or concluding a transaction,
the client contacts the tax advisor co discuss tax planning opportunities. Tax-planning
situations generally are more difficult and challenging because the tax advisor must
consider the client's tax and nontax objectives. Most clients will not engage in a trans-
action if it is inconsistent ,vith their nontax objectives, even though it produces tax
savings.
Diane is a widow with three children and f ive grandchildren and at present owns property
va lued at $30 million. She seeks advice from Carol, her tax advisor, about how to minimize
her estate taxes and convey t he greatest value of property to her descend ants. This is an
open-fact situation. Carol could advise Diane to leave all but $11.18 million of her property
to a charitable organ ization so that her estate would owe no estate taxes. Although this
recommendation would eliminate Diane's estate taxes, Diane is likely to reject it because she
wants her children or grandchildren to be her primary beneficiaries. Thus, reducing estate

TAX STRATEGY TIP
Taxpayers should make invest-
ment decisions based on after-tax
rates of return or after-tax cash
f lows.
ADDITIONAL COMMENT
It is important to consider nontax
as well as tax objectives. In many
situat ions, the nontax consider-
ations outweigh the tax consider-
ations. Thus, the plan eventually
adopted by a taxpayer may not
always be the best when viewed
strictly from a tax perspective.
OBJECTIVE 2 In both open· and closed-fact situations, the tax research process involves six basic steps:
Describe the steps in the
tax research process
1
For an excellent discussion of explicit and implicit taxes and rax planning
see /vi. S. Scholes, /vi. A. \Volfson, M. Erickson, /vi. Hanlon, L. Maydew, and
T. Shevlin, Taxes and Business Strategy: A Planning Approach, fifth edition
(Upper Saddle River, NJ: Pearson Prentice Hall, 2015). Also see Chapter I: 18
Tax Research ~ Corporations 1 -3
taxes t o zero is inconsistent with her objective of allow ing her d escend ants to receive as
much after-t ax wealt h as possible. ....
W hen conducting research in a tax plan ning con text, the tax professional should keep
a number of points in mind. First, the objective is not to minimize taxes per se but rather
to maximize a taxpayer's after-tax return. For example, if the federa l income tax rate is a
constant 30o/o, an investor should not buy a tax-exempt bond yielding 5% when he or she
could buy a corporate bond of equal risk that yields 9% before tax and 6.3",{, after tax.
This is the case even though his or her explicit taxes (actual tax liability) would be mini·
mized by investing in the tax-exempt bond. 1 Second, taxpayers typically do not engage
in unilatera l or self-dealing transactions; thus, the tax ramifications for all parties to the
transaction should be considered. For example, in the executive compensation context,
employees may prefer to receive incentive stock options (because they will not recognize
income until they sell the stock), but the employer may prefer to gran t a differen t type of
option (because the employer cannot deduct the va lue of incentive stock options upon is-
suance). Thus, the employer migh t grant a different number of options if it uses one type
of stock option versus another type as compensation. Third, taxes are but one cost of
doing business. In deciding where to loca te a manufacturing pla nt, for example, factors
more importan t to some businesses tha n the amount of state and local taxes paid migh t
be the proximity to ra\V materials, good transportation systems, the cost of labor, the
quantity of available skilled labor, and the qual ity of life in the area. Fourth, the time for
tax plann ing is not restricted to the beginn ing da te of an investmen t, contract, or other ar·
ra ngement. Instead, the time extends throughout the duration of the activity. As tax rules
cha nge or as business and economic environments change, the tax advisor must reevaluate
\Vhether the taxpayer should hold onto an investment and must consider the transaction
costs of any alternatives.
One final note: the tax advisor should ahvays bear in mind the financial accounting
implications of proposed tra nsactions. An ans\ver that may be desirable from a tax per·
spective may not ahvays be desirable from a financial accounting perspective. Tho ugh in·
terrelated, the two fields of accounting have different orien tations and different objectives.
Tax accounting is oriented primarily to the Internal Revenue Service (IRS). Its objectives
include calculating, reporting, and predicting one's tax liability according to legal pri n·
ciples. Fi nancial accounti ng is oriented primarily to shareholders, creditors, managers, and
employees. Its objectives include determining, reporting, and predicting a business's finan·
cial position and operating results accordi ng to Generally Accepted Accounting Principles.
Because tax and financial accounting objectives may differ, planning conflicts could arise.
For example, management might be reluctan t to engage in tax red uction strategies that also
reduce book income and reported earnings per share. Success in any tax practice, especially
at the managerial level, requires consideration of both sets of objectives and orientations.
STEPS IN THE TAX
RESEARCH PROCESS
1. Determine the facts.
2. Identify the issues (questions).
3. Locate the applicable authorities.
4. Eval uate the authorities and choose those to follow \Vhere the authorities conflict.
5. Ana lyze the facts in terms of the applicable authorities.
6. Communicate concl usions and recommendations to the client.
of rhe Individuals volume. An example of an implicit tax is the excess of the
before-tax eam.ings on a taxable bond over the risk-adjusted before-tax earn·
ings on a tax-favored investment (e.g., a munfripal bond).
1 - 4 Corporation s .,.. Chapter 1
FIG URE C: 1 - 1 ..... STEPS IN THE TAX RESEARC H PROCESS
ADDITIONAL COMM ENT
The steps of tax research provi de
an excellent format for a written
tax communication. For example,
a good format for a client memo
includes (1) statement of facts,
(2) list of issues, (3) discussion of
relevant authority, (4) analysis,
and (5) recommendations to the
client of appropriate actions
based on the research results.
TYPI CAL MISCON CEPTION
Ma ny taxpayers t hink the tax law
is all black and white. However,
most tax research deals w it h gray
areas. Ultimately, when con-
fronted w ith tough issues, the abil-
ity to develop strategies that favor
the taxpayer and then to find rel-
evant authority to support those
strategies will make a successful
tax advisor. Thus, recognizing
planning opportunities and avoid-
ing potential t raps is often the real
value added by a tax advisor.
2 Often, in an employment context, super...isors define the questions to
researched and the authorities that might be relevant to the rax consequences.
You may need to
I
Determine the facts. gather additional
I
facts.
You may need to
Identify the issues
restate the
(questions).
questions.
locate the applicable
authorities.
Evaluate the authorities;
choose those to follow where
the authorities conflict
Analyze the facts in
terms of the applicable
authorities.
Communicate conclusions and
recommendations to the client.
Although the above outline suggests a linear approach, the tax research process often is
circular. That is, it does not always proceed step-by-step. Figure C:1-1 illustrates a more
accurate process, and Appendix A provides a comprehensive example of this process.
In a closed-fact situation, the faces have already occurred, and the tax advisor's task
is co analyze chem co determine the appropriate tax treatment. In an open-fact situation,
by contrast, the facts ha ve not yet occurred, and the tax advisor's task is co plan for them
or shape them so as to prod uce a favorable tax result. T he tax advisor performs the latter
cask by revie\ving the relevant legal authorities, particularly court cases and IRS rulings,
all the \Vhile bearing in mind the facts of those cases or ru lings that produced favorable
results compared with those that produced unfavorable results. For example, if a clien t
\Vanes co rea lize an ordinary loss (as opposed to a capital loss) on the sale of several plots
of land, the tax advisor might consult cases involving simi lar land sales. The advisor
might attempt to distinguish the faces of those cases in \Vhich the taxpayer rea lized an or-
dinary loss from the facts of chose cases in \Vh ich the taxpayer realized a capital loss. The
advisor then might recommend that the client structure the transaction based on the fact
pattern in the ordinary loss cases.
Often, tax research involves a question co \Vhich no clearcut, unequivocall y correct an-
swer exists. In such situations, probing a related issue might lead to a sol ution pertinent to
the central question. For example, in researching whether the taxpayer may ded uct a loss
as ordinary instead of capital, the tax advisor might resea rch the related issue of \Vhether
the presence of an investment motive precl udes classifying a loss as ordinary. The solution
co chat issue might be relevant co the central question of \Vhether the taxpayer may deduct
the loss as ordinary.
Iden tifying the issue(s) to be researched often is the most difficult seep in the tax re-
search process. In some instances, the clien t defines the issue(s) for the tax advisor, such as
\Vhere the client asks, "May I deduct the coses of a winter trip co Florida recommended by
my physician?" In other instances, the tax advisor, after reviewing the documents subm it-
ted to him or her by the clien t, identifies and defines the issue(s) himself or herself. Doing
so presupposes a firm grounding in tax la\v. 2
be
 Tax Research ~ Corporations 1 -5

Once the tax advisor locates the applicable legal authorities, he or she might have to
obtain additiona l information from the client. Example C:1-3 ill ustrates the point. T he
example assumes that all relevant tax authorities are in agreement.

