ACT415: Business Taxation SAMPLE - … · ACT415: Business Taxation . Credit Hours: ... Chapter 20...

ACT415: Business Taxation

Credit Hours: 3 Contact Hours: This is a 3-credit course, offered in accelerated format. This means that 16 weeks of

material is covered in 8 weeks. The exact number of hours per week that you can expect to spend on each course will vary based upon the weekly coursework, as well as your study style and preferences. You should plan to spend 14-20 hours per week in each course reading material, interacting on the discussion boards, writing papers, completing projects, and doing research.

Course Description and Outcomes

Course Description: This course examines the tax issues involved with corporate, flow-through, and exempt business entities. Issues related to the development of tax returns for each business entity type are emphasized. The course also covers tax issues related to the gift, estate, and trust wealth transfer vehicles.

Course Overview: This course provides an understanding of the tax issues surrounding corporations, partnerships, estates/trusts, mergers, reorganizations, and dissolutions. Issues related to the development of tax returns for each business entity type are emphasized. The course also covers tax issues related to gift, estate, and trust wealth transfer vehicles. On completion of this course, you should be able to identify the tax situation for any corporation and partnership, as well as to compute corporate and partnership taxes based on those findings.

Course Learning Outcomes:

1. Analyze tax effects of entity formation, reorganization and termination. 2. Calculate business entity income tax, credits, and allocations required for each tax return. 3. Calculate and interpret the tax effects from entity distributions. 4. Demonstrate the filing requirements for specialized tax returns.

Participation & Attendance

Prompt and consistent attendance in your online courses is essential for your success at CSU-Global Campus. Failure to verify your attendance within the first 7 days of this course may result in your withdrawal. If for some reason you would like to drop a course, please contact your advisor.

Online classes have deadlines, assignments, and participation requirements just like on-campus classes. Budget your time carefully and keep an open line of communication with your instructor. If you are having technical problems, problems with your assignments, or other problems that are impeding your progress, let your instructor know as soon as possible. SAMPLE

Course Materials

Textbook Information is located in the CSU-Global Booklist on the Student Portal.

Course Schedule

Due Dates The Academic Week at CSU-Global begins on Monday and ends the following Sunday.

• Discussion Boards: The original post must be completed by Thursday at 11:59 p.m. MT and Peer Responses posted by Sunday 11:59 p.m. MT. Late posts may not be awarded points.

• Opening Exercises: Take the opening exercise before reading each week’s content to see which areas you will need to focus on. You may take these exercises as many times as you need. The opening exercises will not affect your final grade.

• Mastery Exercises: Students may access and retake mastery exercises through the last day of class until they achieve the scores they desire.

• Critical Thinking: Assignments are due Sunday at 11:59 p.m. MT. • Live Classroom: Although participation is not required, four Live Classroom sessions will be held during

Weeks 1, 3, 5, and 7.

Week # Readings Assignments

1

• Chapters 8, 16, 17-1, & 23 in South-Western Federal Taxation 2017 • Discussion (25 points) • Opening Exercise (0 points) • Mastery Exercise (10 points) • Critical Thinking (75 points)

2

• Chapters 17 & 18 in South-Western Federal Taxation 2017 • Discussion (25 points) • Opening Exercise (0 points) • Mastery Exercise (10 points) • Critical Thinking (75 points) • Portfolio Milestone (25

points)

3

• Chapter 19 in South-Western Federal Taxation 2017 • Discussion (25 points) • Opening Exercise (0 points) • Mastery Exercise (10 points) • Critical Thinking (75 points) • Portfolio Milestone (25

points)

4

• Chapter 20 in South-Western Federal Taxation 2017 • Discussion (25 points) • Opening Exercise (0 points) • Mastery Exercise (10 points) • Portfolio Milestone (75

points)

5

• Chapter 21 in South-Western Federal Taxation 2017 • Discussion (25 points) • Opening Exercise (0 points) • Mastery Exercise (10 points) • Critical Thinking (75 points)

