N/A. Yes. Students are expected to review and understand all areas of the course outline.

Transcription

1 Course Outline School: Department: Business Accounting Course Title: Taxation 1 Course Code: ACCT 226 Course Hours/Credits: 56 Prerequisites: ACCT 112, ACCT 123, BA 112 Co-requisites: Eligible for Prior Learning, Assessment and Recognition: Originated by: N/A Yes Chaman Doma Creation : Fall 2011 Revised by: Chaman Doma, S.Lamarre Revision : Winter 2015 Current Semester: Summer 2015 Approved by: Chairperson/Dean Students are expected to review and understand all areas of the course outline. Retain this course outline for future transfer credit applications. A fee may be charged for additional copies. This course outline is available in alternative formats upon request.

2 Course Description This course is offered to students enrolled in Accounting and Financial Services two and three years programs. This course gives you an understanding of the Income Tax Act and regulations to determine the Income Tax Liability as it applies to individuals. The course allows you to learn how to prepare a tax return for an individual resident of Canada and to use the knowledge gained from this course to solve problems relating to the taxation of individuals resident and non-resident of Canada. The course will involve lectures, assignments and a tax return done both manually and on the computer using recognized computer tax software. Program Outcomes Successful completion of this and other courses in the program culminates in the achievement of the Vocational Learning Outcomes (program outcomes) set by the Ministry of Training, Colleges and Universities in the Program Standard. The VLOs express the learning a student must reliably demonstrate before graduation. To ensure a meaningful learning experience and to better understand how this course and program prepare graduates for success, students are encouraged to review the Program Standard by visiting For apprenticeship-based programs, visit Course Learning Outcomes The student will reliably demonstrate the ability to: Determine who is liable for taxation in Canada. Describe the different sources of income and how they are taxed in the hands of an Individual and compute income for tax purposes under Part 1 tax Calculate net income according to Section 3 of the ITA and prepare an income tax return manually for an individual resident of Canada. Identify the administrative and enforcement policies of Canada Revenue Agency (Canada Revenue Agency) Identify taxation issues and sources for research Complete an income tax return using tax software (Profile) Essential Employability Skills (EES) The student will reliably demonstrate the ability to*: 3. Execute mathematical operations accurately. *There are 11 Essential Employability Skills outcomes as per the Ministry Program Standard. Of these 11 outcomes, the following will be assessed in this course. Global Citizenship and Equity (GC&E) Outcomes The student will reliably demonstrate the ability to*: 5. Identify and challenge unjust practices in local and global systems. 6. Support personal and social responsibility initiatives at the local, national or global level. *There are 6 institutional Global Citizenship & Equity outcomes. Of these 6 outcomes, the following will be assessed in this course. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 2

3 Text and other Instructional/Learning Materials Text Book(s): Text and Other Instructional/Learning Materials: 1. CANADIAN TAX PRINCIPLES EDITION, BY BYRD & CHEN. Prentice Hall [Available at the Centennial College Bookstore] 2. The Income Tax Act, current edition (Included with CD which comes with the textbook) General Tax Guide and Forms (Available on Canada Revenue Agency website 4. Study Guide which accompanies the textbook. Material(s) required for completing this course: Required Supplies Only non-programmable (numeric memory, not text memory) calculators with no more than the following six functions: addition, subtraction, multiplication, division, square root, and percentage may be used for supervised in-class assignments, tests, and examinations. Students using other types of calculators will be asked to discontinue such use in order to complete the assignment, test or examination. If you are unsure about the appropriateness of your calculator, please check with your professor. Scheme G C & E case: Completion of manual tax return Term Test 1: Chapter 1,2.3 and 4 Term Test # 2: Chapters 4, 5,6, and 7 Quizzes/s: 7 Quizzes and 7 assignments from Chapters 1 to 9 Final Exam: All materials covered in semester. CLO(s) EES GCE Outcome(s) Outcome(s) Weight/100 G C & E case 3, 6 3 5, 6 5 Term Test 1 1, 2, Term Test # Quizzes/s 1, 2, 3, 4, Final Exam 1, 2, 3, 4, Total 100% If students are unable to write a test they should immediately contact their professor or program Chair for advice. In exceptional and well documented circumstances (e.g. unforeseen family problems, serious illness, or death of a close family member), students may be able to write a make-up test. All submitted work may be reviewed for authenticity and originality utilizing Turnitin. Students who do not wish to have their work submitted to Turnitin must, by the end of the second week of class, communicate this in writing to the instructor and make mutually agreeable alternate arrangements. When writing tests, students must be able to produce official College photo identification or they may be refused the right to take the test or test results will be void. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 3

