Lifelong Learning for a Brighter World

Jing Zhou, McMaster University Continuing Education Accounting graduate Jing Zhou, McMaster University Continuing Education Accounting graduate

Accounting

Cheques and balances. It all adds up.

Work towards your CPA designation!

ACC 938 - Taxation II C01

Academic Credit Value:
3 units
Course Delivery Mode:
In-Person
Hours of Study:
42 hours
Course Prerequisite(s):
ACC 937 Taxation 1 – Federal Income Taxation in Canada or equivalent. Be advised: Students who do not meet the pre-requisite will be required to withdraw. In such cases, CCE’s withdrawal/refund policies will apply.
Course Anti-requisite(s):
N/A
Instructor Name:
Jamie Liddicoat
Course Dates:
05/07/2019 - 08/06/2019



Required Course Materials:
1.Introduction to Federal Income Taxation in Canada, Beam, Wolters Kluwer 39th edition 2. The Practitioner’s Income Tax Act, Sherman, Carswell, 55th or 54th edition
Optional Course Materials:
N/A
Course Description:
This course continues the examination of the theory and application of the Income Tax Act particularly as it relates to corporations.
Learning Outcomes:
This is the first of two introductory courses in federal income tax law which are designed to achieve the following objectives:
  1. to explain the theoretical concepts behind the specific provisions of the law,
  2. to apply the law in practical problems and case settings,
  3. to interpret the law, taking into account the specific wording of the provisions, judicial decisions and Canada Revenue Agency’s position, and
  4. to introduce basic tax planning concepts through problem application.

Topics and readings are set out under Sessional Outline.  Income tax law is technical and complex and the course moves very quickly.  Ask questions if you don’t understand a point – you are probably not the only one.  It is extremely important that you bring your ITA and text to class because we will be referring to the ITA (particularly in the first few classes) and exhibits, examples and problems in the text every week.

Students are expected to do the required readings and keep up with the exercises and assignments at the end of each chapter in the Beam & Laiken text.  Class preparation is essential if the student wishes to obtain maximum benefit from class work.

Students are also expected to bring their Income Tax Act to each class. Students will be permitted to bring and use their Income Tax Act for all quizzes and exams.

Course Evaluation
The final grade is calculated based on the following components:
Term Test #1   25%
Term Test #2   25%
Quizzes (Best 4) 10%
Final Exam 40%
Total 100%
Course Format:
This course is designed to present the fundamental concepts and theories in Federal Income Taxation in Canada and promote the application to the workplace and professional practice. Course activities will include instructor presentations, required readings and experiential learning activities (i.e. case studies, group discussions, projects, etc.).
Assignment Submission:
Late Coursework:
Late assignments will be subject to a 2% per day late penalty (includes weekends and holidays) for up to seven (7) days. After this date, no assignments will be accepted and a grade of zero (0) will be applied. Extensions for course work must be approved by the instructor before the due date (see Academic Regulations below), and will be granted for illness or emergencies only. Students may be asked to submit supporting documentation for an extension request.  NOTE:  This policy applies to assignments and other hand in type coursework only.  This policy does not apply to discussion board topics/postings which do not allow for late postings/contributions.

Policy & Procedures:

Academic Regulations (Attendance, Coursework, Tests/Exams):
In accordance to McMaster University’s General Academic Regulations, “it is imperative that students make every effort to meet the originally scheduled course requirements and it is a student’s responsibility to write examinations as scheduled.” Therefore, all students are expected to attend and complete the specific course requirements (i.e. attendance, assignments, and tests/exams) listed in the course outline on or by the date specified. Students who need to arrange for coursework accommodation, as a result of medical, personal or family reasons, must contact the course instructor within 48 hours of the originally scheduled due date. It is the student’s responsibility to contact the Program Manager to discuss accommodations and procedures related to deferred tests and/or examinations within 48 hours of the originally scheduled test/exam, as per policy. Failure to contact the course instructor, in the case of missed coursework, or the Program Manager, in the case of a missed test/examination, within the specified 48-hour window will result in a grade of zero (0) on the coursework/exam and no further consideration will be granted.

*Note: Supporting documentation will be required but will not ensure approval of accommodation(s).

Academic Integrity
You are expected to exhibit honesty and use ethical behaviour in all aspects of the learning process. Academic credentials you earn are rooted in principles of honesty and academic integrity. Academic dishonesty is to knowingly act or fail to act in a way that results or could result in unearned academic credit or advantage. This behaviour can result in serious consequences, e.g. the grade of zero on an assignment, loss of credit with a notation on the transcript (notation reads: “Grade of F assigned for academic dishonesty”), and/or suspension or expulsion from the university.

