UNIVERSITY OF ALBERTA ALBERTA SCHOOL OF BUSINESS
DEPARTMENT OF ACCOUNTING & BUSINESS ANALYTICS Accounting 468/668
Corporate Taxation Fall 2020
Instructor: Vishal P. Baloria, PhD, CPA, CA Lecture A1
Office: 3-40B Business Building Phone No.: (780) 492-9491
Email: [email protected]
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Class Times: Lecture A1 Monday/Wednesday 9:30-10:50 Zoom Chat
Course Delivery: This course will be delivered remotely this semester. We will have synchronous lectures through Zoom during regular class time. These lectures will be recorded and posted on our eClass page for your review. I expect the vast majority of students to attend class regularly and engage in the classroom discussion via video and audio. If you expect to be absent from these lectures for any reason whatsoever, I suggest you email me in advance so we can work out alternative arrangements.
Office Hours: Monday 3:30-5:00 pm or request an appointment via email. Office hours will be held through Google Hangouts: https://meet.google.com/xoe-tvdt-rmp
Textbook: C. Byrd, I. Chen. Canadian Tax Principles, 2019 - 2020 Edition, Prentice Hall Canada Inc., Scarborough, Ontario, 2019. You must use this edition of the text; tax rules in previous editions are outdated.
Course Package: The course package contains notes to be used in class as a basis for lectures. The course package will be posted on eClass.
eClass: You can obtain lecture notes and related materials from eClass at https://eclass.srv.ualberta.ca/
Other than information provided in class, eClass will be where announcements and other information regarding the course will be made. Please plan to check this site regularly and/or make sure your settings in eClass will send you emails when there are updates.
Learning Objectives: This course incorporates the Learning Goals of the BCom Program, in particular critical thinking, teamwork, as well as oral and written communication. This is the second of two courses in federal income tax law designed to achieve the following objectives:
(1) To explain the theoretical concepts behind the specific provisions of the law.
(2) To apply the law in practical and case settings.
(3) To introduce basic tax planning concepts through practical problem application.
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.
Grades in the course will be assigned on the following basis:
Midterm Exam 35%
Final Exam 35%
Class Participation 10%
Current Events Exercise 5%
Group Project 15%
Midterm Exam (35%): The midterm exam will consist of multiple choice questions and short answer questions based on all material covered in the course, including lectures, handouts, and readings. There will be a make-up midterm for those of you who miss the first midterm for any reason whatsoever. You may take either the Midterm Exam, or the Make-Up Midterm Exam, or both. Each Midterm will be cumulative with respect to material covered until that Midterm. If you take both Midterms, the entire 35% will be assigned to the Midterm that you obtain the highest score in. If you miss both, you will lose 35% of your grade. Midterm 1 is tentatively scheduled for Wednesday October 7th at 9:30 am. Midterm 2 is tentatively scheduled for Wednesday November 4th at 9:30 am.
Final Exam (35%): The Final exam is tentatively scheduled for Monday December 14th at 2.00 pm (the University designated date and time for the 468/668 final). The final is cumulative and will cover material from the entire semester.
Class Participation (10%): Making thoughtful comments/suggestions in class, asking probing questions in class, plus honest attempts to answer questions that I ask in class would count as good participation.
Current Events Exercise (5%): The activity will be done in groups of 3 to 5. The project will require you to analyze a contemporary income taxation issue and to present your findings to the class. Specific information on the project will be articulated in class.
Group Project (15%): The project will be done in groups of 3 to 5. The project will require you to complete an in-depth analysis of a complex income taxation issue, integrating across multiple concepts.
Specific information on the project will be articulated in class.
Letter grades will be assigned to the percentage marks in accordance with University Regulations [Section 23.4(4) of the University Calendar]. Grades in this course will be based on a combination of absolute achievement and relative performance. Please note that there is no make-up midterm or final, and no extra credit assignment available beyond that already indicated on the syllabus.
Preparing for Class: You will learn more in each lecture if you read the relevant text material before coming to class. As a general rule, I cover approximately 10 pages of course pack notes per lecture. You can match those to text coverage to determine which text pages to read. For example, the entire chapter on employment income is required reading. If the next 10 pages of course notes address automobile taxable benefits and expenses you can do the text readings from the employment income chapter on those issues to prepare for class. In the event you do not have sufficient time to do the text readings before class, you can still benefit by reading through the next 10 pages of course pack notes, prior to class, so you have a preliminary understanding of what is being covered in that class.
Approach to the Materials: The best way to learn and understand tax law is to apply the rules to problems. Three types of problems are provided in the text: exercises, self-study problems and assignment problems. Solutions to the exercises and self-study problems are included in a solutions manual that comes with the text book. Solutions to relevant assignment problems will be posted on the course web-site (the list of relevant assignment problems will be provided once publisher permission is received). In order to master the material, you should practice all available questions.
Practicing Problems: When practicing problems, you should prepare a complete answer before looking at the solution. You should then review the solution with the objective of identifying key concepts or principles underlying the tax treatment of various items. When the underlying concept or principle is thoroughly understood, the rules in the legislation fit logically in place. The ability to identify an issue and quickly understand the required approach will save valuable time in exams. If you do not practice all of the problems you will not do very well on the exams.