4 Student Accommodation It is College Policy to provide accommodation based on grounds defined in the Ontario Human Rights Code. Accommodation may include modifications to standard practices. Students with disabilities who require academic accommodations must register with the Centre for Students with Disabilities. Students requiring accommodation based on other human rights grounds should talk with their professors as early as possible. Please see the Student Accommodation Policy. Use of Dictionaries Dictionaries may be used in tests and examinations, or in portions of tests and examinations, as long as they are non-electronic (not capable of storing information) and hard copy (reviewed by the invigilator to ensure notes are not incorporated that would affect test or examination integrity). Program or School Policies N/A Course Policies s, Tests and Examinations Tests must be written on scheduled dates; A student who misses a test or fails to submit an assignment on the due date will receive a grade of F on that portion of the course; A student who misses a test because of illness must telephone the SOB office at (416) ext on the scheduled day of the test to report his/her illness. Your Professor has the right to request a doctor s note; If a student is unable to write the final examination, your professor does not have the authority to approve a supplemental opportunity. Students who miss the final examination for bona- fide reasons will be allowed to write the final examination at the next regular sitting of the examination (i.e. students missing the Winter examination, will be allowed to write the Summer 2014 final examination). Deferred examinations are not granted to accommodate travel arrangements. Therefore, until the final examination schedule is published, you should not plan to leave the college until the last possible day of examinations. Students must retain a copy of completed assignments handed into their professor in case of misplaced work; College Policies Students should familiarize themselves with all College Policies that cover academic matters and student conduct. All students and employees have the right to study and work in an environment that is free from discrimination and harassment and promotes respect and equity. Centennial policies ensure all incidents of harassment, discrimination, bullying and violence will be addressed and responded to accordingly. Academic honesty is integral to the learning process and a necessary ingredient of academic integrity. Academic dishonesty includes cheating, plagiarism, and impersonation. All of these occur when the work THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 4

5 of others is presented by a student as their own and/or without citing sources of information. Breaches of academic honesty may result in a failing grade on the assignment/course, suspension or expulsion from the college. For more information on these and other policies, please visit Students enrolled in a joint or collaborative program are subject to the partner institution's academic policies. PLAR Process This course is eligible for Prior Learning Assessment and Recognition (PLAR). PLAR is a process by which course credit may be granted for past learning acquired through work or other life experiences. The PLAR process involves completing an assessment (portfolio, test, assignment, etc.) that reliably demonstrates achievement of the course learning outcomes. Contact the academic school to obtain information on the PLAR process and the required assessment. This course outline and its associated weekly topical(s) may not be reproduced, in whole or in part, without the prior permission of Centennial College. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 5

6 Topical Outline (subject to change): Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies 1 Introduction to Federal Chapter 1 1.Explain the Canadian tax System and tax Taxation In Canada policy concepts Concept of residency and deemed residency Liability of residents and deemed residents Liability of non residents under Part 1 and Part XIII International tax conventions Chapter 20 Topics: Residents, Non- Residents, Immigration and Emigration, Foreign Source Income of Residents 2.Determine liability for tax-residents and nonresidents 3. Apply the concepts of Income, net income and tax Planning. 4. Explain the concepts of resident and deemed resident 5. Determine the tax consequences of a person resident in Canada for only part of the year (Immigration and Emigration) 6.Determine when a non-resident is subject to Part 1 tax and Part XIII tax; 7. Explain the importance of tax conventions such as the Canada-U.S. Tax treaty 2 Procedures and Administration. Chapter 2 Note: Read only sections as it pertains to the Taxation of individuals in Canada 1. Discuss the administration of the Tax department 2. Describe the procedures and deadlines for filing tax returns, assessments and reassessments, and the payment of taxes, including source deductions Self Study & Quiz # 1 Chapter 1 3.Explain procedures for appealing assessments and procedures and deadlines for filing the Notice of Objection 4.Explain CRA filing and installment due dates, and the calculation of interest and penalties for non-compliance. 5. Explain the powers conferred on CRA in administering and enforcing the ITA, including the civil penalties applicable to third parties THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 6

