Course
Discontinued
Yes
Course Code
ACCT 3350
Descriptive
Income Tax
Department
Accounting
Faculty
Commerce & Business Administration
Credits
3.00
Start Date
End Term
201320
PLAR
No
Semester Length
15 weeks X 4 Hrs. per week = 60 Hrs.
Max Class Size
35
Contact Hours
Lecture 4 Hours per week
Method(s) Of Instruction
Lecture
Learning Activities
Lecture, demonstration and discussion. Students will be required to do selected assignments on a computer (outside of class).
Course Description
This course introduces the student to Canadian income tax concepts for both individuals and corporations. Topics include: the structure of the Income Tax Act, computation of income by source, deductions, net income, taxable income, and taxes payable. Students will be required to use a recognized income tax software program to prepare selected assignments. This is a very heavy course. Students are strongly advised to take ACCT 2310 or ACCT 2410 either concurrently or as a prerequisite.
Course Content
- Overview of Income Tax Act
1.1 History and structure of Income Tax Act
1.2 Taxable vs. non-taxable income
1.3 Liability for tax
1.4 Income sourcing; income aggregating
1.5 Total income vs. net income vs. taxable income - Preparation of Personal Income Tax Returns
2.1 Income from employment or office:
2.1.1 Wages, salaries, commissions, tips, etc.
2.1.2 Taxable and non-taxable benefits
2.1.3 Source deductions
2.1.4 Available deductions and limitations
2.2 Business (self-employed) income:
2.2.1 Professional, business, commissions, etc.
2.2.2 Available deductions and limitations
2.2.3 Reconciliation of accounting income to income for tax purposes
2.3 Capital cost allowance, eligible capital property:
2.3.1 Comparison to accounting amortization expense
2.3.2 Asset classes and rates
2.3.3 Rules for computations, including half-year rule
2.3.4 Recapture, terminal loss
2.4 Income from property, other income:
2.4.1 Rental income/expenses
2.4.2 Interest, taxable dividends
2.4.3 EI, WCB, social assistance
2.4.4 Pensions, RRSPs, other deferred income
2.5 Capital gains and losses:
2.5.1 Capital gains/losses vs. income gains/losses
2.5.2 Adjusted cost base.
2.5.3 Eligible capital property
2.5.4 Personal use property, listed personal property
2.5.5 Deemed dispositions
2.5.6 Principal residence rules
2.5.7 Exemption for family farms, small business shares
2.6 Computation of taxable income:
2.6.1 Deductions from total income (e.g. moving, child care and RRSPs)
2.6.2 Deductions from net income, including losses of other years
2.7 Computation of taxes payable:
2.7.1 Non-refundable tax credits
2.7.2 Federal and Provincial taxes payable
2.7.3 Dividend tax credit and other available credits
2.7.4 Federal and Provincial surtaxes, Provincial tax credits
2.8 Special cases and topics:
2.8.1 Tax planning, avoidance, evasion
2.8.2 Residency
2.8.3 Home Ownership Plan, Lifelong Learning Plan
2.8.4 Goods and Services Tax
2.8.5 Administration, assessment, enforcement of Income Tax Act
2.8.6 Allowable Business Investment Losses (ABIL) - Preparation of Corporate Tax Returns:
3.1 Calculation of taxable income for corporations:
3.1.1 Active vs. non-active business income
3.1.2 Investment income, dividend income (comparison to individuals)
3.1.3 T2 return and schedules required
3.2 Calculation of taxes payable:
3.2.1 Small business deduction
3.2.2 Federal tax abatement
3.2.3 Other credits, surtaxes
3.2.4 Part I and Part IV taxes payable
3.2.5 Refundable Dividend Tax on Hand (RDTOH); dividend refund - Use of Income Tax Software:
4.1 Demonstration of income tax program
4.2 Preparation of personal income tax returns and schedules using the income tax software
4.3 Preparation of a corporate income tax return and schedules using the income tax software - Special Topics in Taxation:
5.1 Taxation as a continually evolving system
5.2 Interpretation of existing and new tax legislation
5.3 Integration of corporate and personal taxes
5.4 Taxable vs. tax-free (capital) dividends
Learning Outcomes
At the end of the course, the successful student should be able to:
- Demonstrate the use of the Canadian Income Tax Act to solve various tax issues
- Prepare personal income tax returns and schedules with varying degrees of complexity
- Prepare corporate income tax returns and schedules
- Demonstrate the effective use of income tax software
- Demonstrate knowledge of special topics pertaining to both individual and corporate taxation
Means of Assessment
| Group Project | 05% |
| Computer assignments, using tax software | 08% |
| Other assignments and/or quizzes | 12% |
| Midterm Examination | 40% |
| Final Examination - Comprehensive | 35% |
| 100% |
STUDENTS MUST WRITE BOTH THE MIDTERM EXAMINATIONS AND THE FINAL EXAMINATION TO OBTAIN CREDIT FOR THE COURSE.
Textbook Materials
Textbooks and Materials to be Purchased by Students
Clarence Byrd and Ida Chen. Canadian Tax Principles, latest edition, Pearson Education Canada.
Income Tax Act, latest edition.
Any one of the following calculators:
- Texas Instruments BA II Plus
- Sharp EL 733A
- Hewlett-Packard 10B