Effective: Early Spring 8-Week 2017/2018

BUSI 581: Federal Income Tax - Business Entities

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  Course Description

Focuses on the federal income taxation of corporations and shareholders; corporate formation and capital structure; corporate distributions; corporate liquidations; penalty taxes on corporations; partnerships; S corporations.

Prerequisite: ACCT 381

Proctored Exams: None



  Textbooks

Required

  • Spilker, Brian. Taxation of Business-Entities. 7th ed. McGraw-Hill Publishing Company, 2016.
    • ISBN-978-1-259-63501-4

Connect

Access to CONNECT is included with the purchase of new textbook from MBS Direct. However, if you need to purchase access to CONNECT separately, the ordering ISBN is 978-1-259-41977-5.

CAUTION: Do not purchase USED passcodes to CONNECT; they are not valid. Passcodes to CONNECT can also be purchased online directly from the Publisher during the first week of class.

Students will be provided a link to the course Connect website on the first day of class. Do not try to register for Connect prior to the first day. You must register for the website associated with this session and section only. Registration cannot be changed or reversed.

MBS Information

Textbooks for the course may be ordered from MBS Direct. You can order

For additional information about the bookstore, visit http://www.mbsbooks.com.

  Course Overview

This class is designed to:

  • Introduce students to a broad range of tax concepts and types of taxpayers
  • Emphasize the role of taxation in the business decision-making process
  • Provide students with the ability to conduct basic tax research and tax planning
  • Expose students to professional standards and ethics
  • Provide students with a knowledge of the interrelationship and differences between financial accounting and tax accounting

Each week we will focus on a different aspect of federal taxation with readings, homework, quizzes, discussions and any other activities that will help us understand the issues and problems encountered in taxation.

  Technology Requirements

Participation in this course will require the basic technology for all online classes at Columbia College:
  • A computer with reliable Internet access
  • A web browser
  • Acrobat Reader
  • Microsoft Office or another word processor such as Open Office

You can find more details about standard technical requirements for our courses on our site.

  Course Objectives

  • To gain an understanding of the conceptual framework of the federal tax law for corporations and other business entities.
  • To understand accounting procedures and tax laws necessary to ensure compliance.
  • To develop an appreciation of techniques used in tax planning.

  Measurable Learning Outcomes

  • Identify the sources of tax law and methods of tax research.
  • Describe the various forms of capital structures and the taxation of each.
  • Compute a corporation’s taxable income and tax liability.
  • Describe and calculate the taxation of corporate distributions, both liquidating and non-liquidating.
  • Describe and calculate the Alternative Minimum Tax.
  • Describe and calculate the tax consequences of corporate acquisitions and reorganizations.
  • Prepare consolidated tax returns.
  • Describe and calculate the taxation of partnerships and S corporations.
  • Describe and calculate the taxation of gifts and estates.

  Grading

Grading Scale

Grade Points Percent
A 900-1000 90-100%
B 800-899 80-89%
C 700-799 70-79%
F 0-699 0-69%

Grade Weights

Assignment Category Points Percent
Discussions (9) 180 18%
Connect Homework (8) 160 16%
Weekly Quizzes (8) 160 16%
Exam 1 150 15%
Exam 2 150 15%
Final Exam 200 20%
Total 1000 100%

  Schedule of Due Dates

Week 1

Assignment Points Due
Introductions and Discussion 1 40 Sunday
Connect Homework 1 20
Chapter 1 Quiz 20

Week 2

Assignment Points Due
Discussion 2 20 Sunday
Connect Homework 2 20
Chapters 2 & 3 Quiz 20

Week 3

Assignment Points Due
Discussion 3 20 Sunday
Connect Homework 3 20
Chapters 4 & 5 Quiz 20
Exam 1 (Chapters 1-5) 150

Week 4

Assignment Points Due
Discussion 4 20 Sunday
Connect Homework 4 20
Chapters 6 & 7 Quiz 20

Week 5

Assignment Points Due
Discussion 5 20 Sunday
Connect Homework 5 20
Chapter 8 Quiz 20

