ACCG53329
Taxation
Sheridan
 
  I: Administrative Information   II: Course Details   III: Topical Outline(s)  Printable Version
 
Section I: Administrative Information
  Total hours: 56.0
Credit Value: 4.0
Credit Value Notes: N/A
Effective: Winter 2021
Prerequisites: ACCG53855
Corequisites: N/A
Equivalents: N/A
Pre/Co/Equiv Notes: N/A

Program(s): Professional Accounting Grad
Program Coordinator(s): Lorraine Alyea
Course Leader or Contact: Humayun Chaudhary
Version: 20210118_00
Status: Approved (APPR)

Section I Notes: Allowable calculator: Texas Instruments BAII Plus.

 
 
Section II: Course Details

Detailed Description
Students examine Canadian federal income tax legislation to determine income and taxes payable for individuals and corporations. Students develop the techniques and skills required to apply this tax knowledge to various situations. Topics include: liability for tax; income from employment, business, property, other income and capital gains; taxable income and taxes payable; and the rights and obligations of taxpayers. Students learn through interactive lectures, computer exercises, case studies, and classroom activities.

Program Context

 
Professional Accounting Grad Program Coordinator(s): Lorraine Alyea
This course is a required course in the Professional Accounting Ontario College Graduate Certificate.


Course Critical Performance and Learning Outcomes

  Critical Performance:
By the end of this course students will have demonstrated the ability to analyze the tax implications of various situations, using the Income Tax Act and other Canadian reference materials.
 
Learning Outcomes:

To achieve the critical performance, students will have demonstrated the ability to:

  1. Determine the residency status of an individual and the resulting potential liability for federal income tax.
  2. Distinguish between business income, property income and capital gains.
  3. Specify the tax treatment of income and expenses from various sources.
  4. Prepare a capital cost allowance and eligible capital property schedule according to the capital cost allowance regulations in preparation for annual tax filing.
  5. Calculate net income for tax purposes.
  6. Compute taxable income utilizing deductions from net income for tax purposes.
  7. Compute taxable income and taxes payable for public, private and Canadian controlled private corporations.
  8. Identify the tax effects of various corporate distributions and the winding-up of a corporation.
  9. Analyze GHT/HST obligations and calculate net tax for an individual.
  10. Formulate sound financial recommendations using research derived from the Income Tax Act and Bulletins, Circulars and Rulings from Canada Revenue Agency.

Evaluation Plan
Students demonstrate their learning in the following ways:

 Evaluation Plan: IN-CLASS & ONLINE INSTRUCTION
 Assignments / Research20.0%
 Quizzes20.0%
 Midterm Exam25.0%
 Final Exam Comprehensive35.0%
Total100.0%

Evaluation Notes and Academic Missed Work Procedure:
In addition to achieving a minimum 50% overall grade, a student must achieve a grade of at least 50% on the final comprehensive exam in order to receive credit for this course.

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


 

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 & Online Instruction
Professor: N/A
Resource(s):
 TypeDescription
RequiredTextbookIntroduction to Federal Income Taxation in Canada, Beam, Laiken, Barnett, Wolters Kluwer, 41, 2020, 2020-2021 with Study Guide.
RequiredOtherCanadian Income Tax Act with Regulations, available through Sheridan Library access
OptionalOtherRecommended Reading: Bulletins, Circulars and Rulings at http://www.cra-arc.gc.ca/

Applicable student group(s): Professional Accounting Ontario College Graduate Certificate
Course Details:

Note: Learning Outcome #10 is inherent in each unit throughout the course.

Module 1: General Income Tax Concepts

  1. History and objectives of Canadian tax system
  2. Structure and interpretation of the Income Tax Act
  3. Income tax research and reference materials
  4. Tax evasion, tax avoidance and tax planning
  5. The use of data analytics
  6. Reporting systems and data requirements for tax compliance
  7. Legal forms and structures: Sole proprietorship, corporation, partnership, trust
  8. Computation of net and taxable income
  9. Taxation of various types of income
  10. How and why tax legislation exists; various revenue sources; responsibilities of taxpayers, their advisors, and CRA
  11. Individual and corporate residency
  • Full year, part-year and deemed residents
  • Purpose of tax treaties
  • Compliance requirements
  • Deemed acquisition/disposition rules
  • Availability of elections

Chapter(s): 1, 2
Learning Outcomes: 1, 2, 5

Module 2: General principles of income from office or employment

  1. Employed versus self-employed status
  2. Common employment taxable benefits (automobiles, allowances and reimbursements, 6(1)(a) exclusions, group plans, stock options)
  3. Common employment income deductions (legal expenses, sales expenses, automobiles, meals, dues, home office)

Chapter(s): 3
Learning Outcomes: 2, 3, 5
Assessment: Quiz – 1 (2%)

Module 3: Income or loss from a business

  1. Types of income-business income, property income, capital gains
  2. General principles of income from business
  3. Common Schedule 1 adjustments including inclusions and deductions
  4. Reconciliation schedule