7 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies (tax preparers and tax planners) 3 Income/ Loss from an Office or Employment Chapter 3 1.Apply the basic rules used to determine employment income, using the source concept 2.Distinguish between employee and independent contractor Quiz # 2 Chapter 2 Self Study & 3.Determine the value of non-cash taxable benefits received from employment 4.Explain and apply the rules for stock option plan benefits 5.Compute taxable benefit for employerprovided automobile,s low interest or no interest loans and housing subsidies 6.Determine and calculate the deductions allowed in computing employment income 4 Income/ Loss from an Office or Employment - continued Chapter 3 - continued 1.Apply the basic rules used to determine employment income, using the source concept 2.Distinguish between employee and independent contractor Self study and assignment 3.Determine the value of non-cash taxable benefits received from employment 4.Explain and apply the rules for stock option plan benefits 5.Compute taxable benefit for employerprovided automobile,s low interest or no interest loans and housing subsidies 6.Determine and calculate the deductions allowed in computing employment income 5 Taxable Income and Chapter 4 1. Calculate taxable income from net income Self Study and THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 7

8 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies Calculation of Tax for tax purposes and explain the order in payable by which deductions are claimed individuals. 2.Compute tax under Part 1 using appropriate marginal tax brackets and principles of tax planning Quiz # 3 on Chapter 3. 6 Taxable Income and Calculation of Tax payable for Individuals-continued Chapter 4 3.Identify and apply the available nonrefundable tax credits 4.Identify and apply the available refundable tax credits (The GST/HST tax credit, the WITB and the Canada Child tax benefit) 5.Explain and compute Part 1.2 tax (social benefits repayment (OAS and EI)) 1.Compute tax under Part 1 using appropriate marginal tax brackets and principles of tax planning 2.Identify and apply the available nonrefundable tax credits 3.Identify and apply the available refundable tax credits (The GST/HST tax credit, the WITB and the Canada Child tax benefit) 4.Explain and compute Part 1.2 tax (social benefits repayment (OAS and EI)) problems Class participation Use of tax software Quiz # 4 on Chapter 4. 7 Term test # 1 All materials covered to date of 1st Test. 8 Income or Loss from a Business Capital Cost Allowance/Cumulative Eligible Capital deductions. Chapters 5 and 6. n/a Closed book Exam Term Test # 1 15% of Final Grade 1.Compare the tax depreciation capital cost allowance (CCA) system and accounting depreciation methods 2.Apply the general rules of the CCA system including available for use rule, half year rule, short taxation year rules, and rates for Self study and THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 8

9 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies commonly used CCA classes 3.Discuss and apply the recapture and terminal loss provisions for dispositions 4.Determine undepreciated capital cost (UCC) and apply the provisions for treatment of acquisition and disposition of depreciable property 9 Income or Loss from a Business Capital Cost Allowance and Cumulative Eligible Capital deductions. Chapters 5 and 6. 5.Discuss what constitutes eligible capital property (ECP) and calculate cumulative eligible capital amount (CECA) 1.Distinguish between incorporated (corporation) and unincorporated business (sole proprietorship and partnerships) 2.Discuss the treatment of business income for an individual proprietor or partner and the election available for a non-calendar fiscal year. Quiz # 5 (Chapters 5/6 3.Identify the criteria for distinguishing between business income, employment income, capital gains and income from property 4.Explain the difference between business income for tax purposes and accounting income 5.Explain the rules relating to inclusions in business income 6.Apply the general principles applicable in computing business income 7.Identify expenses that are specifically deductible in computing business income 8.Explain specific limiting items under ITA 18, including personal and living expenses, club dues, political contributions, expenses of a THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 9

10 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies personal services business (PSB) and interest and property taxes on land 9.Apply business income tax rules to prepare a reconciliation schedule for the computation of net income from business 10 Income from Property and Taxable Capital Gains Chapter 7 and Explain income from Farmers and Professional Income 1.Explain and apply the rules for annual reporting of interest 2.Determine the taxable amount of a dividend received from different types of corporations (resident vs non resident Self Study and 3.Compute net rental income and apply special rules for CCA claimed on rental property 4.Discuss why capital gains and losses are treated differently from other types of income 5.Calculate taxable capital gains, allowable capital losses, and the allowable capital gains reserve 6.Explain the adjustments to the cost base in the definition of adjusted cost base for calculation of capital gain or loss 7.Describe capital gain/loss special rules for identical properties, depreciable property, personal-use property, listed personal property and business investment loss 8.Explain the term affiliated persons and its application 9.Determine superficial loss for dispositions to affiliated persons. 10.Explain the provisions for principal THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 10

