ACCG30699
Taxation 1B
Sheridan
 
  I: Administrative Information   II: Course Details   III: Topical Outline(s)  Printable Version
 
Section I: Administrative Information
  Total hours: 42.0
Credit Value: 3.0
Credit Value Notes: N/A
Effective: Winter 2021
Prerequisites: ACCG34780
Corequisites: N/A
Equivalents: N/A
Pre/Co/Equiv Notes: N/A

Program(s): Business Admin. Accounting
Program Coordinator(s): Jennifer Peterson
Course Leader or Contact: Humayun Chaudhary
Version: 20210118_01
Status: Approved (APPR)

Section I Notes: This course is taught in a mobile computing environment.

 
 
Section II: Course Details

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

 
Business Admin. Accounting Program Coordinator(s): Jennifer Peterson
This course is a core component of the third year of the Accounting Program.


Course Critical Performance and Learning Outcomes

  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.
  13. Interpret compliance regulations in order to minimize a taxpayer's exposure to interest and penalties.

Evaluation Plan
Students demonstrate their learning in the following ways:

 Evaluation Plan: IN-CLASS
 Quizzes (6x5%)30.0%
 Homework Assignments (5X2%)10.0%
 Midterm Exam25.0%
 Final Exam Comprehensive35.0%
Total100.0%

Evaluation Notes and Academic Missed Work Procedure:

Provincial Context
The course meets the following Ministry of Colleges and Universities requirements:


 

Essential Employability Skills
Essential Employability Skills emphasized in the course:

  • Communication Skills - Communicate clearly, concisely and correctly in the written, spoken, visual form that fulfills the purpose and meets the needs of the audience.
  • Communication Skills - Respond to written, spoken, or visual messages in a manner that ensures effective communication.
  • Numeracy - Execute mathematical operations accurately.
  • Critical Thinking & Problem Solving Skills - Use a variety of thinking skills to anticipate and solve problems.
  • Critical Thinking & Problem Solving - Apply a systematic approach to solve problems.

Prior Learning Assessment and Recognition
PLAR Contact (if course is PLAR-eligible) - Office of the Registrar

  • Not Eligible for PLAR

 
 
Section III: Topical Outline
Some details of this outline may change as a result of circumstances such as weather cancellations, College and student activities, and class timetabling.
Instruction Mode: In-Class
Professor: Multiple Professors
Resource(s):
 TypeDescription
RequiredTextbookIntroduction to Federal Income Taxation in Canada, Beam, Laiken, Barnett (Wolters Kluwer), 41st Edition, 2020-2021 with Study Guide
RequiredOtherCanadian Income Tax Act with Regulations, available through Sheridan Library access

Applicable student group(s): Business Administration - Third Year Accounting
Course Details:

Module 1: Capital gains and capital losses

  1. History, general rules, definitions and computation
  2. Personal-use and listed personal property
  3. Principal residence
  4. Dispositions of land and building
  5. Adjusted cost base
  6. Proceeds of disposition
  7. Capital gains/losses
  8. Identical property
  9. Inadequate consideration
  10. Business investment loss
  11. Capital gains reserve
  12. Non-arm’s length transactions and attribution rules

Chapter(s): 7, 8

Learning Outcomes:1

Assessment: Quiz 1 (5%), Homework Assignment (2%)

 

Module 2: Income from other sources and other deductions

  1. Other income and deductions (retiring allowances, support payments received and paid, pension income, moving expenses, childcare expenses, RRSPs)
  2. Tax deferral and saving opportunities with e.g. RRSPs, RRIFs, TFSA’s
  3. Amounts not included in computing income
  4. Net income for tax purposes

Chapter(s): 9

Learning Outcomes: 2,3

Assessment: Quiz 2 (5%), Homework Assignment (2%)

 

Module 3: Taxable income and taxes payable for individuals

  1. Computation of taxable income
  2. Taxable income adjustments
  3. Loss carry overs
  4. Capital Gains Deduction - availability, limits, basic computations
  5. Stock option deductions
  6. Elements of taxes payable
  7. Graduated tax rates
  8. Refundable tax credits
  9. Non-refundable tax credits including
  10. Charitable donations
  11. Alternative minimum tax – purpose and when it applies
  12. Dividend tax credit (eligible and non-eligible)
  13. Foreign tax credits
  14. Political tax credits
  15. OAS clawback

Chapter(s): 10

Learning Outcomes: 4,5

Assessment: Quiz 3 (5%), Homework Assignment (2%)

 

MID-TERM EXAM 25% (Modules 1-3)

 

Module 4: Computation of Taxable Income and Taxes Payable for Corporations

  1. Corporate types (private, CCPC, public)
  2. General principles of income from business
  3. Common Schedule 1 adjustments including inclusions and deductions
  4. Computation of taxable income for a corporation
  5. Computation of taxable income deductions (Donations, Loss carry-overs and  Dividends)
  6. Acquisition of control issues (Deemed taxation year with tax return, automatic recognition of accrued losses, election to recognize accrued gains)
  7. Tax deductions and credits (general tax reduction, Provincial abatement, M&P and SRED credits, Foreign tax credit)

Chapter(s): 11

Learning Outcomes: 6,7,8,9

Assessment: Quiz 4 (5%), Homework Assignment (2%)

 

Module 5: Integration of Business & Investment Income of Private Corporations

  1. The Concept of Integration under the ITA
  2. Business and property income (Active business income, aggregate investment income, specified investment business income, eligible and non-eligible dividends)
  3. Personal services business income
  4. Small business deduction
  5. General rate reduction
  6. Additional tax on personal services business income
  7. RDTOH
  8. Refundable Part 1
  9. Part IV
  10. Dividend refund
  11. Basic stakeholder relationships (affiliated, associated, connected, non-arm’s length, related)

Chapter(s): 12

Learning Outcomes: 10,11,12

Assessment: Quiz 5 (5%), Homework Assignment (2%)

 

Module 6: Income Tax Compliance

  1. Basic compliance requirements (e.g. T1, T2, T4, T5)
  2. Filing deadlines for income tax returns and objections
  3. Retention of books and records
  4. Directors liability
  5. Instalments and final tax payments
  6. Deadlines for instalments and final tax payments
  7. Interest and penalties
  8. Preparer penalties

Chapter(s): 14

Learning Outcomes: 13

Assessment: Quiz 6 (5%)

 

FINAL CUMULATIVE EXAM 35% (Modules 1-6)



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