ACC 455 Corporate Taxation Complete Course Material
ACC 455 Corporate Taxation
Complete Course Material
ACC 455 Week 1 Individual Tax
Return Position Paper
Suppose you have a
concern about taking a particular position on a tax return.
Write a 700- to 1,050-word paper that
discusses the following:
·
What are the primary
sources of tax law?
·
What are the secondary
sources of tax law?
·
What is substantial
authority?
·
What is the role of
the courts and the Internal Revenue Service in interpreting and applying the
sources of tax law?
Format your paper consistent with APA guidelines.
Discussion Questions
DQ 1 What business entities are available for
a new business? What are the tax and non tax advantages of each form? Select
two business types and provide an example of when that selection is most
appropriate from a tax perspective and from a non tax perspective.
DQ 2 Once a business has elected its tax
status using check-the-box regulations, what options are available if it needs
to change its tax status? What should a business consider before electing to
change its tax status?
DQ 3 Do the following decisions have the same
precedential value: (1) Tax Court regular decisions, (2) Tax Court memo
decisions (3) decisions under the small cases procedure of the Tax Court? Why?
ACC 455 Week 2 Individual
Assignment Problem Set
Complete the problems
found in Ch. 2 of Prentice Hall’s Federal Taxation 2010:
Corporations.
·
C:2-3 Black LLC
·
C:2-54 Bear
Corporation
C:2-55 Wildcat
Corporation
·
C:2-56 Tax Strategy
for Wildcat Corporation
Read the scenario and
respond to the questions.
Support your answers
with calculations, as needed.
Show your work.
Submit your completed
assignment as a Microsoft® Excel®, a Microsoft® Word, or a
PDF document.
ACC 455 Week 2 Discussion
Questions
The answers need to be
200-300 words and can have a citation, using APA 6th edition. The
text is Prentice Hall’s Federal Taxation 2010: Corporations, Ch. 3 and Ch. 5.
Week Two Starter Question 1:
o What are
the alternative tax years available to a corporation? What factors should be
considered in electing the tax year?
Week Two Starter Question 2:
o What
methods of accounting are available to a small business and to a large
business? If the business decides to make an accounting methods change, how is
this accomplished?
Week Two Starter Question 3:
o What are
the requirements for the following deductions: U.S. production activity
deduction, dividend received deduction, and net operating loss? Discuss any
recent legislative changes.
Week Two Starter Question 4:
o What is
the legislative intent behind the corporate alternative minimum tax (AMT)?
Define tax preference items, AMT adjustment, and minimum tax credit.
ACC 455 Learning Team
Week 3 Problem Set
Complete the problems
found in Ch. 3 & 5 of Prentice Hall’s Federal Taxation
2010: Corporations with your Learning Team.
·
C:3-3 Discussion
Question – Case Scenario on Tax Elections (Ch. 3)
·
C:5-8 Discussion
Question – Identify Items as AMT Adjustment or Preference (Ch. 5)
·
C:3-37 Problem –
Charitable Contributions of Property (Ch. 3)
·
C:3-64 Tax Form
/Return Preparation Problem – Knoxville Musical Sales Inc. Tax Return
Preparation (Ch. 3)
Read the scenario and
respond to the questions.
Support your answers
with calculations, as needed.
Show your work.
Submit your completed
assignment as a Microsoft® Excel®, a Microsoft® Word, or a
PDF document.
ACC 455 Week 3 Discussion
Questions
Here is the
instructors instructions for the discussion questions
·
·
Initial answers to
each Discussion Starter Question will be at least 200-300 words. Outside research may be necessary and
please include references and citations using APA 6th edition standards. I do
not count repeating the question or your signature block toward the 200-300 minimum word count for DSQ initial answers.
Discussion Starter Questions (DSQs) initial responses do count toward
participation, and are not mandatory. However, your responses to these DSQs
will help to start our more informal class discussions. As you reply to others’
initial DSQ responses by asking questions, adding ideas, making connections to
the readings, etc., you will be creating the substantive messages that will
also count toward your participation grade. Note: The participation requirement
for University of Phoenix, Online Campus students is that you must post eight
substantive messages over at least 3 days each week.