6 • Chapters 27 & 28 in South-Western Federal Taxation 2017 • Discussion (25 points) • Opening Exercise (0 points)

SAMPLE

• Mastery Exercise (10 points) • Critical Thinking (70 points)

7

• Chapter 21 & 22 in South-Western Federal Taxation 2017 • Discussion (25 points) • Opening Exercise (0 points) • Mastery Exercise (10 points) • Portfolio Milestone (100

points)

8

• Chapter 23 in South-Western Federal Taxation 2017 • Discussion (25 points) • Opening Exercise (0 points) • Mastery Exercise (10 points) • Portfolio (125 points)

Assignment Details

This course includes the following assignments/projects:

Critical Thinking and Portfolio Assignments

Module 1

CRITICAL THINKING ASSIGNMENT (75 points) Choose one of the following two assignments to complete this week. Do not do both assignments. Identify your assignment choice in the title of your submission.

Option #1: Yard Corporation Yard Corporation, a cash basis taxpayer, received $10,000 from a customer in 2015. In 2015, the customer filed a claim for a refund of the fee. In 2016, Yard refunded the customer $6,000. In 2015, Yard paid $5,000 in estimated state income tax. In May 2016, Yard received a state income tax refund of $2,000 for overpayment of its 2015 income tax. Yard was in the 35% marginal tax bracket in 2015 and in the 15% marginal tax bracket in 2016.

What are the tax effects of the 2016 payment to the customer and the collection of the state income taxes overpaid?

Partner Partnership Interest Tax Year End

Aaron 10% 11/30/2013

Alfred 25% 12/31/2013

Betty 35% 6/30/2013

Curtis 5% 11/30/2013

Derek 15% 6/30/2013

Elroy 10% 12/31/2013

Review the grading rubric in the module folder to understand how you will be assessed on this assignment.

Be sure to use references and format your entire paper according to the CSU-Global Guide to Writing and APA. Reach out to your instructor if you have questions about the assignment.

Option #2: Accounting Period and Methods Compute the least aggregate deferral using the partner information below.

SAMPLE

Requirements: Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that your thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions is permitted. Submit a single MS Excel file for grading.

Review the grading rubric in the module folder to understand how you will be assessed on this assignment. Reach out to your instructor if you have questions about the assignment.

Module 2


Option #1: M-1 and M-2 Calculations

Part I: M-1 Information for an accrual basis corporation

Net income per books (after-tax) $174,100 Federal income tax expense per books $86,600 Tax-exempt interest income $4,500 MACRS depreciation** $7,200 Excess of capital loss over capital gains $9,400 Nondeductible meals and entertainment $5,500 Interest on loan to purchase tax-exempt bonds $1,100

** This is depreciation in excess of straight-line depreciation used for financial statement purposes

Part II: M-2 Information for an accrual basis corporation

Requirements:

Clearly identify the requirements being addressed. Your assignment should consist of a single MS Excel File clearly identifying the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that the thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions.

Review the grading rubric, which can be accessed in the module folder, to understand how you will be assessed on this assignment. Reach out to your instructor if you have questions about the assignment.

Option #2: Capital Gains and Losses for C Corporations

How is the transfer of liabilities in a property transaction generally treated for tax purposes? How is a transfer of liabilities generally treated in a § 351 transaction? What exceptions could arise to this usual treatment in a § 351 setting?

Your assignment should be a paper 2-3 pages long, not including the required title and reference pages. Adhere to the CSU-Global Guide to Writing and APA. Include at least three scholarly sources (you may use the recommended readings) to support your answers. The CSU-Global Library is a good place to find these sources. Remember to use in-text citations as appropriate and to include your sources in your reference page.

Net income per books (after-tax) $386,250 Taxable income $120,000 Federal income tax per books $30,050 Cash dividend distributions $150,000 Unappropriated retained earnings, as of January 1, 2016 $796,010

SAMPLE

PORTFOLIO PROJECT MILESTONE (25 points)

Option #1: Project Selection You have a choice between two Portfolio Projects in this course. Go to the Module 8 folder to read both Portfolio Project descriptions. Select only one project—do not do both projects.