EXAM PLE C:1-3 .... Mark calls his tax advisor, A l, and states t hat he (1) incurred a loss on renting his beach cottage
during the current year and (2) wonders whether he may deduct the loss. He also states that
he, his w ife, and their minor child occupied the cottage only eight days during the current year.
This is the first time Al has dealt with t he Sec. 280A vacation home rules. On read ing Sec.
280A(d), Al learns that a loss is not deductible if the taxpayer used the residence for personal
purposes for longer than the greater of (1) 14 days or (2) 10% of the number of days the unit
was rented at a fair renta l value. He also learns that the property is deemed to be used by the
taxpayer for personal purposes on any days on which it is used by any member of his or her
family (as defined in Sec. 267(c)(4}}. The Sec. 267(c)(4} definition of fam ily members includes
brot hers, sisters, spouse, ancestors (e.g., parents and grandparents), or lineal descendants (e.g.,
children and g randchildren}.
Mark 's eight-day use is not long enough to make the renta l loss nondeductible. However,
Al must inquire about the number of days, if any, Mark's brothers, sisters, or parents used the
property. (He already knows about use by Mark, his spouse, and his lineal descendants.} In ad·
dition, Al must find out how many days the cottage was rented to other persons at a fair rental
value. Upon obtaining the additiona l inf ormation, A l proceeds to determine how to calculat e
the deductible expenses. Al then derives his conclusion concern ing the deductible loss, if any,
and communicates it to Mark. (This example assumes the passive activity and at-risk rules re-
stricting a taxpayer's ability to deduct losses from real estate activities will not pose a problem
for Mark. See Chapter 1:8 for a comprehensive discussion of these topics.} ....

Many firms require that a researcher's conclusions be communicated to the client in

\Vriting. Members or employees of such firms may answer questions orally, but their oral
concl usions should be follo\ved by a written communication. According to the AICPA's
Statements on Standards for Tax Services (reproduced in Appendix E),

Although oral advice may serve a taxpayer's needs appropriately in routine matters or in
,veil-defined areas, written communications are recommended in i1nportant, unusual, sub-
stantial dollar value, or complicated transactions. The member may use professional judg-
ment about whether, subsequently, to document ora l advice. 3

In addition, Treasury Department Circular 230 covers all ,vritten advice communi·
cated to clients. These requirements are more fu lly discussed at the end of th is chapter and
in Chapter C:15.

IMPORTANC E OF THE FAC TS

TO THE TAX C ONS EQU ENC ES
OBJECTIVE 3 Many terms and phrases used in the Internal Revenue Code (IRC) and other tax authori·
Explain how the ties are vague or ambiguous. Some provisions conflict vvith others or are difficult to rec-
facts influence tax oncile, creating for the researcher the dilemma of deciding v1hich rules are applicable and
consequences \Vhich tax results are proper. For example, as a condition to claiming another person as a
dependent, the taxpayer must provide a certain level of support for such person. 4 Neither
the IRC nor the Treasury Regulations define "support." This lack of definition could be
problematic. For example, if the taxpayer purchased a used automobile costing $8,000
for an elderly parent \Vhose only source of income is $7,800 in Social Security benefits,
the question of \Vhether the expenditure constitutes support ,vould arise. The tax advisor
\VOuld have to consult court opinions, revenue rulings, and other IRS pronouncements to
ascerta in the legal meaning of the term "support." Only after thorough research \VOuld
the mean ing of the term become clear.

3 4
AICPA, Statement on Standards for Tax Services# No. 7, '" Form and Con.tent Sec. 152(e)( l ){A) and Sec. 152(d)( l ){C).
of Advice ro Taxpayers; 2010, Pa ra. 6.
1 - 6 Corporation s .,.. Chapter 1
TYPI CAL MISCONCEPTION
Many taxpayers believe tax prac-
t itioners spend most of their time
preparing tax returns. In reality,
providing tax advice that accom-
plishes the taxpayer's objectives
is one of the most important re-
sponsibilities of a tax advisor. This
latter activity is tax consulting as
compared to tax compliance.
5 Rev. Rul. 93-86, 1993-2 C.B. 7 1.
In other instances, the legal language is quite clear, but a question arises as to ,vhether
the taxpayer's transaction conforms to a specific pattern of facts that gives rise to a par-
ticu lar tax result. Ultimately, the peculiar facts of a transaction or event determine its tax
consequences. A change in the facts can significantly change the consequences. Consider
the follo,ving illustrations:
Illustration One
Facts: A holds stock, a capita l asset, that he purchased two years ago at a cost of $1,000. He
sells the stock to B for $920. What are the tax consequences to A?
Result: Under Sec. 1001, A realizes an $80 capital loss. He recognizes this loss in the current
year. A must offset the loss against any capital gains recognized during the year. Any excess
loss is deductible from ordinary income up to a $3,000 annual limit.
Change of Facts: A is B's son.
New Result: Under Sec. 267, A and B are related parties. Therefore, A may not recognize
the realized loss. However, B may use the loss if she subsequently sells the stock at a gain.
Illustration T,vo
Facts: C donates to State University ten acres of land that she purchased two years ago for
$10,000. The fair market value (FMV) of the land on the date of the donation is $25,000.
C's adjusted gross income is $100,000. What is C's charitable contribution deduction?
Result: Under Se.c. 170, C is entitled to a $25,000 charitable contribution deduction (i.e., the
FMV of the property unreduced by the unrea lized long-term gain).
Change of Facts: C purchased the land 11 months ago.
New Result: Under the same IRC section, C is entitled to on ly a $10,000 charitable contri-
bution deduction (i.e., the FMV of the property reduced by the unrealized short-term gain).
Illustration Three
Facts: Acquiring Corporation pays Target Corporation's shareholders one million shares of
Acquiring voting stock. In return, Target's shareholders tender 98 % of their Target voting
stock. The acquisition is for a bona fide business purpose. Acquiring continues Target's busi-
ness. What are the tax consequences of the exchange to Target's shareholders?
Result: Because the transaction qualifies as a reorganization under Sec. 368(a)(1 )(B), Target's
shareholders are not taxed on the exchange, ,vhich is solely for Acquiring voting stock.
Change of Facts: In the transaction, Acquiring purchases the remaining 2 % of Target's
shares with cash.
New Result: Under the same IRC provision, Target's shareholders are no,v taxed on the
exchange, which is not solely for Acquiring voting stock.
CREATING A FACTUAL SITUATION
FAVORABLE TO THE TAXPAYER
Based on his or her research, a tax advisor might recommend to a taxpayer ho,v to struc-
ture a transaction or plan an event so as to increase the likelihood that related expenses
,viii be deductible. For example, suppose a taxpayer is assigned a temporary task in a
location (City Y) different from the location (City X) of his or her permanent employ-
ment. Suppose also that the taxpayer ,vanes to deduct the meal and lodging expenses
incurred in City Y as well as the cost of transportation thereto. To do so, the taxpayer
must establish that City X is his or her tax home and that he or she temporarily ,vorks
in City Y. (Section 162 provides that a taxpayer may deduct travel expenses ,vhile "a,vay
from home" on business. A taxpayer is deemed to be "a,vay from home" if his or her em-
ployment at the ne,v location does not exceed one year, i.e., it is "temporary.") Suppose
the taxpayer wants to kno,v the tax consequences of his or her ,vorking in City Y for ten
months and then, within that ten-month period, finding permanent employment in City Y.
What is tax research likely to reveal?
Tax research ,viii lead to an IRS ruling stating that, in such circumstances, the employ-
ment will be deemed to be temporary until the date on ,vhich the realistic expectation
about the temporary nature of the assignment changes. 5 After this date, the employment