11 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies residence exemption and change-in-use rules 11 Income from Property. Capital Gains and Capital Losses. Chapters 7 and Identify deferral provisions on replacement property (voluntary and involuntary dispositions) 1.Explain and apply the rules for annual reporting of interest 2.Determine the taxable amount of a dividend received from different types of corporations (resident vs non resident Quiz # 6 on Chapters 7 and 8. 3.Compute net rental income and apply special rules for CCA claimed on rental property 4.Discuss why capital gains and losses are treated differently from other types of income 5.Calculate taxable capital gains, allowable capital losses, and the allowable capital gains reserve 6.Explain the adjustments to the cost base in the definition of adjusted cost base for calculation of capital gain or loss 7.Describe capital gain/loss special rules for identical properties, depreciable property, personal-use property, listed personal property and business investment loss 8.Explain the term affiliated persons and its application 9.Determine superficial loss for dispositions to affiliated persons. 10.Explain the provisions for principal residence exemption and change-in-use rules THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 11

12 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies 11.Identify deferral provisions on replacement property (voluntary and involuntary dispositions) 12 Term test # 2 Other Income, Other Deductions, Pension income splitting, Non-arm`s length transfers, Spousal rollovers - section 73 (inter vivos transfers to spouse), Electing out of section 73, Inadequate considerations - ITA 69, Death of a taxpayer: Deemed disposition and transfers to a spouse, Income Attribution rules All chapters and materials covered to date. Read Chapter 9 Begin Chapter 9 after term test. 1.Explain Other Income sources (maintenance and support payments, pension and annuity payments, retiring allowances and termination payments)and the proper tax treatment of each income source 2.Explain the principles relating to registered pension plans (RPP), registered retirement savings plans (RRSP), Tax Free Savings Account (TFSA), Registered Education Savings Plan (RESP), Registered Disability Savings Plan (RDSP) and other savings and sheltered plans and determine the contribution limits, transfer limits and deductions 3.Explain the rules regarding non-arm's length transfers of property and Section 69 provisions for Inadequate Considerations 4.Apply the attribution rules when property is transferred (depreciable and non-depreciable property and shares) to a spouse or commonlaw partner or minor children and to nonarm`s length individuals who are 18 years or older; 5.Explain the rules for the capital property of a deceased taxpayer including rollover provision to a spouse or common-law partner. Closed book Test# 2 Chapter 9-Lectures and Self-study exercises and Term test # 2 worth 15 % of Final Grade. Chapter 9-Self study and problems 13 Completion of Other Income and other deductions Chapter 9. 6.Apply the eligibility rules and limitations for the calculation of moving expenses, child care expenses and disability supports deduction 1.Explain Other Income sources (maintenance and support payments, pension and annuity payments, retiring allowances Quiz # 7- Chapter 9 Hand in THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 12

13 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies and termination payments)and the proper tax treatment of each income source 2.Explain the principles relating to registered pension plans (RPP), registered retirement savings plans (RRSP), Tax Free Savings Account (TFSA), Registered Education Savings Plan (RESP), Registered Disability Savings Plan (RDSP) and other savings and sheltered plans and determine the contribution limits, transfer limits and deductions 3.Explain the rules regarding non-arm's length transfers of property and Section 69 provisions for Inadequate Considerations 4.Apply the attribution rules when property is transferred (depreciable and non-depreciable property and shares) to a spouse or commonlaw partner or minor children and to nonarm`s length individuals who are 18 years or older; Global Equity and Equity. Use Profile Tax Software to complete a problem assigned by the instructor. Your submission must include a discussion of G.C. & E outcomes # 5 & #6. G.C. & E worth 5% of Final Grade. 14 FINAL EXAM (comprehensive) ALL CHAPTERS and materials discussed in class. 5.Explain the rules for the capital property of a deceased taxpayer including rollover provision to a spouse or common-law partner. 6.Apply the eligibility rules and limitations for the calculation of moving expenses, child care expenses and disability supports deduction n/a Closed Book Exam 50% of Final Grade. Two Part Exam. Part A (1st class) (20%) and Part B (2nd Class) (30%) THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 13