Week 6

Assignment Points Due
Discussion 6 20 Sunday
Connect Homework 6 20
Chapters 9 & 10 Quiz 20
Exam 2 (Chapters 6-10) 150

Week 7

Assignment Points Due
Discussion 7 20 Sunday
Connect Homework 7 20
Chapters 11 & 12 Quiz 20

Week 8

Assignment Points Due
Discussion 8 20 Saturday
Connect Homework 8 20
Chapter 14 Quiz 20
Final Exam (Chapters 11, 12, & 14) 200
Total Points: 1000

  Assignment Overview

Connect Homework Assignments

Each week has selected homework exercises for the chapter(s) assigned to the week. These assignments are to be completed using the Connect Homework Manager tool that students link to on the Internet. An “access card” is required and should have been part of the student’s textbook purchase through MBS Direct. Students have unlimited attempts at the homework assignments and may work the assignments until they have obtained the twenty (20) possible points for each week.

Discussions

Each week students are asked to post an answer to the assigned Discussion question(s) and to post responses to other students’ postings in the appropriate forum found in the Discussions area of the course room. The subject titles should aid us in developing an online discussion flow similar to having a discussion if we were face-to-face. In other words, we should all be able to know where we are entering a discussion. To earn full credit, students must respond to other students’ postings with substantive comments to at least two classmates.

Postings must be completed by 11:59 p.m. on Sunday. However, if you do not post until after 9p.m. on Saturday, you will not be eligible for more than 4 discussion points for the week.

Quizzes and Exams

Each week students are required to complete a Chapter Quiz by 11:59 p.m. Sunday. Each quiz is worth a total of 20 points. Students can take this quiz up to two times, and are awarded the highest score of the two attempts.

Students are also required to complete two exams (Exams 1 and 2) and a Final Exam. Exam 1 will be available from Monday of Week 3 at 12:05 a.m. until Sunday of Week 3 at 11:59 p.m. Exam 2 will be available Monday of Week 6 at 12:05 a.m. until Sunday of Week 6 at 11:59 p.m. The Final Exam will be available from Thursday of Week 8 at 12:05 a.m. until Saturday of Week 8 at 11:59 p.m. Exams 1 and 2 are comprised of 30 questions worth 5 points each for a total of 150 points for each exam. The Final Exam is comprised of 40 questions worth 5 points each for a total of 200 points.

Neither the quizzes nor the exams are to be completed in teams of students or with any help from any individual. However, all other resources are available to students. The available resources may include, but are not limited to, your textbook, material under Content area of the course room, other textbooks, the Internet, etc. Again, students are responsible for completing all quizzes and tests on their own. The instructor will adjudge whether or not a student has “teamed-up” with another to complete a quiz or test. If the instructor concludes that cheating has occurred, grades of all those suspected will be lowered by two (2) full letter grades. To appeal this action, each student will need to file a formal complaint with Columbia College.

  Course Outline

Click on each week to view details about the activities scheduled for that week.

Readings
Chapter 1
Introductions and Discussion 1

Introductions: Students should introduce themselves in the Introductions forum found in the Discussions area of the course room. An introduction may include your geographic location, your hobbies, your family, or anything else you would like to share; in addition, you must include your reasons for taking this course and how you value it in light of your career goals. This is a required posting.

Discussion 1: Jimmy is the sole proprietor of a small dry cleaning business. This month Jimmy paid for his groceries by writing checks from the checking account dedicated to the dry cleaning business. Why do you suppose Jimmy is using his business checking account rather than his personal checking account to pay for personal expenditures?

Connect Homework 1

Students should visit the Connect Homework Manager website and complete the textbook assignments provided. The link to the Connect site can be found in the course room.

Chapter 1: Problems 48, 55, 59, 66 and Comprehensive Problems 82 & 84.