This week, identify your Portfolio Project choice in the title of a Word document and then briefly explain why you selected that project. Review the Portfolio Project Grading Rubric on the Course Information page to understand how you will be graded on the project.

• Format your paper according to the CSU-Global Guide to Writing and APA. • Your description should be between 1/2-1 page in length.

Option #2: Project Selection You have a choice between two Portfolio Projects in this course. Go to the Week 8 Assignments page to read both Portfolio Project descriptions. Select only one project—do not do both projects.

This week, identify your Portfolio Project choice in the title of a Word document and then briefly explain why you selected that project. Review the grading rubric in the module folder to understand how you will be assessed on the project.


Module 3


Option #1: Earnings and Profits

Pebble Corporation, an accrual basis taxpayer, has struggled to survive since its formation, six years ago. As a result, it has a deficit in accumulated E & P at the beginning of the year of $340,000. This year, however, Pebble earned a significant profit; taxable income was $240,000. Consequently, Pebble made two cash distributions to Martha, its sole shareholder: $150,000 on July 1 and $200,000 December 31. The following information might be relevant to determining the tax treatment of the distributions.

• This year’s taxable income included a net operating loss carryover of $50,000.

• The corporation’s Federal income tax liability is $72,000 for the year.

• Pebble paid nondeductible fines and kickbacks of $10,000. The company also paid

nondeductible life insurance premiums of $22,000.

• The cash surrender value of the corporate-owned life insurance policies increased by $11,000 during the year.

• The company sold a piece of equipment during the year and reported a § 1231 gain of

$105,000 and recapture income under § 1245 of $35,000. There were no other § 1231 transactions during the year, but the corporation did have a capital loss carryforward of $30,000.

• MACRS depreciation exceeds E & P depreciation by $14,000. In addition, an election under

§ 179 was made this year for $18,000 of assets.

a. Compute Pebble’s E & P for the year.

SAMPLE

b. What are the tax consequences of the two distributions made during the year to Martha (her stock basis is $74,000)?

Option #2: Cost Recovery

Martin is a sole proprietor of a sandwich business. On March 4, 2016, Martin purchased and placed in service new seven-year class assets costing $560,000. Martin’s business reports taxable income for the year, before any deductions associated with the purchased assets, of $160,000. Martin also received $30,000 of interest income for the year, which is not related to the business. Martin wants his adjusted gross income for the year to be as low as possible.

With this objective in mind, determine how Martin should recover the cost of the acquired assets. Show your calculations and format your paper according to the CSU-Global Guide to Writing and APA.


Option #1: Corporate Tax Return You are to complete the balance sheet information portion of each tax return. Obtain the financial statements from the case of your portfolio option. You will also use the tax return template included under that same option. You must address instructor feedback when submitting this milestone.

Review the Milestone Grading Rubric in the module folder to understand how you will be graded on the project.

Submit the following:

• Form 1120 template with only page 5 (Schedule L) completed. (This form can be found in

Portfolio Project Option 1, located in the Module 8 folder.)

Option #2: Partnership Tax Return You are to complete the balance sheet information portion of each tax return. Obtain the financial statements from the case of your portfolio option. You will also use the tax return template included under that same option. You must address instructor feedback when submitting this milestone with your Portfolio Project during week 8.

Review the grading rubric in the module folder to understand how you will be graded on the project.


• Form 1065 template with only page 5 (Schedule L) completed. (The form can be found in Portfolio Project Option 2 assignment, located in the Module 8 folder.)

Module 4


Option #1: Corporate Tax Return

With no Critical Thinking Assignment due this week, this is your opportunity (and a requirement!) to work on your Portfolio Project, due in Week 8.

Obtain the financial statements and supporting information from your Portfolio Project option, located in the Module 8 folder. You will also use the tax-return template included under that same option. You must address instructor feedback when submitting this Milestone.

Review the grading rubric in this module folder to understand how you will be graded on the project.