OBJECTIVE 4 The language of the !RC is general; that is, it prescribes the tax treatment of broad catego-
Identify the sources of
tax law and assess the
authoritative value of each
A DDITIO NA L COM M ENT
Comm ittee reports can be helpful
in interpreting new legislation
because they indicate the intent
of Congress. With the prolifera-
tion of tax legislation, committee
reports have become especially
important because the Treasury
Department often is unable to
draft the needed regulations in a
timely manner.
6 The size of a conference committee can vary. Ir is made
her of members from the House and the Senate.
Tax Research ~ Co rp oration s 1 -7
\Viii be deemed to be permanent, and travel expenses relating to it will be nondeductible.
Based on this finding, the tax advisor might advise the taxpayer to postpone his or her
permanent job search in City Y unti l the end of the ten -month period and simply treat his
or her assignment as temporary. So doing ,vould lengthen the time he or she is deemed
to be "a\vay from home" on business and thus increase the amount of meal, lodging, and
transportation costs deductible as travel expenses. The taxpayer should compare the tax
savings to any additiona l personal costs of maintaining t\VO residences.
THE SOUR C ES OF TAX LAW
ries of transactions and events. The reason for the generality is that Congress can neither
foresee nor provide for every conceivable transaction or event. Even if it could, doing so
\VOuld render the statute narrov>' in scope and inflexible in application. Accordingly, in-
terpretations of the !RC-both administrative and judicia l-are necessary. Administrative
interpretations are provided in Treasury Regulations, revenue ru lings, revenue proce-
dures, and several other pronouncements discussed later in this chapter. Judicial interpre-
tations are presented in court opinions. The term tax law as used by most tax advisors
encompasses adm inistrative and judicial interpretations in addition to the !RC. It also
includes the meaning conveyed in reports issued by Congressional committees involved in
the legislative process.
THE LEGISLATIVE PROCESS
Tax legislation begins in the House of Representatives. Initially, a tax proposal is incor-
porated in a bill. The bill is referred to the House Ways and Means Committee, \Vhich is
charged ,vith reviewing all tax legislation. The Ways and Means Committee holds hearings
in ,vhich interested parties, such as the Treasury Secretary and IRS Commissioner, testify. At
the conclusion of the hea rings, the Ways and Means Committee votes to approve or reject
the measure. If approved, the bill goes to the House floor \Vhere it is debated by the full mem-
bership. If the House approves the measure, the bill moves to the Senate ,vhere it is taken
up by the Senate Finance Committee. Like Ways and Means, the Fina nce Committee holds
hearings in v,hich Treasury officials, tax experts, and other interested parties testify. If the
committee approves the measure, the bill goes to the Senate floor where it is debated by the
full membership. Upon approval by the Senate, it is submitted to the President for his or her
signature. If the President signs the measure, the bill becomes public la\V. If the President ve-
toes it, Congress can override the veto by at least a t\VO·thirds majority vote in each chamber.
Generally, at each stage of the legislative process, the bill is subject to amendment. If
amended, and if the House version differs from the Senate version, the bill is referred to a
House-Senate conference committee.6 This committee attempts to resolve the differences
between the House and Senate versions. Ultimately, it submits a compromise version of the
measure to each chamber for its approva l. Such referra ls are common. For example, in 1998
the House and Senate disagreed over ,vhat the taxpayer must do to shift the burden of proof
to the IRS. The House proposed that the taxpayer assert a "reasonable dispute" regarding a
taxable item. The Senate proposed that the taxpayer introduce "credible evidence" regard-
ing the item. A conference committee \Vas appointed to resolve the differences. This com-
mittee ultimately adopted the Senate proposal, ,vhich was later approved by both chambers.
After approving major legislation, the Ways and Means Committee and Senate Finance
Committee usually issue official reports. These reports, published by the U.S. Government
Printing Office (GPO) as part of the Cumulative Bulletin and as separate documents,
explain the committees' reasoning for approving (a nd/or amending) the legislation.7
In addition, the GPO publishes both records of the committee hearings and transcripts
of the floor deba tes. The records are published as separate House or Senate docu-
ments. The transcripts are incorporated in the Congressional Record for the day of the
up of an equal num ~ 1TI1.e Ommlarive Bulletin is described in the discussion of revenue rulings
on page C:1 · 12.
1 - 8 Corporation s .,.. Chapter 1
EXAM PLE C:1 -4
A DD ITIONA L COM M ENT
The various tax services, discussed
later in this chapter, provide IRC
histories for researchers who need
to work with prior years' tax law.
EXAM PLE C:1 -5
EXAM PLE C:1 -6
8 S. Rept. No. 105-174, 105th Cong., 1st Sess. (unpaginared) (1998).
debate. In tax research, these records, reports, and transcripts are useful in deciphering the
meaning of the statutory language. Where this language is ambiguous or vague, and the
courts have not interpreted it, the documents can shed light on Congressional intent, i.e.,
\Vhat Congress intended by a particular term, phrase, or provision.
.... In 1998, Congress passed leg islatio n concerning shifting t he burden of proof to t he IRS. This
legislation was codified in Sec. 7491. The question arises as to what constitut es "credible evi-
dence" because the taxpayer must introduce such evidence to shift the bu rden of proof to
the IRS. Section 7491 does not define the term. Because the provision was relatively new, few
courts had an opportun ity to interpret what "credible evidence" means. In the absence of rele-
vant statutory or judicial authority, the resea rcher might have looked to the committee reports
to ascertain what Congress intended by the term. Senate Report No. 105-174 states t hat "cred-
ible evidence" means evidence of a quality, which, "after critical analysis, the court would find
sufficient upon wh ich to base a decision on the issue if no contrary evidence were submitted.'' 8
This la nguage suggests that Congress intended t he term to mea n evidence of a kind sufficie nt
to withstand judicial scrutiny. Such a mean ing should be regarded as conclusive in the absence
of other a uthority. ....
THE INTERNAL REVENUE CODE
The IRC, which comprises Title 26 of the United States Code, is the foundation of all tax
la\V. First codified (i.e., organized into a single compilation of revenue statutes) in 1939,
the tax la\V ,vas recodified in 1954. The IRC \Vas known as the Internal Revenue Code
of 1954 until 1986, \Vhen its name \Vas changed to the Internal Revenue Code of 1986.
Whenever changes to the IRC are approved, the old language is deleted and ne\v language
added. Thus, the IRC is organized as an integrated document, and a researcher need not
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The IRC contains provisions dealing \vith income taxes, estate and g ift taxes, employ-
ment taxes, alcohol and tobacco taxes, and other excise taxes. Organizationa lly, the IRC
is divided into subti tles, chapters, subchapters, parts, subparts, sections, subsections, para-
graphs, subparagraphs, and clauses. Subtitle A contains rules relating to income taxes,
and Subtitle B deals \vith estate and gift taxes. A set of provisions concerned \Vith one
general area constitutes a subchapter. For example, the topics of corporate distributions
and adjustments appear in Subchapter C, and topics relating to partners and partnerships
appear in Subchapter K. Figure C: 1-2 presents the organizational scheme of the !RC.
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gains and losses." Although a tax advisor need not kno\v all the IRC sections, paragraphs,
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.... Section 7701, a definitional section, beg ins, "When used in th is title..." and then provides a
series of definitions. Because of this broad reference, a Sec. 7701 defin ition applies for all of
Title 26; that is, it applies for purposes of the income tax, estate and gift tax, excise tax, and
other taxes governed by Title 26. ....
.... Section 302(b)(3} allows taxpayers whose stock holdings a re completely terminated in a re-
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5 A Study of Maya Art, 1913, p. 225. ↑
6 See his commentaries on the several codices, passim. ↑
7 See Torquemada, bk. vi, c. 24. ↑
8 Sahagun, III, c. 4; Anales de Quauhtitlan. ↑
9 On Quetzalcoatl generally see Sahagun, passim; Torquemada, vol. i, p. 254; Motolinia, tom. i,
pp. 10–11; and Mendieta, passim. ↑
10 Consult bibliography to chapter ix of H. B. Alexander’s North American Mythology. Boston,
1916. ↑
11 Sahagun, bk. vi, c. viii. ↑
12 See appendix on Tonalamatl. ↑
13 See chapter on Cosmogony. ↑
14 Seler, Codex Vaticanus B, 1902–3, p. 174. ↑
15 In many cosmogonies—Hindu, Babylonian, Chinese, Scandinavian, for example—the earth is
formed from the remains of a slain monster or living being. ↑
16 See section on Tlaloc. ↑
17 Payne in his History of the New World called America, vol. i, 1892, pp. 424 ff., was the first to
indicate the “fetishtic” nature of this statue, which he identifies as that of Chicomecoatl. He pours
the vials of scorn upon “the Italian dilettante Boturini” for his identification of the block as
Uitzilopochtli-Teoyaomiqui. He further states that it “has no limbs,” but its large, scaly dragon-legs
are at least as obvious as his lack of success in giving the sculpture its proper name. ↑
18 See my article “Cherokees” in Hastings’ Encyclopædia of Religion and Ethics, vol. iii, p. 504. ↑
19 See Brinton, Nagualism. ↑
20 Anales de Quauhtitlan (Brasseur, Hist. Nat. Civ. de Mex., vol. i, pp. 400 ff.). ↑
21 Codex Vaticanus, 1902–3, p. 75. ↑
22 For much Mexican star-lore of value see Seler’s Venus Period in the Picture-Writings of the
Borgia Codex Group, translated into English in Bulletin 28 of the Bureau of American Ethnology,
pp. 355 ff. For the myth see section on Cosmogony. ↑
23 Bk. ii, c. 4. ↑
24 See Appendix on Tonalamatl. ↑
25 Sahagun, bk. ii, Appendix. ↑
26 Clavigero, Storia del Messico, vol. i, bk. vi, p. 257 (English translation). ↑
27 The native name for Mexico, signifying “Place upon the water.” ↑
28 Monarq. Ind., tom. ii, p. 525. ↑
29 Hist. Mex., tom. i, pp. 291–2. ↑
30 See the section on Tlaloc. ↑
31 Notes on the Shushwap People of British Columbia, “Proceedings and Transactions of the Royal
Society of Canada,” 1891, vol. ix, sect. ii. Montreal, 1892. ↑
32 Sahagun, Hist. Gen., bk. ii, c. xiv. ↑
33 Hist. de Tlaxcallan, c. v. ↑
34 See Section on Itzpapalotl. ↑
35 See chapter on Cosmogony. ↑
36 See Sahagun, bk. i, c. 6. ↑
37 See chapter on Cosmogony. ↑
38 Torquemada, bk. viii, c. 13. ↑
39 Although some of the old authors, Bernal Diaz for instance, say explicitly that the gods of one
city were not recognized in another, in effect they were, only under other names. ↑
[Contents]
CHAPTER II
 COSMOGONY

