UNIVERSITY OF ALBERTA SCHOOL OF BUSINESS
DEPARTMENT OF ACCOUNTING, OPERATIONS AND INFORMATION SYSTEMS
Accounting 468/668 Basic Income Tax
Fall 2018
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Instructor: David Rusnacik CPA, CA, MPAcc Lecture A1 Class: Monday/Wednesday 9:30 am to 10:50 am
Office Hours: Available by appointment only Email: [email protected]
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OFFICE HOURS
By appointment only. Professor Loretta Amerongen has offered to answer any questions during her office hour. Her office is located on the 4th floor in the School of Business (4-21G).
REQUIRED MATERIALS
Textbook: C. Byrd, I. Chen. Canadian Tax Principles, 2018 - 2019 Edition, Prentice Hall Canada Inc., Scarborough, Ontario, 2018.
The use of older versions of the textbook is not recommended due to changing tax rates and legislation. There is also an online access code that is required to download various practice problems so the current version of the textbook is required.
Course Package: The course package contains notes to be used in class as a basis for lectures. The course package is sold by the Accounting club.
LEARNING OBJECTIVES
The course is designed to assist you in developing an understanding of the concepts and rules/regulations of the Income Tax Act which are necessary to determine corporate taxes payable. Specific skills or knowledge will include:
(1) Obtaining an understanding of the rules and principles used to determine corporate income taxes payable.
(2) Review the purpose and mechanics of the concept of integration in the case of business income and investment income.
(3) Address tax planning for a shareholder manager of a corporation
(4) Understand how corporate reorganizations operate and how they can be used in an estate freeze.
(5) Advise a shareholder on the consequences of selling shares vs winding up a corporation and redeeming shares.
This is not an easy course as a significant time commitment is required to understand the materials and practice problems. The fundamentals learned in Accounting 467 will be built upon to gain an understanding of corporate taxation.
APPROACH TO MATERIALS
You will learn more in class if the relevant text material is read prior to coming to class.
The best way to learn and understand tax law is to apply the rules to problems. The textbook provides three types of problems: exercises, self-study problems, and assignment problems.
The solutions to the exercises and self-study problems are included with the text book.
Solutions to relevant assignment problems will be posted on the u Learn site. In order to master the material, you should practice all available questions.
When practicing questions, you should prepare a complete answer before looking at the
solution. Simply reviewing the solution will not be sufficient preparation for exams. The solution should be reviewed with the objective of identifying key concepts or principles underlying the tax treatment of various items. The ability to identify an issue and quickly understand the required approach will save valuable time in exam situations.
PREVIOUS EXAMS
Prior to the midterm and the final exam, I will provide a sample of old exam questions.
EXAMS
Prior to each exam, I will hand out an information sheet about the exam. In order to ensure fairness, you may ask any questions you wish about exam content in class; however I reserve the right to decide whether I will answer a particular question.
EVALUATION
Your grade in the course will be based on the marks you obtain on two midterms and a final exam. The marks will be weighted as follows:
Midterm I 25 %
Midterm II 25 %
Final Exam 50 %
EXAM DATES
Midterm I Wednesday, October 10th
Midterm II Wednesday, November 7th
Final Thursday, December 20th at 9:00AM
Any student who continues to write after time is called for the exam will be penalized.
All exams are closed book. For each exam, I will provide a formula sheet that will be
distributed at the exam. You are required to sign the formula sheet in the space provided and
turn it in with your exam. No writing is permitted on the formula sheet. There is a five mark penalty for any of the following:
• Writing on the formula sheet
• Not signing the formula sheet, or,
• Not turning the formula sheet in with the exam
A copy of the formula sheet to be used for a particular exam will be posted on the course website in a timely basis before the exam so that it can be used while you practice problems prior to the exam.
Students must be able to present their student ID cards or other acceptable photo
identification. Smart phones and any other electronic devices must remain turned off and put away prior to the examination. The only permitted electronic devices are non-programmable calculators. If you do use a programmable calculator, you must clear the memory prior to the commencement of the exam.