Success on Exams: In order to do well on the exams, you will have to commit a significant amount of time to learning the material. Students who have done well in the past have indicated that they did the following in preparing for exams:
Engaged actively in class by asking probing questions, working on assigned problems with classmates, and volunteering responses to problems that we go over in class
Reviewed all of the lecture notes after class in preparation for the exam
Did all of the textbook readings (Do not summarize the text – there is no time and little benefit to doing so).
Practiced all of the problems including exercises, self study and assignment problems. This includes all textbook exercise, self study and assignment problems and additional problems covered in class.
When reviewing his or her solution to practice problems, made notes of items missed and followed up to determine the correct treatment including identifying why his or her treatment is wrong and the solution treatment is correct.
Students who have spent significant amounts of time summarizing the textbook and have, as a result, run out of time for practicing problems, have not done well on exams.
Exams Remarking Policy: Midterm exams will be returned in class and you will be allowed to keep the exam. Solutions to the midterm exams will be posted on eClass after marked midterm exam papers have been returned. Students should review the marking carefully and bring to my attention any questions about their marks as soon as possible. No remarking requests will be accepted more than one week after the results have been made available. All appeals for remarking must be in writing and the original copy (unless available on-line) must be attached. Exams submitted for appeal may be subject to an entire review. This may result in your grade being lower.
Absences from Exams: Occasionally life events occur that require a student to miss term work, midterm exams, or final exams. However, excused absences are not granted automatically and will be considered only for acceptable reasons such as incapacitating illness, severe domestic affliction, or religious convictions. Unacceptable reasons include, but are not limited to, personal events such as vacations, weddings, or travel arrangements. When a student is absent without an acceptable excuse, a final grade will be computed using a raw score of zero for the work missed. Any student who applies for or obtains an excused absence by making false statements will be liable under the Code of Student Behaviour.
Section 23.3(2) and 23.5.6 (1) of the Calendar provides the University Regulations regarding procedures in the case of a missed final examination.
Academic Integity: Absolute and complete academic honesty is expected of you in this course. It is important for you as a student to behave in an ethical manner. The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect.
Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (online at http://www.governance.ualberta.ca/StudentAppeals.aspx) and avoid any behaviour that could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.
Baloria Schedule (Fall 2020)
Week # Coverage Coursepack PDF
Page #
Important Dates
Aug. 31- Sep. 6 1 Introduction To Course
Sep. 7 – Sep. 13 2 Review of Key Concepts from 467
Taxable income for individuals
Sale of depreciable capital assets
1-15 Labor Day, Monday
Sep. 7, No Class
Sep. 14- Sep. 20 3 Chapter 9 - Other Income, Other Deductions, Other Issues
Related parties, non-arm’s length transactions, attribution
Death of a taxpayer
16-34 Group Names Due,
Wednesday Sep. 16, 6 pm
Sep. 21- Sep. 27 4 Chapter 12 – Taxable Income and Tax Payable for Corporations
Division C deductions
Basic rate and reductions
QSBCS
35-49 57-87 234-246
Sep. 28-Oct. 4 5 Chapter 12 – Taxable Income and Tax Payable for Corporations
Division C deductions
Basic rate and reductions
QSBCS
35-49 57-87 234-246
Oct. 5 – Oct. 11 6 Midterm Exam Midterm 1,
Wednesday Oct. 7, 9:30 am
Oct. 12- Oct. 18 7 Chapter 13 – Taxation of Corporate Investment Income
Integration
RDTOH, Refundable Part 1 and Part IV
88-113 Thanksgiving, Monday Oct.12, No Class
Oct. 19 – Oct. 25 8 Chapter 14 – Other Issues in Corporate Taxation
Acquisition of control
Rules of association
Investment tax credits
Tax basis shareholders’ equity
50-56 114-158
Oct. 26 – Nov. 1 9 Chapter 15 – Corporate Taxation and Management Decisions
Incorporation
Tax reduction and deferral
Income splitting
Management compensation
159-178
Nov. 2 – Nov. 8 10 Midterm Exam Midterm 2,
Wednesday Nov. 4, 9:30 am
Nov. 9 – Nov. 15 11 Fall Reading Week – No Class Remembrance Day,
Wednesday Nov. 11, No Class
Nov. 16 – Nov. 22 12 Chapter 16 – Rollovers Under Section 85
General rules
Transfer prices
PUC of Shares Issued
Other applicable rules
Dividend strips
Estate and internal freezes
179-227 Group Project Initial Report Due,
Wednesday Nov. 18, 6 pm
Nov. 23- Nov. 29 13 Chapter 16 – Rollovers Under Section 85
General rules
Transfer prices
PUC of Shares Issued
Other applicable rules
Dividend strips
Estate and internal freezes
179-227
Nov. 30 – Dec. 6 14 Chapter 17 – Rollovers and Sales of an Incorporated Business
Share for share exchange
Exchange for shares in reorganization
Sale of incorporated business
228-233 247-258
Group Project Final Report Due, Wednesday Dec. 2, 6 pm
Dec. 7 – Dec. 13 15 Final Exam Review
Dec. 14 – Dec. 20 16 Final Exam Final, Monday Dec.
14, 2 pm