Accounts of the creation of the world and of man, even as handed down to us by
those writers on Mexican mythology who had the best opportunities for collecting
them, are prone to vagueness, and differ so materially one from another that we will
probably not be in error if we impute their inconsistencies to a variety of local
origins. As regards the agencies by whom the creation or reconstruction of the earth
was accomplished, we are not in doubt, for certain passages in the Interpretative
Codices find almost exact corroboration in the creation story contained in the Popol
Vuh, the mythic book of the Quiche of Guatemala (which was unknown to the
interpreters of the Mexican Codices), as well as in similar works of Maya origin.

The interpreter of the Codex Telleriano-Remensis states that the god Tonacatecutli,
“when it appeared good to him, breathed and divided the waters of the heavens and
the earth, which at first were all confused together, and disposed them as they now
are.” 1 Further, “he breathed and begot Quetzalcoatl, not by connection with a
woman, but by his breath alone.” 2 The first of these deities, and his female
counterpart Tonacaciuatl, are almost certainly spoken of in the Popol Vuh as “the
serpents covered with green feathers,” which, farther on in the Quiche work, are
alluded to as Xpiyacoc and Xmucane, gods who are generally admitted to be the
same as the Mexican Oxomoco and Cipactonal, who, again, are either identical
with or closely connected with Tonacatecutli and his spouse. 3 Quetzalcoatl, [37]too,
appears in the Popol Vuh as Gucumatz, a known Quiche equivalent or translation
of his name, for as “wind” or “breath” he was also thought of as “spirit” or “life,” and
probably his fecundating efficacy as a water-bearing god was also taken into
consideration. In the Sahagun MS. in the Academia de la Historia, Madrid, is a
passage which reads when translated: “They say that he made, created, and
formed us whose creatures we are, Topiltzin Quetzalcoatl, and he made the
heaven, the sun, the earth.” The Anales de Quauhtitlan or Codex Chimalpopca, 4
too, relates how Quetzalcoatl created the four classes of humanity, the men of the
four “suns” or periods of the world, and how men were made by him on the day “7
wind,” and, as we shall see, the work of creation in detail is alluded to in the Historia
de los Mexicanos por sus Pinturas, as effected by him and by Tezcatlipocâ. Lastly,
we find in the Creative Council of the Quiche heaven, Hurakan, who is none other
than Tezcatlipocâ, a deity closely connected with Quetzalcoatl in at least one
Mexican creation myth.
[Contents]

THE “AGES” OF MEXICAN COSMOGONY

Having thus satisfied ourselves regarding the creative personnel of the Mexican
pantheon, and preserving further proof of the constructive character of certain of
these deities until we come to discuss them individually, we may proceed to
examine such myths as tell of the formation of the world. In the belief of the
Mexicans the earth was not destined to receive its present inhabitants, although
occupied by man-like beings, until it had undergone a series of cataclysms or partial
destructions, regarding the precise incidence and even the number of which there is
a marked difference of opinion on the part of the older authorities.

The interpreter of the Codex Vaticanus states that “in the first age” (or “Sun,” as
these periods were called by the Nahua of Mexico) “water reigned until at last it
destroyed [38]the world.… This age, according to their computation, lasted 4,008
years, and on the occurrence of that great deluge they say that men were changed
into fish, named Tlacamichin, which signifies men-fish.” 5 The second age, he tells
us, lasted for 4,010 years and the world was ended by the force of violent winds,
the catastrophe concluding by the transformation of men into apes. The third age
endured for 4,801 years and ended in a universal fire, and in the fourth, which
occupied 5,042 years, the human race, which had never ceased to transmit a few
survivors from one of these epochs to the next, was almost destroyed by famine.

In his Historia Chichimeca 6 Ixtlilxochitl calls the first of these epochs Atonatiuh
(Water Sun), in which all men perished by a great inundation. The second epoch,
Tlachitonatiuh (Earth Sun), ended with violent earthquakes. In this age lived
gigantic beings called Quinames. The third epoch was Ecatonatiuh, or “Sun of
Wind,” in which edifices, trees, and men were nearly all destroyed by hurricanes,
those who remained being changed into creatures of an intelligence so low as to be
almost indistinguishable from monkeys. 7 The Texcucan chronicler does not furnish
us with the name of the present age in his Historia, nor in his Relaciones, 8 where,
however, we receive fuller information regarding the first three epochs, which he
succeeds in carelessly transposing, giving the third the second place.
 THE GREAT CALENDAR STONE OF MEXICO.

(Now in the Museo Naçional, Mexico.)

Camargo 9 would almost appear to have been indebted to Ixtlilxochitl for his version
of the creation myth, but he seems to have been under the impression that only two
of the epochs were ended. That three past cataclysms had taken place and that
four ages in all had occurred is, indeed, the most generally favoured version of the
story, but some [39]authorities seem to have been of the opinion that a myth was
current among the Mexican people which stated that no less than five epochs had
taken place in the history of the world. Gama, Gomara, and Humboldt share this
view, and Mendieta is of opinion that five “suns” existed before the present era, all
of which were of such noxious character that the inhabitants of the earth languished
and perished through their baneful influence.

But we have more stable authority for the sequence of these “suns” or epochs. It is
probable that this cataclysmic theory was in vogue among the Nahua for
generations before it received a more or less definite form, and, indeed, Veytia 10
and Ixtlilxochitl 11 state that the number of suns was agreed upon at a meeting of
native astronomers within traditional memory. We are probably following the official
version of the myth if we accept that to which the so-called calendar-stone of
Mexico gives sculptured form and which may be interpreted as follows: While the
world was still wrapped in primeval gloom, the god Tezcatlipocâ transformed
himself into the sun. This epoch, which was known as Naui Ocelotl or “Four
Jaguar,” ended in the destruction of humanity and the race of giants who then
inhabited the earth by fierce jaguars. Quetzalcoatl became the second sun, and the
age of Naui Eecatl or “Four Wind” ended in violent hurricanes, during which men
were transformed into monkeys. Tlaloc then took upon himself the task of providing
the world with light, and his epoch of Naui Quiauitl or “Four Rain” came to an end
by means of a deluge of fire. The goddess Chalchihuitlicue represented the sun of
the age Naui Atl, “Four Water,” at the end of which there descended a deluge in
which men were changed into fishes. Later there appeared the present sun, Naui
Olin, which, it was believed, would end in earthquakes.

[Contents]

THE MAKING OF THE EARTH

The second chapter of the Historia de los Mexicanos por [40]sus Pinturas, a précis
of the opening chapters of which is given farther on, states that the gods “created a
great fish which is called the Cipactli, which is like the cayman [alligator], and of this
fish they made the earth.”

The description of the earth-monster, as it appears in the Codices, as an alligator or

sword-fish is, however, by no means convincing. Moreover, the sculptured
representation of the earth-monster in Maya art, especially in such examples as
that from Copan, is essentially dragon-like in form, and there would seem to be little
difficulty in classing the Cipactli as an earth-dragon, similar in nature to the cosmic
monster of Chinese art and mythology. The fact, too, that in the native paintings we
frequently observe the sun-god in the act of being swallowed by the Cipactli
strengthens the analogy with the Chinese example.
The Jaguar-sun.
 The Wind-sun.

STONES SHOWING THE SYMBOLS OF THE “SUNS” OR AGES.

