Course Name (short): Advanced Taxation
School: Business
Program(s): Bach Bus Admin Market Manage, Bach Business Admin Accounting, Bach Business Admin Finance, Bach Human Resources, BachBus Admin Spply Chain Mgmt
Program Coordinator(s): Tba
Course Leader or Contact: Tba
Originator: Lynn Easson-Irvine
Designate: Jessica MacDougall
Version: 1.01
Status: Approved (APPR)

Calendar Description
Students examine advanced aspects of tax law which serves to strengthen their tax planning and problem solving skills within the framework of professional practice.

Typical Instructional Format

Courses may be offered in other formats.

Section I Notes: This course will be delivered in hybrid format.

Detailed Description
Students examine advanced aspects of tax law which serves to strengthen their tax planning and problem solving skills within the framework of professional practice. The key areas covered in this course include the calculation of taxable income and taxes payable for corporations (Public, Private, Canadian Controlled Private Corporations), shareholder benefits and tax planning, corporate distributions / wind-ups / sale of assets and shares, rollover on transfers to a corporation & related pitfalls, corporate reorganizations and other rollover provisions used in estate planning, taxation of partnerships and trusts. A combination of interactive lectures, classroom problem solving activities and case studies are employed to facilitate student learning.

Program Context

 Critical Performance
By the end of this course, students will have demonstrated the ability
to assess and deal capably with various tax compliance and planning
situations related to corporations, individuals, partnerships and trusts.

Learning Outcomes
To achieve the critical performance, students will have demonstrated
the ability to:
1.  Compute taxable income and taxes payable for public, private and 
    Canadian Controlled Private Corporations (CCPCs).
2.  Evaluate the advantages and disadvantages of incorporating both 
    business and investment income in a private corporation.
3.  Evaluate alternative methods whereby a shareholder-manager is 
    remunerated by a private corporation.
4.  Determine the tax consequences of specific transactions involving 
    shareholder loans, shareholder appropriations and sale of 
    Qualifying Small Business Corporation shares.
5.  Describe the various rights and obligations of taxpayers and the 
    Canada Revenue Agency under the Income Tax Act.
6.  Compare the after-tax effects of selling assets versus shares on 
    the disposition of an incorporated business.
7.  Identify the tax effects of various corporate distributions and 
    the winding-up of a corporation.
8.  Illustrate the tax effective transfer of assets to a corporation 
    under s85(1), giving appropriate consideration to various 
    pitfalls.
9.  Outline various rollover provisions available under the Income 
    Tax Act and under what circumstances they would apply or could be 
    elected.
10. Describe the nature of partnerships and trusts, various types of 
    trusts and their uses in tax planning.
11. Compute taxable income of partnerships, the impact on taxable 
    income of a partner and the adjusted cost base of a partnership 
    interest.
12. Demonstrate professional behaviors including: 
    a. meet due dates
    b. produce professional quality assignments
    c. use reference materials responsibly

In-class activities 3 x 5%       15%
Assignments 2 x 10%              20%
Midterm Exam                     30%
Comprehensive Final Exam         35%
                                100%

Assignments are to be completed in small groups.  All other
evaluations are on an individual basis.

In addition to achieving a minimum 50% overall grade, a student must
have a combined average of at least 50% on the individual supervised
test(s) and exam(s) in order to receive credit for this course.

Textbook(s): 
Beam, R.E., Laiken, S.N., & Barnett, J.J. (2014-2015). Introduction to
Federal Income Taxation in Canada, 2014-2015, 35th Edition. CCH
Canadian Limited: Toronto.

Canadian Income Tax Act with Regulations, Annotated, 98th Edition,
2014 Autumn. CCH Canadian Limited: Toronto.

Description:
Note: Learning Outcome #12 is inherent in each unit throughout the course.

Module 1: Computation of Taxable Income and Taxes Payable for Corporations
1. Computation of taxable income for a corporation
2. Computation of taxable income deductions
   a. Donations
   b. Loss carry-overs
   c. Dividends, etc
3. Basic computation of tax for all corporations
4. Tax deductions and credits
   a. General tax reduction 
   b. Small business deduction
   c. Political contributions credit
   d. Foreign tax credit
Learning Outcome: 1

Module 2: Integration of Business & Investment Income of Private
Corporations
1. The Concept of Integration under the ITA
2. Income from an Active Business of a CCPC
   a. Non-arm's length and related persons
   b. Associated or connected corporations
   c. Affiliated persons
   d. Personal services business
3. Income from Investments of a CCPC
   a. Refundable Dividend Tax on hand (RDTOH)
   b. Refundable Portion of Part 1 Tax
   c. Part IV tax on portfolio and other dividends
   d. Dividend refund
Learning Outcome: 1, 2 
Assessment: Assignment #1 (10%)

Module 3: Rights and Obligations under the Income Tax Act
1. Filing deadlines and requirements for Corporations
2. Notice of assessment, interest, penalties, failures and omission
3. Objections to assessments and appeal process
Learning Outcome: 5
Assessment:  In-class Activity #1 (5%)

Mid-term Exam - Module 1 - 3 (30%)

Module 4: Tax Planning for Private Corporations and
Shareholder-Manager Remuneration
1. Incorporation and Employment Remuneration
2. Owner/Manager Employment Income versus Dividends
3. Shareholder and employee benefits and loans
   a. Deemed interest paid
4. Use of holding companies
5. Tax on split income (kiddie tax)
6. General anti-avoidance rule
Learning Outcome: 2, 3, 4
Assessment:  In-class Activity #2 (5%)

Module 5: Corporate Distributions, Wind-ups, Sale of Assets vs Shares
1. Corporate Surplus Balances
2. Use of Corporate Surplus Balance
3. Winding up of a Canadian Corporation
4. Sale of an Incorporated Business
Learning Outcome: 6, 7 
Assessment:  Assignment #2 (10%)

Module 6: Income Deferral - Rollovers on Transfers to a Corporation
1. Transfer of property to a Corporation by a Shareholder
   a. Small business share rollover
2. Transfer of Shares
Learning Outcome: 8, 9 

Module 7: Income Deferral - Other Rollovers
1. Rollovers involving Corporations and their shareholders
2. Rollovers involving Shares or Corporate Securities
3. Use of rollovers in Estate Freezes
Learning Outcome: 9 
Assessment:  In-class Activity #3 (5%)

Module 8: Partnerships and Trusts
1. The nature of Partnerships
   a. Transactions between a partnership and its partners
   b. Partnership versus joint venture
2. Limited partnership-at-risk rules
3. Partnership interest
   a. Transfer of property to partnership
   b. Admission or withdrawal of a partner
   c. Termination of a partnership
   d. Flow-through of partnership income to a corporate partner
   e. Allocation of income/loss from a partnership to be recorded on 
      an individuals' tax return
4. Nature and types of trusts (inter vivos and testamentary trusts)
5. Settlement of a Trust
6. Computation of Income of a Trust
   a. Income payable to beneficiaries
   b. Attribution and tax on split income (kiddie tax)
7. Computation of Tax for Trusts
8. Impact of distributions from trusts to beneficiaries
   a. Family planning uses of a Trust
Learning Outcome: 9, 10, 11 

Final Exam - Comprehensive Module 1 - 8 (35%)