SAMPLE

• Form 1120 template with only page 1, page 2 (Schedule C) and page 5 (Schedule L) completed. (This form is in Portfolio Project Option 1, located in the Module 8 folder.)

Option #2: Partnership Tax Return

With no Critical Thinking Assignment due this week, this is your opportunity (and a requirement!) to work on your Portfolio Project, due in Week 8.

Obtain the financial statements and supporting information from your Portfolio option, located in the Module 8 folder. You will also use the tax-return template included under that same option. You must address instructor feedback when submitting this milestone.

Review the grading rubric in the module folder to understand how you will be graded on the project.


• Form 1065 template with only page 1, page 4 (Schedule J), and page 5 (Schedule L) completed. (The form is in Portfolio Project Option 2, located in the Module 8 folder.)

Module 5


Option #1: Partnership Basis

Josh has a 25% capital and profits interest in the calendar-year GDJ Partnership. His adjusted basis for his partnership interest on October 15 of the current year is $300,000. On that date, the partnership liquidates and makes a proportionate distribution of the following assets to Josh.

Partnership’s Basis in Asset Asset’s Fair Market Value

Cash Inventory

$ 70,000 120,000

$ 70,000 150,000

a. Calculate Josh’s recognized gain or loss on the liquidating distribution, if any.

b. How would your answer to #a., above, change if the partnership also distributed a small parcel of land it had held for investment to Josh? Assume the land has a $5,000 adjusted basis (FMV is $8,000) to the partnership.

Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that the thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions. Submit a single MS Excel file for grading.

Option #2: Partnership Income Allocation

In a proportionate liquidating distribution of his 40% interest in the RST LLC, Stuart received cash ($100,000), land (basis of $60,000 and value of $90,000), and unrealized receivables (basis of $0 and value of $40,000). In addition, Stuart is relieved of his $80,000 share of the LLC’s liabilities. Stuart’s basis in RST (including his share of LLC liabilities) was $200,000 immediately prior to this distribution.

a. How much gain or loss does Stuart recognize on this distribution?

b. What is Stuart’s basis in the receivables and land he receives in the distribution?

SAMPLE

Clearly identify the requirements being addressed. Show all calculations within the cells of an Excel spreadsheet. This means that you must use formulas and links so that the thought process can be examined. Make good use of comments to convey your thought process as well. No hard coding of solutions. Submit a single MS Excel file for grading.

Module 6


Option #1: Gift Tax Elements

At the time of his death, Norton was involved in the following transactions.

• Owned land in joint tenancy with Emily. The land is worth $600,000 and was purchased by Norton

15 years ago for $150,000.

• Owned land in a tenancy by the entirety with his wife Amy. The land is worth $800,000 and was purchased by Norton five years ago for $450,000.

• Owned land in an equal tenancy in common with Noah. The land is worth $400,000 and was

purchased by Norton four years ago for $300,000.

• Owned City of Dayton bonds worth $500,000.

What amount is included in Norton’s gross estate? Describe your analysis. Which properties added to the value of his gross estate? Which properties were not included, and why?


Option #2: Estate Tax Elements

Consider the term distributable net income as it is used with respect to the Federal income taxation of trusts and estates. How is this amount computed? Where is it used in computing the parties’ taxable incomes?


Module 7

Portfolio Project Milestone (100 points)

Option #1: Corporate Tax Return

Tax returns collect a great deal of information that is not directly related to the allocation of income or calculation of income tax. In this milestone, you will explore the reasons why some of this information is collected.

Look at the information on Form 1120 Schedule K (the form is located in Portfolio Project Option 1, which is found in the Module 8 folder). With the exception of line 1, discuss the purpose of these questions. (You may select a sub-grouping of these questions to complete your milestone.) What are some challenges (identify three to five), both anticipated and unexpected, when completing the corporate tax return? What solutions can you provide to those challenges?

Requirements:

SAMPLE

While you may include your experiences, please remember to maintain a formal tone and cite scholarly research to support your analysis. Back up your discussion with research from five scholarly sources (you may not use the course textbook to fulfill this requirement).