Meaning of Substantive
For this class, substantive means that your message has substance and helps to
further the discussion of course content. Substantive messages will often
include contributions of additional ideas and sources, insights or questions
about classmates’ comments, connections to the course readings, ways of
applying the lessons from the course, etc. As a rule of thumb, your substantive
comments should be at least several sentences in length. Short comments, such
as “Good idea” or “I agree,” do not constitute substantive posts on their own.
Neither do comments that are unrelated to the topics at hand (for example, “I
saw that movie, too!”) If you say you agree about something, please explain why
you agree, and add an additional insight or question. Tips for Creating
Substantive Participation:
·
Explain why you agree
or disagree, and add some examples to support your belief.
·
Relate your personal
or work experiences to the topic at hand.
·
Ask additional
questions of your classmates.
·
Make connections
between the topics at hand and the readings in the text. • Add ways you can
apply the lessons from the class in your work and educational life.
Week Three Discussion Question
One:
·
How does a corporation
compute earnings and profits (E&P)? What income is deferred to a later year
when computing taxable income but is included in E&P in the current year?
What deductions are allowed for taxable income purposes but denied for E&P?
Week Three Discussion Question
Two:
·
Distinguish between
current and accumulated earnings and profits. Why is it important to make this
distinction?
Week Three Discussion Question
Three:
·
The corporation owns a
building with a $160,000 adjusted basis and $120,000 fair market value. The
company has earnings and profits of $200,000. Is it more advantageous for the
company to sell the property and distribute the sales proceeds to its
shareholders or distribute the property to its shareholders and let them sell
the property? Why? If you were a shareholder, what would be most advantageous
to you?
Week Three Discussion Question
Four:
·
What is a stock
redemption? What are some reasons for redeeming stock? Why are some redemptions
treated as sales and others as dividends?
ACC 455 Week 4 Problem Set
C:6-5 Compare the tax consequences to the
shareholder and the distributing corporation of the following three kinds of
corporate distributions: ordinary dividends, stock redemption’s, and complete
liquidations.
Current E&P Computation.Water Corporation reports $500,000 of taxable
income for the current year.
The following
additional information is available:
·
For the current year,
Water reports an $80,000 long-term capital loss and no capital gains.
·
Taxable income
includes $80,000 of dividends from a 10%-owned domestic corporation.
·
Water paid fines and
penalties of $6,000 that were not deducted in computing taxable income
·
In computing this
year’s taxable income, Water deducted a $20,000 NOL carryover from a prior tax
year.
·
Water claimed a
$10,000 U.S. production activities deduction.
·
Taxable income
includes a deduction for $40,000 of depreciation that exceeds the depreciation
allowed for E&P purposes.
Assume a 34% corporate
tax rate. What is Water’s current E&P for this year?
Comparison of Dividends and
Redemptions.Bailey is one of four
equal unrelated shareholders of Checker Corp.
Bailey has held
Checker stock for four years and has abasis in her stock of $40,000. Checker
has $280,000 of current
and accumulated
E&Pand distributes $100,000 to Bailey.
1. What are the tax consequences to Checker and
to Bailey if Bailey is an individual and the distribution is treated
as a dividend?
1. In Part a, what would be the tax consequences
if Bailey were a corporation?
2. What are the tax consequences to Checker and
to Bailey (an individual) if Bailey surrenders all her stock in a redemption
qualifying for sale treatment?
3. In Part c, what would be the tax consequences
if Bailey were a corporation?
4. Which treatment would Bailey prefer if Bailey
were an individual? Which treatment would Bailey Corporation prefer?
ACC 455 Week 4 Discussion
Questions
Week Four Discussion Questions
Question one: – chapter 9
o
Sue and Bill plan to open an accounting firm and expect to work full time in
the firm. They expect to incur a small loss during their first year of
operation and expect to be profitable after the first year. What are the tax
law requirements for structuring the business as a partnership or an S
corporation? Which would you recommend and why?
Question two: – chapter 9
o
Bob and Dave plan to start a business. Bob will contribute land and Dave will
contribute services. Would you recommend this business be formed as a
partnership or as an S corporation? Why?