Chapter 1 Quiz
Complete the Week 1 Quiz by 11:59 p.m. Sunday.
Readings
Chapters 2 & 3
Discussion 2

Chapter 2: Explain the reasoning behind the tax laws requiring the cost of certain assets to be capitalized and recovered over time rather than immediately expensed. What similarities and dissimilarities are there between depreciation, amortization, and depletion? Describe the cost recovery method used for each of the four asset types (personal property, real property, intangible property, and natural resources).

Chapter 3: When a taxpayer sells an asset, what is the difference between realized and recognized gain or loss on the sale? What does it mean to characterize a gain or loss? Why is characterizing a gain or loss important? Explain the difference between ordinary, capital and section 1231 assets.

Connect Homework 2

Chapter 2: Problems 43, 50, 63, 68, 70 and Comprehensive Problem 71.

Chapter 3: Problems 34, 35, 40, 42, 50, and Comprehensive Problem 67.

Chapters 2 & 3 Quiz
Complete the Week 2 Quiz by 11:59 p.m. Sunday.
Readings
Chapters 4 & 5
Discussion 3

Chapter 4: How do business owners create legal entities and is the process the same for all entities? If not, what are the differences? What is the operating agreement for an LLC? Are operating agreements required for limited liability companies? If not, why might it be important to have one? How does a corporation’s decision to pay dividends affect its overall tax rate [(corporate level tax +shareholder level tax)/taxable income]?

Chapter 5: Briefly describe the process of computing a corporation’s taxable income assuming the corporation must use GAAP to determine its book income. How might the process differ for corporations not required to use GAAP for book purposes? Why is it important to determine whether a particular book-tax difference is permanent or temporary? When a corporation receives a dividend from another corporation, does the dividend generate a book-tax difference to the dividend-receiving corporation (ignore the dividend-received deduction)? Explain.

Connect Homework 3

Chapter 4: Problems 59, 60, 61, 66, 72, Comprehensive Problem 73

Chapter 5: Problems 44, 48, 57, 70, 72, 81 and Comprehensive Problem 86

Chapters 4 & 5 Quiz
Complete the Week 3 Quiz by 11:59 p.m. Sunday.
Exam 1 (Chapters 1-5)
Complete Exam 1 by 11:59 p.m. Sunday. The exam covers the material from Chapters 1 through 5. The exam will be open Monday morning. You are allowed to use your textbook and other written resources to assist with the exam, but no collaboration or assistance from another person is allowed.
Readings
Chapters 6 & 7 
Discussion 4

Chapter 6: Briefly describe the six-step process by which a company computes its income tax provision. How does a company determine if a deferred tax asset or liability should be classified as current or noncurrent on its balance sheet?

Chapter 7: A shareholder receives appreciated noncash property from his corporation and assumes a liability attached to the property. How does the assumption of a liability affect the amount of dividend he reports in gross income? Amy is the sole shareholder of her corporation. Rather than have the corporation pay her a dividend, Amy decides to have the corporation declare a “bonus” at year-end and pay her tax-deductible compensation. What potential tax issue may arise in this situation? Which parties, Amy or the corporation or both, are affected by the classification of the payment?

Connect Homework 4

Chapter 6: Problems 39, 43, 62, 66, 75 and Comprehensive Problem 77

Chapter 7: Problems 32, 41, 45, 49, 62, and Comprehensive Problem 66

Chapters 6 & 7 Quiz
Complete the Week 4 Quiz by 11:59 p.m. Sunday.
Readings
Chapter 8
Discussion 5
Chapter 8: What is the definition of control for purposes of section 351? Why does Congress require the shareholders to control a corporation to receive tax deferral? Explain whether the receipt of boot by a shareholder in a section 351 transaction causes the transaction to be fully taxable. Explain whether all shareholders receive the same tax treatment in a complete liquidation of a corporation.
Connect Homework 5
Chapter 8: Problems 38, 47, 51, 55 and Comprehensive Problem 58
Chapter 8 Quiz
Complete the Week 5 Quiz by 11:59 p.m. Sunday.
Readings
Chapters 9 & 10
Discussion 6

Chapter 9: What is the rationale for requiring partners to defer most gains and all losses when they contribute property to partnerships? What are inside basis and outside basis and why are they relevant for taxing partnerships and partners?