[Contents]

THE PEOPLING OF THE EARTH

The precise manner in which the earth was peopled by the gods is also a subject
concerning which great variety of opinion is shown by the older writers on Mexican
beliefs, and, as in the case of the cosmogonic myth proper, this is probably to be
accounted for by local variation. Mendieta 12 is our authority for a conception which
appears to have gained wide currency in many parts of Mexico. There is good
evidence that he in turn received it from Andres de Olmos, a friar of great literary
integrity and linguistic capability, whose writings we may regard with credence and
confidence. The myth opens in the heavenly abode of the gods Citlalatonac and
Citlalicue, who were also known as Ometecutli and Omecihuatl or Tonacatecutli and
Tonacaciuatl, and whom the Mexicans regarded as the eventual sources of all
human life. The goddess gave birth to a flint knife, probably such an implement as
was employed for the purpose of human sacrifice. The circumstance appeared of
bad omen to her sons, who, scandalized by it, cast the flint earthwards. It fell in the
vicinity of Chicomoztoc, the Place of Seven Caves, [41]and immediately there
sprang from it an army of sixteen hundred gods, who, discontented with their
condition, dispatched Tlotli, the Hawk, as an ambassador to the heavenly sphere to
ask as a boon that the power of creating men might be conferred upon them, as it
was not fitting that beings of divine origin should suffer the miseries of earthly toil.
Their mother, who also seems to have been perplexed by the manner of their birth,
replied in no very gracious terms. But in order to relieve their wretchedness, she
directed them to seek the good offices of Mictlantecutli, Lord of the Realm of the
Dead, from whom, she suggested, they might obtain some of the relics of past
generations, which, if subjected to the magical influence of sacrifice, might provide
the beginnings of a new earth-race. After consultation, the earth-gods chose
Xolotl 13 as their messenger to the place of the dead, and after an interview with its
terrible ruler, he succeeded in obtaining a bone of superhuman dimensions. Fearful
of treachery at the hands of Mictlantecutli, Xolotl turned to flee, but was pursued
and, falling in his flight, broke in pieces the precious relic he carried. These he
hastily gathered up and succeeded in quitting the subterranean world without
mishap. Returning to his brothers, he placed the bone in a vessel, and each of the
earth-gods, drawing blood from his own body, dropped it into the receptacle. For
three days nothing occurred to justify their hopes; but on the fourth the gory mass
stirred, and from its depths there emerged a human boy. Satisfied with the
experiment, the gods repeated it, and at the end of another four days a girl arose
from the vessel. Xolotl was appointed guardian to the children so miraculously
created, 14 and nourished them upon the milk-like juice of the maguey plant. They
throve apace, and in course of time became [42]man and woman, the progenitors of
the entire human race, who differ in bulk and stature as the pieces of the rescued
bone varied in size and shape. Thus were born Iztac Mixcoatl the first man and
Ilanceuitl or Ilamatecutli, his wife.
The Water-sun.
 The Rain-sun.

STONES SHOWING THE SYMBOLS OF THE “SUNS” OR AGES.

[Contents]

CREATION OF THE SUN AND MOON

These deeds had, however, passed in a world of darkness, for as yet the sun had
not risen. A council of the gods was assembled at Teotihuacan, a locality of great
sanctity, and seated round a council fire, it considered the means by which the
luminary might be created. It was resolved that he who first cast himself into the fire
should be transformed into the sun. The offer was accepted by Nanahuatzin, who
was afflicted with a painful disease, had therefore found life intolerable and did not
dread the transformation. Nothing happened for some time after his self-immolation,
and the waiting gods began to make wagers with one another regarding the place
in the heavens where the sun would be likely to show itself. None of them had
considered it probable that it would rise in the East, and when at last it became
visible in that quarter, it was as a stationary mass which directed such scorching
rays upon them that they dispatched the hawk messenger to request it to depart.
Whether or not Nanahuatzin in his rôle of Sun-god was wroth with his brothers for
personal reasons, he replied that it was his intention to destroy them utterly. A great
fear seized upon some, whilst others grew angry and caught up their weapons.
Among the latter was Citli, who fitted an arrow to his bow and fired at the
transformed Nanahuatzin. The sun-god avoided the shaft. He could not, however,
evade all those which followed, but seizing one, cast it back at Citli, whom it
transfixed and slew. Fiercer became the heat, until at length the gods could tolerate
it no longer, and felt that it behoved them to perish by each other’s hands rather
than by the ignoble death of suffocation. They agreed that Xolotl should dispatch
them one by one, cutting open their breasts, and this holocaust he undertook, finally
slaying himself. Before perishing, the gods left their raiment to their personal
[43]servants, of which each retainer made a bundle, wrapping his master’s clothing
round a stick, placing a small green stone inside to serve as a heart, and naming it
after the god to whom it had belonged. Olmos himself encountered such a relic in
Tlalmanalco, exhibiting evidences of very considerable age. 15 On the death of the
gods the sun began to move in the heavens, and a god, Tecciztecatl, who had
hidden himself in a cavern when Nanahuatzin leaped into the fire, now emerged
from his hiding-place and took the form of the moon. The retainers carried the
bundles from place to place, and one of them, the servant of Tezcatlipocâ, coming
to the sea-shore, had a vision of his deceased master, who commanded him to
betake himself to the house of the sun and to bring him singers and players of
instruments to assist in the celebration of a festival. To enable the messenger to
travel to the Sun-House, the whale, the siren, and the tortoise were asked to form
themselves into a bridge which might reach the abode of the luminary. The servant
crossed it, singing sweetly as he went, and his song was heard by the Sun, who
straitly commanded his retainers not to respond to it on being approached by the
singer. This some of them failed to do, and returning with the messenger, took with
them the necessary instruments wherewith to celebrate the festival of Tezcatlipocâ.

The people of Texcuco, says Olmos, naturally placed the occurrence of these
events within their own boundaries, but they added (according to a pictorial
manuscript which they showed the friar) that the Sun shot a dart into the ground
and at this spot the first man arose. He was imperfect, being formed only from the
armpits upward. He was followed by a woman. Mendieta suppresses the remainder
of the myth because of its Rabelaisian details, but we may conclude that from these
twain humanity was descended.

Sahagun’s account of the creation of the sun and moon 16 [44]differs somewhat from
the foregoing and is as follows: The gods met at Teotihuacan, and asked one
another: “Who will undertake the task of lighting the world?” to which one god called
Tecciztecatl (he who was to become the Moon-god) replied: “That will I.” They cast
about for still another member of the pantheon to undertake the duty. At last they
fixed upon one who was afflicted with a terrible disease who at once agreed to the
accomplishment of their desires. During four days the gods prepared for the
occasion by acts of penitence, then they kindled a fire on a rock named Teotexcalli
(high place of the gods). Meanwhile Tecciztecatl made offerings of many precious
things, rich feathers and golden ornaments. The spines with which the gods
ceremonially pricked themselves were like the spines of the maguey, but were
made from precious stones, and the copal they used for incense was of no common
sort. The victim, who was called Nanahuatl, offered nine green reeds, joined three
and three, instead of the ordinary branches and balls of grass and spines of the
maguey generally employed for such ceremonies, and these he saturated with his
own blood. In place of copal he offered up the scabs of his sores. The gods built a
tower for each of the two divinities who had undertaken the illumination of the world,
and performed penance for four days and four nights. They then strewed the
ground with the branches, flowers, and other objects of which they had made use
during that time. On the night following, shortly before midnight, they brought
Tecciztecatl his ornaments. These consisted of a plumage called aztacomitl, made
of herons’ feathers, and a jacket of light stuff, whilst to Nanahuatl they gave a crown
of paper called amatzontli (paper hair) and a stole and cincture, likewise of paper.
Midnight having arrived, all the gods ranged themselves in the place called
Teotexcalli, where the fire had burned for four days. They arranged themselves into
two files, one on either side of the fire, and Tecciztecatl was requested to cast
himself into the burning mass. Terrified by the intense heat which he experienced
as he advanced towards the flames, the god recoiled; again and again he essayed
[45]to leap into the fire, but his courage failed him. Then the gods called upon
Nanahuatl, who, on being summoned, immediately cast himself into the blazing
mass, where he at once began to crackle “like meat that roasts.” Tecciztecatl,
ashamed of his former conduct, now followed him into the conflagration, and it was
said that the eagle entered the flames at the same time, which is the reason
assigned for its dark plumage. The tiger or ocelot followed, and was only partly
burnt, as is witnessed by its spots. It is evident that this myth applied in some
manner to the Aztec military brotherhoods of quauhtli and ocelotl, who wore the
eagle and ocelot insignia respectively. 17
The gods had already waited some time to witness the resurrection of Nanahuatl,
when they beheld the heavens commence to grow red. Terrified at the sight, they
fell upon their knees and could not comprehend whence the light had arisen. The
glow of sunrise illuminated every point of the compass, but many fixed their gaze
upon the East, feeling that in that direction the luminary would first be sighted.
Those who gazed thither were Quetzalcoatl (also called Eecatl), Totec, and
Tezcatlipocâ. Others called Mimixcoa were innumerable, and there were also
present four goddesses, Tiacapan, Teicu, Tlacoeua, and Xocoyotl. When the sun
rose at length he appeared very red, and no one might look upon him without being
blinded by his rays. The moon appeared at the same time, and gave forth light
equal to that of the orb of day. But the gods thought it ill that the moon should be as
bright as the sun, and therefore one of them took a rabbit and cast it at the face of
the moon, so that it remained there to dim its splendour. Although the sun and
moon were raised above the earth, they remained stationary. They spoke mockingly
to their erstwhile companions.

