Course Name (short): Taxation 2
School: All Sheridan Schools
Program(s): Business Admin Accounting
Program Coordinator(s): Sally Mitzel
Course Leader or Contact: Peter Lade
Originator: Lesley Rumsby
Designate: Lesley Rumsby
Version: 16.0
Status: Approved - Under Rev (AREV)

Calendar Description
Tax 1 and Tax 2 provide an extensive introduction to both personal and corporate federal income taxation in Canada. This course is a continuation of Tax 1. Topics covered in Tax 2 include capital gains/losses, other income and deductions, computation of Division B and taxable income for individuals and corporations, computation of taxes payable for individuals and corporations.

Typical Instructional Format

Courses may be offered in other formats.

Section I Notes: A minimum "B" grade is required in both courses, ACCG34780 and ACCG30699, to qualify for partial course exemption towards the CGA course of study. The CGA challenge exam for CGA Taxation 1 is required. This course is taught in a mobile computing environment.

Detailed Description
This course is a continuation of the study of federal income taxation in Canada started in Taxation 1. The study of sources of net income continues with the examination of capital gains and losses and the treatment of miscellaneous sources of income and deductions. After determining taxable income, students explore various personal tax credits in order to calculate individual taxes payable. The study of Corporate income tax is introduced and students learn to analyze the corporation and its activities, to determine the optimal tax deductions (or tax credits) to minimize corporate taxes payable.

Program Context

 Critical Performance
By the end of this course, students will have demonstrated the 
ability to evaluate the personal and corporate tax consequences 
of various situations and to compute taxable income and taxes payable 
for individuals and corporations, using the Income Tax Act and other 
reference material.
   
Learning Outcomes
To achieve the critical performance, students will have demonstrated 
the ability to:
 
1. Classify various types of capital property and apply the specific 
   provisions for the taxation of capital gains or losses.
2. Identify miscellaneous receipts which are required to be included
   in income.
3. Assess whether particular expenditures are deductible as other 
   deductions and calculate the amount of the deduction.
4. Examine the potential Division C deductions and calculate taxable  
   income for individuals according to the ordering rules in  
   Division  C.
5. Compute the minimum amount of federal tax payable for individuals 
   by optimizing personal tax credit claims.
6. Prepare a schedule of net income for tax purposes for a 
   corporation.
7. Identify and calculate any potential deductions from net income 
   for tax purposes in the computation of taxable income for a 
   corporation.
8. Apply the general rate of tax for all corporations and assess 
   whether the corporation qualifies for any deductions from Part 1   
   tax (tax credits).  
9. Calculate the federal tax abatement, the general rate reduction
   and the foreign tax credits (as applicable).
10.Demonstrate the concept of integration.
11.Identify active business income and calculate the small business
   deduction.
12.Ascertain the appropriate tax treatment for investment income of
   private corporation's and calculate the related refundable taxes.

Assignments and/or group work          20%
Midterm Exam                           40%
Final Exam - Comprehensive             40%
Total                                 100%

Textbooks and Instructional Materials

R.E. Beam and S.N.Laiken,Introduction to Federal Income Taxation in 
Canada,34th Edition, 2013-2014. CCH Canadian Ltd.

Canadian Income Tax Act, CCH Canadian Ltd, 96th  Edition.  

(students are allowed to bring the "Act" into tests and examinations)

(Co-op classes will continue to use the textbook acquired for 
Taxation 1)

Module 1

- Classify various types of capital property and apply the specific 
  provisions for the taxation of capital gains or losses as they  
  affect individuals. 

- Calculate capital gain reserves. 

Text Reference - Chapter 7, Chapter 8 (see 40(a) capital gain 
reserves provision only).


Module 2 

- Identify miscellaneous receipts which are required to be included 
  in income including pensions, retiring allowance, support payments,
  scholarships and bursaries.  

- Assess whether particular expenditures are deductible as other 
  deductions and calculate the amount of the deduction, specifically 
  RRSP's, moving expenses, childcare expenses and the disability 
  support deduction.

Text Reference - Chapter 9

Module 3

- Examine the potential Division C deductions and calculate taxable  
  income for individuals according to the ordering rules in 
  Division C.

Text Reference - Chapter 10

Module 4

- Compute the minimum amount of federal tax payable for individuals 
  by optimizing personal tax credit claims.

Text Reference -  Chapter 10

Mid-term Exam (Taxation of Individuals) Modules 1-4

Module 5

- Prepare a schedule of net income for tax purposes for a 
  corporation.

Text Reference - Chapter 11

Module 6

- Identify and calculate any potential deductions from net income 
  for tax purposes in the computation of taxable income for a 
  corporation. 

- Apply the general rate of tax for all corporations and 
  assess whether the corporation qualifies for any deductions from  
  Part 1 tax (tax credits). 

- Determine which activities constitute 
  manufacturing and processing and calculate the appropriate   
  deduction from tax. (tax credit)

Text Reference - Chapter 11

Module 7

- Demonstrate the concept of integration. 

- Determine how the small business deduction helps to achieve
  integration of business income.

- Identify active business income and calculate the small business 
  deduction. 

- Explain the rules for association.

Text Reference - Chapter 12

Module 8

- Ascertain the appropriate tax treatment for investment income of 
  private corporation's and calculate any refundable taxes. 

- Explain the advantages and disadvantages of incorporating sources 
  of business income and sources of investment income. 

Text Reference - Chapter 12

Final Exam (Comprehensive)