• Your analysis should be 4-5 pages in length not counting the title and reference pages, which you

must include. • Your Milestone must be formatted according to the CSU-Global Guide to Writing and APA.

Review the Milestone grading rubric, which can be accessed in the module folder, to understand how you will be assessed on this assignment. Reach out to your instructor if you have questions about the assignment.

Option #2: Partnership Tax Return

Tax returns collect a great deal of information that is not directly related to the allocation of income or calculation of income tax. In this milestone, you will explore the reasons why some of this information is collected.

Look at the information on Form 1065 Schedule B (the form is in the Portfolio Project Option 2, located in the Module 8 folder). With the exception of line 1, discuss the purpose of these questions. (You may select a sub-grouping of these questions to complete your milestones.) What are some challenges (identify three to five), both anticipated and unexpected, when completing the partnership tax return? What solutions can you provide to those challenges?

Requirements:

While you may include your experiences, please remember to maintain a formal tone and cite scholarly research to support your analysis. Back up your discussion with research from five scholarly sources (you may not use the course textbook to fulfill this requirement).

• Your analysis should be 4-5 pages in length not counting the title and reference pages, which you

must include. • Your Milestone must be formatted according to the CSU-Global Guide to Writing and APA. • Review the Milestone grading rubric in the module folder.

Reach out to your instructor if you have questions about the assignment.

Module 8

Portfolio Project (125 points)

Option #1: Corporate Tax Returns Because it is important for accountants to demonstrate the filing requirements for specialized tax returns, for this final project you will be completing a partnership tax return and then analyzing this experience.

Key Components:

1. Use the financial data, below, to complete form 1120 (linked in the assignment in the module).

2. Complete the following Student Template that has the respective tax forms and schedules required to complete the return. Complete all the parts of your respective business tax return for which there is information.

ACT415_PortfolioProject_Option1_StudentTemplate.docx (attached in the assignment in the module)

3. In the space at the bottom of the Student Template:

• Show your income tax calculations • Prepare a write-up on:

SAMPLE

a) The purpose of questions on Form 1120 Schedule K with the exception of line 1. (You may select a sub-grouping of these questions to complete your milestone.)

b) Some challenges (identify three to five), both anticipated and unexpected, when completing the corporate tax return.

c) Solutions you can provide to those challenges.

Requirements:

• Submit 1) your tax return template, 2) Income tax calculations, and 3) your write-up about the tax return questions to the drop box identified for that submission.

• Format your submission according to the CSU-Global Guide to Writing and APA Requirements. Note: the Submission box does not accept fillable pdf's. Use the File-->Print-->Print to PDF, to save the pdf as this will allow all information to come through.

• Review the grading rubric in the module folder to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

BADEC Partnership 12/31/2016

Assets

Cash $ 485,600 Computer $ 7,000

AccDep-Computer $ (1,745) Furniture $ 3,000 AccDep-Furniture $ (321)

Land $ 50,000

Total Assets $ 543,534 Liabilities

Equity

Retained Earnings $ 53,534 Stock-Anderson $ 50,000 Stock-Bacon $ 150,000 Stock-Cox $ 100,000

Stock-Day $ 50,000 Stock-Elders $ 40,000 Stock-Fawcett $ 80,000

Stock-Gonzalez $ 20,000

Total Liabilities plus Equity $ 543,534

Option #2: Partnership Tax Returns Because it is important for accountants to demonstrate the filing requirements for specialized tax returns, for this final project you will be completing a partnership tax return and then analyzing this experience.

Key Component:

1. Use the financial data from below to complete Form 1065 (linked in the assignment in the module).

2. Complete the following Student Template that has the respective tax forms and schedules required to complete the return. Complete all the parts of your respective business tax return for which there is information. ACT415_Portfolio_Option2_StudentTemplate.docx - attached in the assignment in the module.

3. In the space at the bottom of the template, prepare a write-up on:

SAMPLE

• The purpose of some questions on Form 1065 Schedule B with the exception of line 1. (You may select a sub-grouping of these questions to complete your milestone.)