“How now,” they said, “do you wish to remain in mortal shame? Die all of you and
confer life upon the stars.” The wind then offered to discharge the function of
immolating [46]the gods and slew them one by one. Only Xolotl refused to die, and
begged for life, weeping so sorely that his eyes dropped out. When those who were
to make the sacrifice laid hold of him he fled and concealed himself in a field of
maize, where he changed himself into a stalk of that plant having two feet (roots)
such as the peasants call xolotl. But having been recognized among the maize, he
took flight a second time and hid himself among some maguey plants, where he
changed himself into the double maguey plant which is called mexolotl (maguey of
Xolotl). On being discovered a third time he took flight once more and threw himself
into the water, where he took the form of a fish called axolotl. 18 But in this last
disguise he was caught and killed.

When the gods had been slain the wind commenced to whistle and blow with
violence, so that at length the burning globe of the sun began to drift over the
heavens. But the moon still remained at rest, and in this manner they became
separated, so that their habit is to rise at different hours.

The Anales de Quauhtitlan, after the manner of the Book of Genesis, states that the
world and all therein were created in seven days. In the sign Tochtli the earth was
created, the firmament was erected in Acatl, animals came into being in Tecpatl,
and man was made out of dust or ashes on Ehecatl, the seventh day, but
completed and perfected by Quetzalcoatl, who appears to have played the part of a
demiurgos as regards the human race. There can be little doubt that this myth has
been sophisticated, or is a later invention. The Anales de Quauhtitlan, however,
sustains the accounts of Olmos and Sahagun regarding the creation of the sun and
moon.

Camargo, speaking of the Tlaxcaltec cosmology, 19 says that the Indians did not
believe that the world had been created, but that it had been produced by chance.
Space, according [47]to their philosophy, has always existed. Veytia 20 states that the
Mexicans believed the world and man to have been created by Tloque Nahuague
(Tonacatecutli). Boturini credits the creation to the same first cause, and passages
in Sahagun lead us to believe that both Tezcatlipocâ and Quetzalcoatl were
regarded as sub-creative spirits, who were either partly or wholly responsible for the
existence of the universe. Clavigero expressly states that the former was “the soul
of the world, the creator of heaven and earth and lord of all things.” 21 Mendieta, 22 a
much older authority, gives it as his opinion that the making and moulding of the
world was the handiwork of several gods, but especially of Tezcatlipocâ,
Uitzilopochtli, and an obscure deity, Ocelopuchtli, who equates with the ocelot
alluded to in Sahagun’s account.

Sahagun, it will be observed, disappoints us in his account of the creation, which he

confines to the details of the appearance of the sun and moon and is silent
concerning the creation of gods and men. This is strange when the facilities he had
for the collection of myths are considered, but as a priest, it is evident that he is
more interested in points of ritual than in religious narrative, which, he evidently
agrees with Curtin’s French-Canadian, is to be regarded as “chose d’absurde.” 23
Even although we possess the sonorous warning of Prescott and the objections of
others to bias us against Ixtlilxochitl, there is little ground for regarding his version of
the Mexican creation story as being other than he received it from sources which
would have been unspeakably precious had he made better use of them as regards
other subjects.

Regarding Ixtlilxochitl’s version of the creation myth, that the creator Tloque
Nahuague, the maker of the planets, brought into being a man and a woman from
whom all human beings are descended, we have no parallel in Mexican myth, nor,
indeed, in American myth, if we accept that of [48]the creation of man current in
ancient Peru, and it is probable that, so far as his version of the creation of
humanity is concerned, Ixtlilxochitl had encountered a myth which was either of
relatively late origin, or had arisen out of the ideas engendered by contact with
Christianity. This is, however, by no means to say that Ixtlilxochitl himself invented
the account. 24
[Contents]

THE HISTORIA DE LOS MEXICANOS

The Historia de los Mexicanos por sus Pinturas is a manuscript of such importance
to the study of Nahua Cosmogony that a short précis of its earlier chapters may,
perhaps, be found of value in this place.

“Tonacatecutli and his consort Tonacaciuatl, who had existed from the beginning,
resolved to undertake the work of creation. They had four sons, the eldest of whom
was Tlactlauque-Tezcatlipocâ, or Camaxtli. He was born of a red colour. The
second son, Yayanque-Tezcatlipocâ, was greater and more powerful than the rest.
He was born black. The third was Quetzalcoatl or Yacatecutli, and the fourth
Omitecilt, and for another name Magueycoatl, and the Mexicans called him Ochilobi
(Uitzilopochtli), for he was left-handed and was chief god to those of Mexico, and
their war-god. Of these four, Tezcatlipocâ was the wisest, was in all places, and
knew the hearts and thoughts of everyone. And for this he was called Moyocoya,
“he who is all-powerful, and who has all those things without which nothing can be.”
Uitzilopochtli was born without flesh, but with bones, 25 and in this state he remained
for six hundred years, during which time the gods made nothing.

“After six hundred years these four god-like brothers were born, and all came
together to order what was to be and the law that they should hold. They made a
half-sun in the midst, the other luminaries great and small, [49]and a man and
woman named Oxomuco and Cipactonal, commanding him to till the earth and her
to spin and weave. From these were born the maceguales or labourers. And to
Cipactonal the gods gave certain grains of maize that she might keep them and use
them for charms and riddles, and since that day women have used them for that
purpose.

“The gods then gave this pair the days of the calendar and divided them into
months, twenty days to each month, and three hundred and sixty days in the year.
Then they made Mictlantecutli and Mictecaciuatl, man and wife, to be the gods of
the infernal regions. Later they made the heavens and space and the water, and
then a great fish like the cayman, which is called cipactli, from which they shaped
the earth. In order to create the gods of water, all four gods joined together and
made Tlaloc and his wife Chalchihuitlicue.

“These gods of water have their place in the four quarters, and in the middle of it
was a great court, where there were four tubs of water. One water is very good, and
this rains when they grow grain and wheat. And these gods of water have many
dwarfish servants in the said house, and these have pitchers, with which they take
the water from the tubs, and sticks in the other hand. When the gods of water wish
them to go to the boundaries, they take the pitchers and sticks and sprinkle the
water as they are told. And when it thunders, they crack the pitchers with the sticks,
and when it lightens they break off a portion of the pitcher.

“All the aforesaid things had been made and created without taking any account of
the years, and without respect of time. The first man and woman had a son called
Piltzintecutli, who desired a wife with whom to live. So the gods made of the hairs of
Xochiquetzal a woman, and thus was the first marriage made. This having been
done, all the four gods saw that the half-sun which had been created gave but little
light. And they saw that they must make another half, because the existing light was
not able to illuminate the world.… Then Tezcatlipocâ became the sun-bearer. And
the gods created the giants, who were very [50]great men and of much strength.…
And they called the age in which Tezcatlipocâ was the sun the age of boasting and
of tigers, for the giants gorged and ate and wanted for nothing. And when thirteen
times fifty and two years were passed, Quetzalcoatl was the sun. Then Tezcatlipocâ
took a great stick and struck upon the water, and turning himself into a tiger, went
out to kill the giants. Afterwards he appeared in the sky, for they said that the ursa
major sank in the water, because it is Tezcatlipocâ.… During the time Quetzalcoatl
was the sun another count went on, which, having ended, Tezcatlipocâ cast out
Quetzalcoatl, who became the wind, which, when it blew on the maceguales, turned
them into monkeys and apes. And there was for sun Tlaloc, which lasted three
hundred and sixty-four years.… During these years Quetzalcoatl rained fire on the
sun, and then created as the sun his wife Chalchihuitlicue. She was the sun for
three hundred and twelve years.