It is your responsibility to understand what constitutes academic dishonesty. For information on the various types of academic dishonesty please refer to the Academic Integrity Policy, located at http://www.mcmaster.ca/academicintegrity/

The following illustrates only three forms of academic dishonesty:

  1. Plagiarism, e.g. the submission of work that is not one’s own or for which other credit has been obtained.
  2. Improper collaboration in-group work.
  3. Copying or using unauthorized aids in tests and examinations.
Academic Accommodations:
Students with disabilities who require academic accommodations must contact the Student Accessibility Centre (SAS) to meet with an appropriate Disability Services Coordinator. To contact SAS, phone 905-525-9140 ext. 28652, or email sas@mcmaster.ca. For further information, consult McMaster University’s Policy for Academic Accommodation for Students with Disabilities.
On-line Elements:
In this course, we will be using on-line elements, which may include email, Avenue to Learn, WebEX, and external web sites.  Students should be aware that, when they access the electronic components of this course, private information such as first and last names, user names for the McMaster e-mail accounts, and program affiliation may become apparent to all other students in the same course. The available information is dependent on the technology used. Continuation in this course will be deemed consent to this disclosure. If you have any questions or concerns about such disclosure please discuss this with the course instructor.
Turnitin.com:
Course Changes:
The instructor reserves the right to modify elements of the course and will notify students accordingly.
Course Withdrawal Policy:
Policies related to dropping a course and course withdrawals are posted to the Centre for Continuing Education’s program webpage, FAQs & Policies (https://www.mcmastercce.ca/cce-policies#Dropping).
Storm Closure Policy:

In the event of inclement weather, the Centre for Continuing Education will abide by the University’s Storm Closure Policy: https://www.mcmaster.ca/policy/Employee/storm_emergency_policy.pdf, and will only close if the University is closed. All in-class courses, exams and room bookings by internal and external clients will be cancelled if the Centre for Continuing Education is closed. On-line courses will take place as scheduled.

Grading Scale:
Grade Equivalent
Grade Point
Equivalent Percentages
A+ 12 90-100
A 11 85-89
A- 10 80-84
B+ 9 77-79
B 8 73-76
B- 7 70-72
C+ 6 67-69
C 5 63-66
C- 4 60-62
D+ 3 57-59
D 2 53-56
D- 1 50-52
F 0 0-49
Course Schedule:
Week 1
Introduction
Chapter 11 – Computation of Taxable Income and Tax After General Reductions for Corporations 
- Review components and tax payable for a corporation
- Basic corporate tax for all corporations
- Deductions and credits available.
- Liability for tax and how to determine residency.
- Rules for computing net income for tax purposes and taxable income.

Week 2
Chapter 12 – Integration for Business and Investment Income for a Private Corporation 
- Small business deduction
- Active vs. inactive business
-Types of corporations
- Personal services corporations
- Associated corporations

Week 3
Chapter 12 continued – Integration for Business and Investment Income of a Private Corporation 
- Refundable taxes on investment income
- Refundable dividend tax on hand
- Dividend refunds
  - Eligible dividend designations
- Quiz 1

Week 4
Chapter 13 – Shareholder-Manager Remuneration and Tax Planning for the Owner-Manager 
- Decision to incorporate
- Choice of remuneration for owner/managers
- Salary versus dividends
- Shareholder benefits and loans
- Quiz 2

Week 5
Term Test #1 (Chapters 11-13)

Week 6
Chapter 15 – Corporate Distributions, Winding up and Sales
- Distribution of corporate surplus
- Paid up capital
- Types of dividends
- Winding up a corporation
- Sale of an incorporated business.
- Business valuations
- Asset vs. shares
- Tax shelters

Week 7
Chapter 16 – Rollovers on Transfers to a Corporation and Pitfalls 
- Detailed rules and uses of S85.
- Depreciable and non-depreciable property.
- Choice and allocation of elected values
- Other issues and pitfalls.
- Section 22 election.
- Quiz 3

Week 8
Chapter 17 – Other Rollovers and Use of Rollovers in Estate Planning
- ITA 85.1 share for share exchanges
- ITA 86 reorganizations.
- Estate freezes
- Amalgamations
- Wind ups
- Quiz 4

Week 9
Term Test #2 (Chapters 15-17)

Week 10
Chapter 18 - Partnerships
- Nature of a partnership
- Joint ventures and syndicates
- Income, losses and tax credits for partnerships
- Allocation to partners and partnership interests

Week 11
Chapter 18 Continued – Trusts and Estate Planning
- Establishing a trust
- Types of trusts
- Taxation of trusts
- Rollovers to trusts
- Allocation to beneficiaries
- Use of trusts in tax planning
- Quiz 5

Chapter 20 – GST/HST
        - Basic Concepts
        - Exempt Supplies
        - Input Tax Credits
        - Liability for GST
        - Registration and Filing

Week 12
Chapter 19 – International Taxation in Canada
- Non resident liability for tax
- Part year residents
- Withholding taxes
- Cross border transactions
- Cross border reporting requirements
- Quiz 6

Week 13
Final Exam (Chapters 11-19)