GRADES IN THE COURSE
The University average grade distribution is based on all courses across campus including courses of varying levels of difficulty. A curve is used to determine the final grade distribution for this course with natural break points used to distinguish between various grades. As a result, the distribution of grades in this course will not necessarily coincide exactly with the University average distribution. Traditionally the median grade in this course has been a B.
CLASSROOM ETIQUETTE
Attendance: It is your responsibility to attend class. If you miss class for any reason, you are still responsible for all materials covered, announcements made and handouts provided.
Smart phones and other electronic devices: All smart phones and other electronic
communication devices must be turned off for prior to class. Text messaging or emailing, after the start of class, is not permitted under any circumstances as it is very disruptive to not only the instructor but fellow students as well. Audio or video recording of lectures is allowed only with prior written consent of the instructor or as part of an approved accommodation plan.
Laptops: As the course package notes will not be available in electronic format, laptops will not be required for the purposes of taking notes. In order to avoid distraction to students around you, no laptops should be used during class unless a documented medical reason is provided.
ABSENCES AND MISSED WORK
If you are absent from a midterm exam for an acceptable reason (illness or family emergency) you are required to send an email to me informing me that you were unable to attend the midterm and explaining the nature of your difficulty. I may, at my discretion, require proof supporting your stated reason for missing the midterm, either in the form of a statutory declaration or other supporting documentation (email format is not acceptable – hard copies must be provided with an original signature). I follow the policy of sending all requests for deferral to the undergraduate office. In the event that either midterm examination is missed for an acceptable reason, no make-up will be given. Instead, the following will apply:
If either midterm is missed for an acceptable reason, an additional question will be added to your final exam. This question will consist of subject matter from either the first or second midterm. This additional question will be worth 20% of your final grade and your final exam will be worth 55% of our final grade.
If you miss the final exam, you must apply to the undergraduate office for an exam deferral.
The date of the deferred final exam is Friday, January 18, 2019.
Please remember that it is your responsibility to ensure that any travel arrangements do not conflict with the outlined exam schedules.
SUCCESS IN THE COURSE
In order to do well in the course, you will have to commit a significant amount of time to learning the material. In order to be successful, consider doing the following:
• Attend all lectures.
• Review all of the lecture notes.
• Complete all the textbook readings.
• Practice all of the problems including exercises, self-study, assignment problems and additional problems from old exams posted in the course website.
• When reviewing solutions to practice problems, consider making notes of items missed and determine the correct treatment by identifying why your treatment is wrong and the solution treatment is correct.
IN CLASS NOTES AND HANDOUTS
It is your responsibility to ensure that you pick up all handouts. I will not, under any circumstances, email any class handouts. Furthermore, if you miss a class, it is your responsibility to obtain the notes from another student.
No Class - November 13th -16th – Fall Term Reading Week
Corporate Tax Detailed Topical Coverage
Prior to doing the assigned readings, you should review the learning objectives at the beginning of each relevant chapter. To be finalized first week of classes.
Topic Paragraphs
Non-Arm’s Length Transactions Attribution
Death of a Taxpayer Corporate Taxable Income Acquisition of Control Tax Payable
Integration for Business Income Taxation of Investment Income Investment Tax Credits
Tax Basis Shareholder’s Equity Association
Shareholder Tax Planning Section 85
Corporate Re-organizations QSBCS
Wind-ups
You are responsible for all assigned textbook readings, regardless of whether they are covered in class.
Corporate Tax
List of Applicable Problems To be finalized first week of classes Self-Study Problems Supplementary SS
Problems Assignment Problems Non-Arm’s Length Transactions, Attribution & Death of a Taxpayer
Taxable Income Acquisition of Control
Tax Payable
Integration for Business Income Taxation of Investment Income
Investment Tax Credits Tax Basis Shareholder’s Equity
Association
Shareholder Tax Planning
Section 85
Practice problems will be provided Corporate Re-organizations
QSBCS Sale of a Business
