ACCT 3231
Income Taxation 2

3.0 Credits

Description

Building on ACCT 3221: Income Taxation 1, students examine the taxation of corporations, corporate distributions, and transactions between corporations and their shareholders. Topics include an in-depth coverage of taxable capital gains; deferred income plans; and the taxation of corporate entities, partnerships, trusts and corporate reorganizations.

Delivery Method

Online, self-paced.

Prerequisites

There are no prerequisites for this course.

Recommended Requisites

ACCT 3221

Exclusions

ACCT 3230, BBUS 3230, BBUS 3231

Objectives

After successfully completing this course, students will be able to accomplish the following:

  • Apply the income tax provisions for the determination of gains and losses on the disposition of capital assets.
  • Evaluate the various deferred income plans available to Canadians and how these plans can be used for retirement, education or general wealth building purposes.
  • Calculate the net income, taxable income and taxes payable for a corporate entity.
  • Demonstrate how corporate entities are taxed on their investment income.
  • Interpret the technical corporate taxation issues involving the acquisition of control, association rules, investment tax credits, paid-up-capital and distribution of corporate surpluses.
  • Explain how a corporation can be used to reduce taxes, defer taxes, and facilitate income splitting.
  • Quantify the income of a partnership for tax purposes and allocate this income to partners.
  • Explain the taxation of the different types of trusts and how they can be successfully used for estate planning purposes.
  • Identify the major provisions of Section 85 rollovers under the Canadian Income Tax Act and other rollover provisions affecting corporations, partnerships and trusts.

Course Outline

Module 1: Introduction

  • Review of Taxation 1 material
  • Familiarity with course material

Module 2: Capital Gains and Capital Losses

  • Economic Background
  • General Rules
  • Detailed Application Of The Rules
  • Non-Arm's Length Transfers Of Property
  • Replacement Property Deferral Provisions
  • Deemed Dispositions
  • Provisions For Special Assets
  • Capital Gains And Tax Planning

Module 3: Retirement Savings and Other Special Income Arrangements

  • Registered Education Savings Plans (RESPs)
  • Registered Disability Savings Plans (RDSPs)
  • Tax Free Savings Accounts (TFSAs)
  • Planning For Retirement
  • Registered Retirement Savings Plan (RRSPs)
  • Registered Pension Plans (RPPs)
  • Registered Retirement Income Funds (RRIFs)
  • Deferred Profit Sharing Plans (DPSPs)
  • Profit Sharing Plans (PSPs)
  • Transfers Between Plans
  • Retirement Compensation Arrangements (RCAs)
  • Salary Deferral Arrangements (SDAs)
  • Individual Pension Plans (IPPs)

Module 4: Taxable Income and Tax Payable for Corporations

  • Introduction
  • Computation of Net Income
  • Computation of Taxable Income
  • Geographical Allocation of Income
  • Federal Tax Payable
  • Small Business Deductions
  • Manufacturing And Processing Profits Deduction
  • General Rate Reductions
  • Foreign Tax Credits For Corporations

Module 5: Taxation of Corporate Investment Income

  • Integration
  • Refundable Taxes On Investment Income
  • Refundable Part I Tax
  • Refundable Part IV Tax
  • Refundable Dividend Tax On Hand
  • Designation Of Eligible Dividend

Module 6: Other Issues in Corporate Taxation

  • Introduction
  • Acquisition Of Control Rules
  • Associated Companies
  • Investment Tax Credits
  • Tax Basis Shareholders' Equity
  • Distribution Of Corporate Surplus

Module 7: Corporate Taxation and Management Decisions

  • The Decision To Incorporate
  • Tax Reduction And Deferral
  • Provincial Taxes And Integration
  • Tax Free Dividends
  • Income Splitting
  • Shareholder Benefits
  • Management Compensation
  • Salary Vs. Dividends For The Owner - Manager

Module 8: Partnerships

  • Introduction
  • Partnerships Defined
  • Co-Ownership, Join Ventures And Syndicates
  • Partnership Income, Losses, Tax Credits
  • Allocations To Partners And Partner Expenses
  • The Partnership Interest
  • Limited Partnerships And Limited Partners
  • Transfer Of Property To And From A Partnership
  • Specified Investment Flow Through (SIFT) Partnership

Module 9: Trusts and Estate Planning

  • Introduction to Basic Estate Planning
  • Basic Concepts
  • Classification Of Trusts
  • Taxation Of Trusts
  • Net Income For Tax Purposes Of A Trust
  • Taxable Income Of A Trust
  • Income Allocations To Beneficiaries
  • Tax Payable Of Personal Trusts
  • Trust Tax And Information Returns
  • Income Attribution
  • Purchase Or Sale Of An Interest In A Trust
  • Tax Planning
  • Estate Planning
  • Estate Freeze
  • SIFT Partnerships And Trusts

Module 10: Rollovers under Section 85

  • General Rules For The Transfer
  • Transfer Prices- Detailed Rules
  • Allocation of the Elected Value
  • Paid Up Capital of Shares Issued

Maximum Completion

30 weeks.

Required Text and Materials

This is a companion course to ACCT 3221. The materials listed below would have been purchased when you enrolled in ACCT 3221. If you did not take ACCT 3221 and don't already own the required materials, please be aware that you will need to purchase them. To do so, please contact Student Services at: 1.800.663.9711 (toll-free in Canada), 250.852.7000 (Kamloops, BC), or 1.250.852.7000 (International).

  1. Byrd, C., & Chen, I. Byrd and Chen's Canadian Tax Principle Volume I. 2016-17 Edition. Toronto, ON: Pearson Prentice Hall, 2017.
    Type: Textbook, ISBN: 978-0-13-407112-1
  1. Byrd, C., & Chen, I. Byrd and Chen's Canadian Tax Principle Volume II. 2016-17 Edition. Toronto, ON: Pearson Prentice Hall, 2017.
    Type: Textbook, ISBN: 978-0-13-453212-7

(Volume II Includes Student CD-ROM and ProFile Professional Tax Suite)

  1. Byrd, C., & Chen, I. Byrd and Chen's Canadian Tax Principle Study Guide. 2016-17 Edition. Toronto, ON: Pearson Prentice Hall, 2017.
    Type: Textbook, ISBN: 978-0-13-453217-2

The above textbooks are provided to students as a bundle with an access kit to the companion website: Bundle ISBN: 9780134568393.

Students access the required FITAC and ProFile software free of charge via the publisher's website.

Please note: Intuit's ProFile software requires Windows 7, 8, or 10, and it is not compatible with Apple OS."

Additional Requirements

A computer with Internet access is required.

A financial calculator is required.

Excel software is strongly recommended.

Open Learning Faculty Member Information

An Open Learning Faculty Member is available to assist students throughout the course. Primary communication is through the Learning Management System's "Mail" tool or by phone. Students will receive the necessary contact information when they start their course.

Assessment

To successfully complete this course, students must achieve a passing grade of 50% or higher on the overall course and 50% or higher or higher on the final mandatory exam.

Assignment 1: Modules 1 to 3 10%
Quiz 1: Modules 4 to 5 8%
Quiz 2: Modules 6 to 7 8%
Assignment 2: Modules 8 to 10 14%
Final Exam * 60%
Total 100%

* Mandatory