Chapter 10: What restrictions might prevent a partner from selling his partnership interest to a third party? Why would a new partner who pays more for a partnership interest than the selling partner’s outside basis want the partnership to elect a special basis adjustment.

Connect Homework 6

Chapter 9: Problems 41, 54, 62, 68, and Comprehensive Problem 80

Chapter 10: Problems 30, 41, 45, 52, 54, 55 and Comprehensive Problem 59

Chapters 9 & 10 Quiz
Complete the Week 6 Quiz by 11:59 p.m. Sunday.
Exam 2 (Chapters 6-10)
Complete Exam 2 by 11:59 p.m. Sunday. The exam covers material from Chapters 6 through 10. The exam will be open Monday morning. You are allowed to use your textbook and other written resources to assist with the exam, but no collaboration or assistance from another person is allowed.
Course Evaluation
Please evaluate the course. You will have an opportunity to evaluate the course near the end of the session. A link sent to your CougarMail will allow you to access the evaluation. Please note that these evaluations are provided so that I can improve the course, find out what students perceive to be its strengths and weaknesses, and in general assess the success of the course. Please do take the time to fill this out.
Readings
Chapters 11 & 12
Discussion 7

Chapter 11: How do the tax laws treat family members for purposes of limiting the number of owners an S corporation may have? In what circumstances could a calendar-year C-corporation make an election on February 1, year 1, to be taxed as an S corporation in year 1 but not have the election effective until year 2?

Chapter 12: Briefly describe the nexus concept and explain its importance to state and local taxation. In what situation would it be advantageous for a business to establish its income tax nexus in a state?

Connect Homework 7

Chapter 11: Problems 44, 48, 49, 57, 66 and Comprehensive Problem 85

Chapter 12: Problems 32, 34, 35, 43, and Comprehensive Problem 51

Chapters 11 & 12 Quiz
Complete the Week 7 Quiz by 11:59 p.m. Sunday.
Readings
Chapters 14
Discussion 8

Please note that all discussion postings must be submitted by Wednesday at 11:59 p.m. There cannot be any discussion of course content while the Final Exam is being administered.

Chapter 14: Identify the features common to the gift tax formula and the estate tax formula. Fred is retired and living on a pension. He has accumulated almost $1 million of property he would like to leave to his children. However, Fred is afraid much of his wealth will be eliminated by the federal estate tax. Is Fred’s fear well founded?

Connect Homework 8

Complete by 11:59 p.m. on Wednesday

Chapter 14: Problems 35, 46, 49, 62 and Comprehensive Problem 66

Chapter 14 Quiz
Complete the Week 8 Quiz by 11:59 p.m. Wednesday.
Final Exam (Chapters 11, 12, & 14)
Complete Exam 2 by 11:59 p.m. Sunday. The exam covers material from Chapters 6 through 10. The exam will be open Monday morning. You are allowed to use your textbook and other written resources to assist with the exam, but no collaboration or assistance from another person is allowed.

  Course Policies

Student Conduct

All Columbia College students, whether enrolled in a land-based or online course, are responsible for behaving in a manner consistent with Columbia College's Student Conduct Code and Acceptable Use Policy. Students violating these policies will be referred to the office of Student Affairs and/or the office of Academic Affairs for possible disciplinary action. The Student Code of Conduct and the Computer Use Policy for students can be found in the Columbia College Student Handbook. The Handbook is available online; you can also obtain a copy by calling the Student Affairs office (Campus Life) at 573-875-7400. The teacher maintains the right to manage a positive learning environment, and all students must adhere to the conventions of online etiquette.