Question three: – chapter 11
o
The corporation owns a building with a $160,000 adjusted basis and $120,000
fair market value. The company has earnings and profits of $200,000. Is it more
advantageous for the company to sell the property and distribute the sales
proceeds to its shareholders or distribute the property to its shareholders and
let them sell the property? Why? If you were a shareholder, what would be most
advantageous to you?
Question four: – chapter 11
What is the difference
between a distribution and a distributive share? How do these affect the
owner’s K-1 and individual taxes?
ACC 455 Week 5 Problem
Week 5 problems for me to do.
C:9-32 Partnership
Income and Basis Adjustments. Mark and Pamela are equal partners in MP
Partnership. The
partnership, Mark, and Pamela are calendar year taxpayers. The partnership
incurred the following
items in the current year:
Sales $450,000
Cost of goods sold
210,000
Dividends on corporate
investments 15,000
Tax-exempt interest
income 4,000
Section 1245 gain
(recapture) on equipment sale 33,000
Section 1231 gain on
equipment sale 18,000
Long-term capital gain
on stock sale 12,000
Long-term capital loss
on stock sale 10,000
Short-term capital
loss on stock sale 9,000
Depreciation (no Sec.
179 or bonus depreciation components) 27,000
Guaranteed payment to
Pamela 30,000
Meals and
entertainment expenses 11,600
Interest expense on
loans allocable to:
Business debt 42,000
Stock investments
9,200
Tax-exempt bonds 2,800
Principal payment on
business loan 14,000
Charitable
contributions 5,000
Distributions to
partners ($40,000 each) 80,000
1. Compute the partnership’s ordinary income and
separately stated items.
2. Show Mark’s and Pamela’s shares of the items
in Part a.
3. Compute Mark’s and Pamela’s ending basis in
their partnership interests assuming
their beginning
balances are $150,000 each.
C:10-1 Javier is retiring from the JKL Partnership.
In
January of the current
year, he has a $100,000
basis in his
partnership interest when he receives a
$10,000 cash distribution.
The partnership plans
to distribute $10,000
each month this year, and
Javier will cease to
be a partner after the December
payment. Is the
January payment to Javier a current
distribution or a
liquidating distribution?
ACC 455 Week 5 Discussion
Questions
Week 5 Discussion
Questions
Question one:
·
What is a liquidating
distribution? What is a non liquidating distribution? Provide an example of
each.
Question two:
·
What is an inadvertent
termination of an S election? How does an S corporation and its shareholders
rectify an inadvertent termination? What could happen if a company fails to
rectify the termination?
Question three:
·
What events will cause
an S election to terminate? What would you recommend S corporations do to plan for
an orderly termination of an S election?
Question 4:
·
A C corporation has
incurred substantial losses and the owners have decided to close the business.
What considerations should the owners make in this termination? Should they
consider making an S election and then later, terminating the S corporation? If
you were their tax advisor, what would you recommend?
ACC 455 Week 5 Mini Questions
Week 5 mini-questions
Javier is retiring
from the JKL Partnership. In January of the current year, he has a $100,000
basis in his partnership interest when he receives a$10,000 cash distribution.
The partnership plans to distribute $10,000 each month this year, and Javier
will cease to be a partner after the December payment. Is the January payment
to Javier a current distribution or a liquidating distribution?
·
Lia has a $40,000
basis in her partnership interest just before receiving a parcel of land as a
non-liquidating (current) distribution. The partnership purchased the land, and
Lia has no pre – contribution gain. Under what conditions will Lia’s basis in
the land be $40,000? Under what conditions will Lia’s basis in the land be a
carryover basis from the partnership’s basis in the land?
Interest before
receiving a non-liquidating (current) distribution of property having a $4,500
basis and a $6,000 FMV from the CDE Partnership. Cindy has a choice of
receiving either inventory or a capital asset. She will hold the distributed
property as an investment for no more than two years before she sells it. What
tax difference (if any) will occur because of Cindy’s selection of one property
or the other to be distributed by the partnership?
Mariel has a $60,000
basis in her partnership interest just before receiving a parcel of land as a
liquidating distribution. She has no remaining pre-contribution gain and will
receive no other distributions. Under what conditions will Mariel’s basis in
the land be $60,000?
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