ACCT 530G

Business Taxation

4 Graduate credits
Effective December 10, 1998 – Present

Graduation requirements this course fulfills

This course focuses on identifying issues that affect the taxation of businesses. Four modules are covered: foundation of taxation, including types of taxes, structure of the income tax, taxpayers, and general concepts of income and deduction; business income and expenses; taxation of property transactions; and overview of corporations, S corporations, partnerships, and entity choice. Planning options are emphasized.

Prerequisites

Learning outcomes

General

  • Understand the basics of tax research.
  • Understand the importance of cash flow in doing tax analysis and how it works.
  • Understand why we have taxes.
  • Differentiate between a trade or business activity, investment activity and a personal activity and why this is important.
  • Explain what is income.
  • Explain why indirect benefits are income and when they are taxable.
  • Identify a primary source of tax law.
  • Identify which items of income and deduction are likely to produce book/tax differences.
  • Understand the basics of tax jurisdiction and the various courts.
  • Identify what is the amount of recognized gain or loss from disposition?
  • Identify what is the basis of the property to the corporation?
  • Identify what is the basis of the stock to the shareholder?
  • Identify what is the character or type of gain or loss recognized?
  • Identify what is(are) the appropriate entity(ies) to use in certain business situations?
  • Identify when a cash basis taxpayer can take a deduction.
  • Identify when gain or loss is recognized?
  • Identify when loss deductions can be taken.
  • Identify which accounting methods are permitted and appropriate for various businesses.
  • Identify which business expenses are likely to produce book/tax differences.
  • Identify which retirement plan is available for a specified source of income.
  • Recognize and apply key factors when computing MACRS.
  • Recognize situations in which the nondeductible criteria could cause an expenditure not to be deductible.
  • Recognize when special rules apply, e.g., expensing, bonus, luxury cars, ADS, and leasehold improvements.
  • Understand and apply the limitations upon a home office deduction.
  • Understand and apply the requirements for an accrual method taxpayer to take a deduction (Economic Performance rules).
  • Understand basic corporate tax attributes.
  • Understand how to account for income under the cash and the accrual methods.
  • Understand tax consequences of being a member of a controlled group.
  • Understand that parent/subsidiary and brother-sister corporations are members of a controlled group.
  • Understand what is depletion, the difference between cost and percentage, and be able to compute them.
  • Understand what is the net operating loss deduction.
  • Explain how some of the key components of tax planning work.
  • Explain various concepts regarding income, e.g., substance vs. form and assignment of income.
  • Identify what type of entity pays federal income taxes.
  • Understand the basic format of how property transactions are taxed.
  • Understand the basic structure of the federal income tax paying entities.
  • Understand the income tax structure.
  • Appreciate and be able to explain why the nondeductible criteria exist.
  • Demonstrate how organizational expenses are handled for tax purposes?
  • Describe the bad debt deduction for business bad debts and non-business bad debts and the tax treatment of such deductions.
  • Explain how MACRS works.
  • Explain how some of the key components of tax planning work.
  • Explain the implications of having a qualified or a nonqualified retirement plan.
  • Explain the importance of documentation.
  • Explain the income tax effects to the borrower and to the lender from a below market loan.
  • Explain the tax differences between qualified and nonqualified stock options.
  • Explain what is a deduction.
  • Explain what is compensation.
  • Identify UNICAP activities and UNICAP expenses.
  • Identify conditions under which and amounts of travel expenses which are deductible.
  • Identify how much and when retirement plan contributions can be made.
  • Identify if this is a taxable transaction i.e., is there recognized gain or loss?
  • Identify the effects of qualified and nonqualified stock options upon the employer and employee.
  • Identify the value or amount of compensation.
  • Identify what are the effects from the sale of a business?
  • Identify what are the effects of electing to file a consolidated tax return?
  • Identify what are the requirements to file a consolidated tax return?
  • Identify what is the adjusted basis of the property after acquisition?
  • Identify what is the amount of realized gain or loss from disposition?