“In the last year in which Chalchihuitlicue was the sun, it rained so heavily that all
the maceguales were turned into fishes. And when it had ceased to destroy, the
heavens fell upon the earth and the great rain began, the which year was tochtli.
And the gods ordered four roads to be made to the middle of the earth for them,
and raised the heavens, and to help them in holding them up they created four
men, called Cotemuc, Yzcoadt, Yzmali, and Tenesuchi, who were created by
Tezcatlipocâ and Quetzalcoatl. Then they made great trees, Tezcatlipocâ one which
was called tazcaquavlt, which is to say “tree of the mirror,” and Quetzalcoatl one
which was called queçalhuesuch, and with the help of the men they had made and
the trees the gods held up the heavens and the stars and made a road in the sky.
“After the heavens had been raised, in the second year after the flood, which was
acatl, Tezcatlipocâ pronounced his name, and there appeared the dumb Mixcoatl,
‘Serpent of the Clouds.’ And they paint him as a serpent. And they drew fire from
fire-sticks, which they called heart of the fire. In the seventh year after the flood was
born Cinteotl, the first son of the first man, who was a god, and [51]his wife a
goddess, and he was made of the hairs of the mother goddess, and it was said that
he was not able to die. And in the eighth year after the flood the gods created the
maceguales, like those that were before. When the first three years of this group of
years had passed, in the first of the next group all the four gods came together, and
said that because the earth had no light, and was dark, and that because there was
no fire, they would make a sun which would give light to the earth, and which would
eat hearts and drink blood. In order to do this they made war, by which they were
able to procure hearts and blood. In this time Tezcatlipocâ made four hundred men
and a hundred women, and on these the sun lived. In the tenth year, Suchicar, the
first wife of Piltzintecutli, the son of the first man, was killed in the war, and was the
first so to die.”

If we search for a common factor among these conflicting ideas, we will, indeed,
find the task one of difficulty. The nature of the sources from which we obtain them
does not permit us to arrange them chronologically, and all that we can found upon
in this respect is their subject-matter, which cannot enlighten us much. As has been
said, we are probably on safe ground if we accept the version of the several ages
hypothetically contained in the so-called Calendar Stone of Mexico. The
circumstance, too, that the sun and moon myth, as related by Olmos, agrees for the
most part with the version of Sahagun, permits us to regard it as a well-recognized
belief. Nor can the variant myth regarding the creation of mankind, which is briefly
described in an annotation, shake our confidence in the credibility of Olmos, as it
obviously differs more in the names of the actors in the drama of creation than in
the circumstances, which are almost identical. But if it is impossible to verify strictly
the place of origin of the Olmos myth, although Texcuco was claimed as its home, it
is permissible to indicate the universal character of that portion of it which deals
with the creation of the heavenly bodies, from its similarity to the analogous
passage in Sahagun’s rendering, which proves that that part of it at least must have
been more or less widely [52]disseminated throughout Mexico. We know that after
the collection of data in any district it was his custom to submit them to experts in
other and distant parts of the country for comparison and verification. We may thus
be justified in classing the Calendar-stone version of the world’s ages and the
Sahagun portion of the creation myth of the luminaries of the last age as among the
standard beliefs of Mexican theology. It follows from Sahagun’s general agreement
with the Olmos-Mendieta account that the portion of that version which he does not
treat of must naturally be within reasonable distance of exactitude. The
circumstance that both of these accounts relate the self-immolation of the gods by
the sacrificial method of having their breasts opened, seems to prove that the myth
was no older than the institution of human sacrifice, which we are perhaps correct
in regarding as of no very great antiquity, although arguments of sufficient cogency
might be brought against this view.

[Contents]

DELUGE MYTHS

As Mexican myths of the creation differ, so do those concerning the great deluge
which at one period was supposed to have overwhelmed the earth. As we have
seen, myths which are concerned with the several ages of the earth dwell upon
such an event, but separate myths exist which also tell of a great flood which is
almost certainly to be identified with the “Water-sun.” The goddess Chalchihuitlicue
(the goddess of water), says one of the interpreters of the Codex Telleriano-
Remensis, “saved herself in the deluge.” The interpreter of the Codex Vaticanus A.
relates that: “Most of the old people of Mexico say that a single man and a single
woman escaped from this deluge, from whom, in course of time, mankind
multiplied. The tree in which they saved themselves was called Ahuehuete (the fir-
tree), and they say that this deluge happened in the tenth sign, according to their
computation, which they represented by water, which on account of its clearness
they place in their calendar. They say that during the first age men ate no bread, but
only a certain kind of wild maize, [53]which they called atzitziutli. They name this first
age coniztal, which signifies the white head; others say that not only did these two
who were preserved in the tree escape, but that seven others remained hidden in a
certain cave, and that the deluge having passed away, they came forth and
restored the population of the earth, dispersing themselves over it: and that their
descendants in course of time worshipped them as gods, each in his own nation.”

A similar myth in the Anales de Quauhtitlan or Codex Chimalpopoca, is also worthy

of quotation.

“And this year was that of Ce-calli, and on the first day all was lost. The mountain
itself was submerged in the water and the water remained tranquil for fifty-two
springs.
“Now toward the close of the year, Titlacahuan (Tezcatlipocâ) had forewarned the
man named Nata and his wife Nena, saying: ‘Make no more pulque, but straightway
hollow out a large cypress, and enter it when in the month of Tozoztli the water shall
approach the sky.’ They entered it, and when Titlacahuan had closed the door he
said: ‘Thou shalt eat but a single ear of maize and thy wife but one also.’

“As soon as they had finished eating, they went forth and the water was tranquil; for
the log did not move any more; and opening it they saw many fish.

“Then they built a fire, rubbing together pieces of wood, and they roasted fish. The
gods Citlallinicuc and Citlallatonac, looking below, exclaimed: ‘Divine Lord, what
means that fire below? Why do they thus smoke the heavens?’

“Straightway descended Titlacahuan Tezcatlipocâ and commenced to scold, saying:

‘What is this fire doing here?’ And seizing the fishes he moulded their hinder parts
and changed their heads, and they were at once transformed into dogs.” 26

[Contents]

THE “COXCOX” FALLACY

It is unnecessary in this place to deal at any length with the quite artificial myth
given by Siguenza and Clavigero, [54]based on a mistaken interpretation of certain
Mexican paintings. Briefly, they state that Coxcox, “the Mexican Noah,” and his
spouse Xochiquetzal escaped from the deluge in a boat which grounded on the
peak of Colhuacan: “the Ararat of Mexico.” Dumb children were born to them, who
received innumerable languages from a polyglot dove. Garcia y Cubas published in
his Atlas Geografico a letter from Ramirez (April 1858) in which the then
conservator of the National Museum of Mexico showed the fallacy of Siguenza’s
interpretation and proved that the pictures in question referred to the wanderings of
the Aztecs in the Valley of Mexico.

A flood myth which has for its hero one of the giants who were supposed to inhabit
the earth in the first age (or rather the first age according to the version which is
supported by the Calendar-stone), states that Xelhua, the giant in question,
escaped the deluge by ascending the mountain of Tlaloc in the terrestrial paradise,
and afterwards built the pyramid of Cholula. The interpreter of the Codex Vaticanus
A says of this story: “In this first age giants existed in that country.… They relate of
one of the seven whom they mention as having escaped from the deluge, that, the
earth becoming populous, he went to Chululan and there began to build a tower
which is that of which the brick base is still visible. The name of that chief was
Xelhua; he built it in order that should a deluge come again he might escape to it.
Its base is 1,800 feet in circumference. When it had already reached a great height
lightning from heaven fell and destroyed it. Those Indians who were under that chief
who had escaped from the deluge, named Xelhua, made bricks out of a mountain in
Tlalamanalco called Cocotle, and from Tlalamanalco to Chulula Indians were
placed to pass the bricks and cement from hand to hand: and thus they built this
tower, that was named Tulan Chulula, which was so high that it appeared to reach
heaven. And being content, since it seemed to them that they had a place to
escape from the deluge if it should again happen, and from whence they might
ascend into heaven—[55]a chalcuitl, which is a precious stone, fell from thence and
struck it to the ground. Others say that the chalcuitl was in the shape of a toad; and
that whilst destroying the tower it reprimanded them, inquiring of them their reason
for wishing to ascend into heaven, since it was sufficient for them to see what was
on the earth. The base of the tower is at the present day still remaining and its
circumference is 1,800 feet.”

This myth has equivalents in the Hindoo story of the manner in which Hanuman,
king of the monkeys, built a bridge from India to Ceylon, and in Scottish legend,
where Corstorphine Church, near Edinburgh, is the scene of the building, the
stones being passed on from hand to hand by the “Picts” from Ravelston Quarry,
some considerable distance away. But it bears a more striking resemblance to the
story of the tower of Babel, the work of another being of gigantic origin—Nimrod.
Xelhua was the mythical ancestor of the people of Tehuacan, and Teotitlan del
Camino. It may be that his myth has been sophisticated by the priestly writers who
set it down, and in any case it seems to be ætiological or explanatory of the
Pyramid of Cholula.