Chapter(s): 4
Learning Outcomes: 2, 3, 5
Assessment: Quiz – 2 (2%)

Module 4: Capital cost allowance system for depreciable property including intangibles

  1. General principles and definitions related to CCA (UCC, recapture, terminal loss)
  2. Acquisition and disposition of depreciable capital property
  3. Common CCA classes
  4. Separate CCA classes
  5. Replacement property
  6. Change in use
  7. Inducement payments
  8. Available for use
  9. Short taxation year

Chapter(s): 5
Learning Outcomes: 3, 4, 5
Assessment: Quiz – 3 (2%)
Assessment: Assignment / Research (10%)

Module 5: Income or loss from property

  1. General principles of income from property
  2. Dividends (eligible, non-eligible, capital)
  3. Indirect payments
  4. Interest free / low interest loans
  5. Integration concept
  6. Basic stakeholder relationships (affiliated, non-arm's length, related)
  7. Attribution (spouses and children)
  8. Existence and purpose of GAAR and anti-avoidance provisions
  9. Income splitting opportunities with family members
  10. Tax on split income

Chapter(s): 6
Learning Outcomes: 2, 3, 5
Assessment: Quiz – 4 (2%)

MIDTERM EXAMINATION (Modules 1-5) 25%

Module 6: 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: 2, 3,5
Assessment: Quiz – 5 (2%)

Module 7: 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, 5

Module 8: Taxable income and taxes payable for individuals

  1. Computation of taxable income
  2. Taxable income adjustments
  • Loss carry overs
  • Capital Gains Deduction - availability, limits, basic computations
  • Stock option deductions
  1. Elements of taxes payable
  • Graduated tax rates
  • Refundable tax credits
  • Non-refundable tax credits including
  • charitable donations
  • Alternative minimum tax –purpose and when it applies
  • Dividend tax credit (eligible and non)
  • Foreign tax credits
  • Political tax credits
  • OAS claw back

Chapter(s): 10
Learning Outcomes: 3, 5, 6
Assessment: Quiz – 6 (2%)

Module 9: Computation of Taxable Income and Taxes Payable for Corporations

  1. Corporate types (private, CCPC, public)
  2. Computation of taxable income for a corporation
  3. Computation of taxable income deductions
  • Donations
  • Loss carry-overs
  • Dividends
  1. Acquisition of control issues:
  • Deemed taxation year with tax return
  • Automatic recognition of accrued losses
  • Election to recognize accrued gains
  1. Tax deductions and credits
  • General tax reduction
  • Provincial abatement
  • M&P and SRED credits
  • Foreign tax credit

Chapter(s): 11

Learning Outcomes: 2, 3, 5, 6, 7
Assessment: Quiz – 7 (2%)
Assessment: Assignment / Research (10%)

Module 10: 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: 2, 3, 5, 6, 7
Assessment: Quiz – 8 (2%)

Module 11: Tax Planning for Private Corporations and Shareholder-Manager Remuneration

  1. Employment income vs. dividends
  2. Shareholder loans
  3. Alternative compensation options – stock options, bonuses, fringe benefits
  4. Tax implications of dividends
  • Capital dividends
  • Eligible and non-eligible dividends
  1. Tax on split income
  2. General anti-avoidance rule
  3. Paid-up Capital vs. Adjusted Cost Base
  4. Sale of an Incorporated Business
  5. Corporate income effect on sale of assets
  6. Corporate tax payable on sale of assets
  7. Vendor Shareholder tax payable on distribution
  8. Calculation of taxable capital gain on share sale
  9. Calculation of capital gains deduction
  10. Vendor Shareholder tax payable
  11. Corporate Surplus Balances
  12. Use of Corporate Surplus Balance
  13. Capital Dividends

Chapter(s): 13, 15
Learning Outcome: 2, 5, 6, 7, 8
Assessment: Quiz – 9 (2%)

Module 12: 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 3, 5, 6

Module 13: General GST/HST Concepts

  1. GST system in Canada
  2. Basics of GST –key definitions
  3. Legislative framework –Regulations, legislation
  4. Entities subject to different rules
  5. GST obligations –collection and remittance
  6. GST calculations
  7. GST treatment for specific items (bad debts, allowances, reimbursements, volume rebates, club dues, meals &entertainment)
  8. GST Administration
  • Basic compliance requirements
  • Filing deadlines for returns and objections
  • Retention of books and records
  • Directors' liability
  • Instalments and final GST payments
  • Deadlines for instalments and final GST payments
  • Interest and penalties for late filed returns and payments
  1. GST Implications from Tax Planning for Shareholders and a Closely Held Corporation

Chapter(s): 21
Learning Outcomes: 9
Assessment: Quiz – 10 (2%)

 

FINAL EXAMINATION (CUMUMULATIVE) –35%



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