Plagiarism

Your grade will be based in large part on the originality of your ideas and your written presentation of these ideas. Presenting the words, ideas, or expression of another in any form as your own is plagiarism. Students who fail to properly give credit for information contained in their written work (papers, journals, exams, etc.) are violating the intellectual property rights of the original author. For proper citation of the original authors, you should reference the appropriate publication manual for your degree program or course (APA, MLA, etc.). Violations are taken seriously in higher education and may result in a failing grade on the assignment, a grade of "F" for the course, or dismissal from the College.

Collaboration conducted between students without prior permission from the instructor is considered plagiarism and will be treated as such. Spouses and roommates taking the same course should be particularly careful.

All required papers may be submitted for textual similarity review to Turnitin.com for the detection of plagiarism. All submitted papers may be included in the Turnitin.com reference database for the purpose of detecting plagiarism. This service is subject to the Terms and Conditions of Use posted on the Turnitin.com site.

Non-Discrimination

There will be no discrimination on the basis of sex, race, color, national origin, sexual orientation, religion, ideology, political affiliation, veteran status, age, physical handicap, or marital status.

Student Accessibility Resources

Students with documented disabilities who may need academic services for this course are required to register with the office of Student Accessibility Resources. Until the student has been cleared through this office, accommodations do not have to be granted. If you are a student who has a documented disability, it is important for you to read the entire syllabus as soon as possible. The structure or the content of the course may make an accommodation not feasible. Student Accessibility Resources is located in Student Affairs in AHSC 215 and can be reached by phone at (573) 875-7626 or email at sar@ccis.edu.

Online Participation

You are expected to read the assigned texts and participate in the discussions and other course activities each week. Assignments should be posted by the due dates stated on the grading schedule in your syllabus. If an emergency arises that prevents you from participating in class, please let your instructor know as soon as possible.

Attendance Policy

Attendance for a week will be counted as having submitted any assigned activity for which points are earned. Attendance for the week is based upon the date work is submitted. A class week is defined as the period of time between Monday and Sunday (except for week 8, when the work and the course will end on Saturday at midnight.) The course and system deadlines are based on the Central Time Zone.

Cougar Email

All students are provided a CougarMail account when they enroll in classes at Columbia College. You are responsible for monitoring email from that account for important messages from the College and from your instructor. You may forward your Cougar email account to another account; however, the College cannot be held responsible for breaches in security or service interruptions with other email providers.

Students should use email for private messages to the instructor and other students. The class discussions are for public messages so the class members can each see what others have to say about any given topic and respond.

Late Assignment Policy

An online class requires regular participation and a commitment to your instructor and your classmates to regularly engage in the reading, discussion and writing assignments. Although most of the online communication for this course is asynchronous, you must be able to commit to the schedule of work for the class for the next eight weeks. You must keep up with the schedule of reading and writing to successfully complete the class.

No late discussion posts will be accepted.

Students will be awarded zero points (i.e., no points earned) for any late assignments or exams unless the student and instructor have agreed to the late submission of any of these items prior to the due date. The instructor will only permit late assignments for documented events related to health or documented family experiences.

Course Evaluation

You will have an opportunity to evaluate the course near the end of the session. A link will be sent to your CougarMail that will allow you to access the evaluation. Be assured that the evaluations are anonymous and that your instructor will not be able to see them until after final grades are submitted.

  Additional Resources

Orientation for New Students

This course is offered online, using course management software provided by Desire2Learn and Columbia College. The course user guide provides details about taking an online course at Columbia College. You may also want to visit the course demonstration to view a sample course before this one opens.

Technical Support

If you have problems accessing the course or posting your assignments, contact your instructor, the Columbia College Helpdesk, or the D2L Helpdesk for assistance. Contact information is also available within the online course environment.

Online Tutoring

Smarthinking is a free online tutoring service available to all Columbia College students. Smarthinking provides real-time online tutoring and homework help for Math, English, and Writing. Smarthinking also provides access to live tutorials in writing and math, as well as a full range of study resources, including writing manuals, sample problems, and study skills manuals. You can access the service from wherever you have a connection to the Internet. I encourage you to take advantage of this free service provided by the college.

Access Smarthinking through CougarTrack under Students -> Academics -> Academic Resources.