[Contents]

THE FALL OF THE GODS

In the literature of ancient Mexican mythology we find persistent vestigial notices of

a fall of the gods, or rather of certain deities from “heaven.” Thus in the
interpretation of the Codex Telleriano-Remensis we find a divine locality called
Tamoanchan described as the “mansion” from which they fell, and “where they
gathered roses.” The same paragraph 27 relates that Tamoanchan “is the place
where these gods were created whom they feared: it signifies the Terrestrial
Paradise, and accordingly they relate that those gods being in that place
transgressed by plucking roses and branches from the trees, and that on this
account Tonacatecutli and his wife, Tonacacigua, became highly incensed, and cast
them out of that place, and that some of them came [56]to earth and others went to
hell.” One of these, the divinity most frequently associated by the Codices with this
event, Ixnextli, is spoken of in the same work 28 as “Eve, always weeping and
looking at her husband Adam. She is called Ixnextli, which signifies ‘Eyes blind with
ashes,’ and this refers to the time subsequent to her sinning by plucking the roses.”
In Codex Telleriano-Remensis (Plate VII, Kingsborough) she is associated with a
god Ueuecoyotl and is represented as kneeling on a chair with head averted. There
is no doubt that the name given her here, and which is supplemented by the name
Xochiquetzal, is that of a variant of the latter, who is the goddess of flowers.

In his interpretation of this goddess in his work on the Aubin-Goupil tonalamatl (pp.
118–119) Seler gives it as his opinion that the insignia of the goddess Tonacaciuatl,
consort of the creative deity Tonacatecutli, is identical with that of Xochiquetzal, and
proceeds to say that this strongly suggests “that the home of the cosmogonic
speculations embodied in the names of Tonacatecutli and Tonacaciuatl was to be
sought in the region where dwelt the goddess Xochiquetzal, and this was assuredly
not Mexico proper, but appears to have been the group which in one place is
comprised by Torquemada under the name Chalmeca, Olmeca, Xicalanca,
Tepaneca, Xochimilca, and Tlalhuica. Here by Chalmeca are to be understood the
dwellers about the volcano, and by Olmeca, Xicalanca, the aborigines of the
Tlaxcallan district.… Originally the goddess Xochiquetzal is perhaps nothing more
than the deity of one of those mountains from which the life-giving waters flow down
from the fields.” It is easy to believe that Xochiquetzal is a variant of Tonacaciuatl;
but it is not necessary to infer therefrom that the Olmec-Tlaxcaltec version of the
myth relating to her with its cosmogonic speculations was prior in origin to that
which found acceptance at Mexico, even although the Olmecs were regarded as an
older race. Tonacatecutli and his consort were believed to be Toltec deities, and had
thus a greater antiquity behind them than Olmec myth could invest them [57]with.
Codex Vaticanus A tells much the same story regarding Ixnextli and was probably
inspired from the same source.
[Contents]

MEXICAN CONCEPTIONS OF THE UNIVERSE

No definite account of the Mexican conception of the universe has come down to
us, but we are probably founding correctly if we accept the Maya belief as closely
approximating to that in general currency in Mexico. An examination of the central
design in the Maya Book of Chilan Balam of Mani, given in Cogolludo’s History of
Yucatan (1640), shows the earth as a cubical block, by which term it is practically
described in the Popol Vuh (“the quadrated castle, four-pointed, four-sided, four-
bordered”). This the Maya described as tem (“the altar”), that is, the altar of the
gods, the offering upon which was life. Above this cube on four legs is the celestial
vase (cum) containing the heavenly waters, rains, and showers, upon which all life
depends. Above it hang the rain-clouds which fill it and from it springs the vax che,
or Tree of Life, with outspread branches.

A similar illustration from the Codex Cortesiano, 29 a Maya MS. which has been
described as the “Tableau of the Bacabs” or heavenly supporters, shows the Tree
of Life, the Celestial Vase, and the cloud masses. Beneath the tree are seen the
two creative deities, and the whole design is surrounded by the twenty day-signs.

[Contents]

THE FIVE REGIONS OF THE WORLD

The Mexicans divided the universe into five regions. The locus classicus for the
representatives of the gods who preside over these regions is the first sheet of the
Codex Fejérváry-Mayer. The Fire-god occupies the centre of the picture, for just as
fire occupies a space in the middle of the primitive hut, so does Xiuhtecutli maintain
the central position in the universal disposition of things. From him four streams
[58]of sacrificial blood radiate in the direction of the four cardinal points, east, north,
west, south, 30 which are situated at each corner of the picture, for he rules over all
as well as over the centre, which is known as Tlalxicco. These bands of blood end
in the four day-signs—acatl, tecpatl, calli, and tochtli, from which alone the years of
the “calendar” or tonalamatl could be named, and which respectively agree with the
cardinal points noted above. The four sides of the square are also associated with
the four quarters of the universe. Thus the top square in the picture represents
Tlapcopa, Region of the Dawn (the East), the right-hand side Uitznauac, Place of
Thorns (the South), the bottom Ciutlampa, Region of Women (the West), and the
left-hand side Mictlampa, Place of the Dead (the North). Within these squares are
seen four species of trees, belonging to the four points of the compass. They
resemble the trees seen in sheet 49 of Codex Borgia and sheet 17 of Codex
Vaticanus B, from the first of which codices they can be more clearly described.

North.
 South.

THE TREES OF THE WORLD-QUARTERS.

(Codex Fejérváry-Mayer, sheet 1.)

The Tree of the East is represented as a highly conventionalized tree having two
boughs, each with four branches which end in the chalchihuitl (greenstone) symbol.
Round branches are twisted two ropes, green and blue in colour, set with golden
bells. A quetzal bird perches upon the top and the trunk is decorated with the
symbol for war, for the spirits of the sacrificed warriors were believed to dwell in the
eastern heavens, where the sun rose. The tree springs from the body of the Earth-
goddess, and the ornaments borne by it are symbolic of the rich and fruitful
character of the Orient.

The Tree of the North.—This tree is painted half-green, half-blue, but is set with
thorns in every part. Bands of blood and darkness issue from the body of the Earth-
goddess, in which it has its root, and these wind around its boughs. The eagle
stands upon the top, each of its plumes bristling with a sacrificial stone knife.

The Tree of the West.—This has a yellow star, and bears [59]the magic bloom at the
end of each branch. It is surmounted by the humming-bird, and its trunk is dotted
with the stellar eye, in this case the evening star.
East.
 West.

THE TREES OF THE WORLD-QUARTERS.

(Codex Fejérváry-Mayer, sheet 1.)

The Tree of the South.—This, too, is thorny, but painted red, and the trunk is
sprinkled with symbols recalling that of the “spoken word” which in the Codices is
frequently seen issuing from the mouths of gods and men. It may symbolize smoke
or fire, thus alluding to the fiery nature of the region to which the tree belongs. A
cloud of darkness and a stream of blood wind around the stem. It is surmounted by
the arara bird.

These four trees have parallels in Maya mythology, as, for example, on the altar-
pieces of the cross from Palenque (Temple II) and elsewhere.

The gods governing the five regions of the universe are 31:

Centre—Xiuhtecutli.
East—Mixcoatl and Tlaloc.
North—Itztli and Xochipilli.
West—Iztac Mixcoatl and Quetzalcoatl.
South—Macuilxochitl and Xipe.

We find from an examination of the codices that the Mexicans believed that the
“world” or universe was divided into:

Tlalxicco, the centre or “navel” of the Earth.

Tlapcopa, “the region of the Dawn” (the East).
Uitznauac, “Place of Thorns” (the South).
Ciuatlampa, “Region of Women” (the West).
Mictlampa, “Place of the Dead” (the North).

These several regions demand a brief description.

Tlalxicco was the dark interior of the earth, which was supposed to be inhabited by
an animal-headed god or demon, resembling a badger, to whom no name has as
yet been applied, but who seems to possess affinities with sorcery and the darker
arts. A good representation of him is to be found on sheet 9 of Codex Vaticanus B.

Tlapcopa, the East, or “Region of the Dawn,” was regarded [60]as a region of
prosperity, fertility, and abundant food-supplies. It was the house of the Sun, the
region where sacrificed warriors dwelt in bliss, and will be further described when
we come to deal with the subject of “heaven and hell.”

THE TREE OF THE MIDDLE-QUARTER.

Uitznauac or Uitzlampa, “Region of Thorns” (the South), was, as its name implied, a
place of rather evil omen, for it was sometimes thought of as inhabited by Mictlan,
Lord of the Dead. The Mexicans, dwelling in a plateau country where climatic
conditions were temperate, probably regarded the tropics to the south as a region
fatal to health, and generally insalubrious in character.

Ciuatlampa, “Region of Women” (the West), was the place to which those women
who died in their first childbed (Civapipiltin or Ciuateteô) went after death, and as
such falls to be described in the section on “heaven and hell.” But it was also the