• The challenges (identify three to five) your faced, both anticipated and unexpected, when completing the partnership tax return.

• Solutions you can provide to those challenges.

Requirements: • Submit 1) your tax return template, and 2) your write-up about the tax return questions to the

drop box identified for that submission. Note: Save the .docx file as a .pdf when submitting so that all information will be viewable.

• Your paper must be formatted according to the CSU-Global Guide to Writing and APA Requirements.

• Review the grading rubric to understand how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.

BADEC Partnership

12/31/2016

Assets

Cash $ 485,600 Computer $ 7,000

AccDep-Computer $ (1,745) Furniture $ 3,000 AccDep-Furniture $ (321)

Land $ 50,000

Total Assets $ 543,534 Liabilities

Equity

Capital-Anderson $ 57,299 Capital-Bacon $ 171,898 Capital-Cox $ 114,599

Capital-Day $ 57,299 Capital-Elders $ 40,840 Capital-Fawcett $ 85,679

Capital-Gonzalez $ 15,920

Total Liabilities plus Equity $ 543,534

Course Policies

Course Grading

20% Discussion Participation 0% Opening Exercises 0% Live Classroom 8% Mastery Exercises 37% Critical Thinking Assignments 35% Final Portfolio Paper

Grading Scale and Policies A 95.0 – 100

A- 90.0 – 94.9

B+ 86.7 – 89.9

B 83.3 – 86.6

B- 80.0 – 83.2

SAMPLE

C+ 75.0 – 79.9

C 70.0 – 74.9

D 60.0 – 69.9

F 59.9 or below

In-Classroom Policies For information on late work and incomplete grade policies, please refer to our In-Classroom Student Policies and Guidelines or the Academic Catalog for comprehensive documentation of CSU-Global institutional policies.

Academic Integrity Students must assume responsibility for maintaining honesty in all work submitted for credit and in any other work designated by the instructor of the course. Academic dishonesty includes cheating, fabrication, facilitating academic dishonesty, plagiarism, reusing /re-purposing your own work (see CSU-Global Guide to Writing and APA Requirements for percentage of repurposed work that can be used in an assignment), unauthorized possession of academic materials, and unauthorized collaboration. The CSU-Global Library provides information on how students can avoid plagiarism by understanding what it is and how to use the Library and Internet resources.

Citing Sources with APA Style All students are expected to follow the CSU-Global Guide to Writing and APA Requirements when citing in APA (based on the APA Style Manual, 6th edition) for all assignments. For details on CSU-Global APA style, please review the APA resources within the CSU-Global Library under the “APA Guide & Resources” link. A link to this document should also be provided within most assignment descriptions in your course.

Disability Services Statement CSU–Global is committed to providing reasonable accommodations for all persons with disabilities. Any student with a documented disability requesting academic accommodations should contact the Disability Resource Coordinator at 720-279-0650 and/or email [email protected] for additional information to coordinate reasonable accommodations for students with documented disabilities.

Netiquette Respect the diversity of opinions among the instructor and classmates and engage with them in a courteous, respectful, and professional manner. All posts and classroom communication must be conducted in accordance with the student code of conduct. Think before you push the Send button. Did you say just what you meant? How will the person on the other end read the words?

Maintain an environment free of harassment, stalking, threats, abuse, insults or humiliation toward the instructor and classmates. This includes, but is not limited to, demeaning written or oral comments of an ethnic, religious, age, disability, sexist (or sexual orientation), or racist nature; and the unwanted sexual advances or intimidations by email, or on discussion boards and other postings within or connected to the online classroom.

If you have concerns about something that has been said, please let your instructor know. SAMPLE

http://portal.csuglobal.edu/document/ACPOLICIES

http://portal.csuglobal.edu/document/ACPOLICIES

mailto:[email protected]

ACT415: Business Taxation SAMPLE - … · ACT415: Business Taxation . Credit Hours: ... Chapter 20...

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Transcript of ACT415: Business Taxation SAMPLE - … · ACT415: Business Taxation . Credit Hours: ... Chapter 20...