William Paterson University Christos M. Cotsakos College of Business (CCOB) Department of Accounting & Law Regulation: Taxation - Syllabus, FALL 2009

1. Course Title & Number: Regulation: Federal Taxation - ACCT 740

2. Course Description: This is an intensive MBA course geared towards students committed to taking the CPA examination. The course provides a study of the U.S. Internal Revenue Code with emphasis on income taxation of individuals and entities. The course looks at tax-minimizing decision making of individuals and business managers. The course is a practical study of federal income taxes and estate and gift taxes and emphasizes research techniques and tax planning principles; it provides practice in the preparation of tax returns and solution of case problems.

3. Course Prerequisite: ACCT606, Financial and Managerial Accounting or equivalent

4. Professor: Dr. Elizabeth C. Ekmekjian, Esq., CPA

5. Office and Office Hours: Valley Road Room 4063 Hours: Monday: 5:45-7:00pm Tuesday: 8:30-9:30am Additional hours available by appointment

6. Telephone & e-mail: Telephone # 973.720.3851 E-mail Address [email protected] - Best way to reach me!

Department Secretary Ruthina Babb Telephone # 973.720.2435 E-mail Address [email protected]

7. Required Text: West's Federal Taxation, 2010 Edition, Comprehensive Volume (Willis, Hoffman, Maloney, Raabe). DO NOT BUY A PRIOR EDITION TEXT.

8. Supplemental References: Tutorials, interactive chapter quizzes and other study materials are at: http://websites.swlearning.com/cgi-wadsworth/course_products_wp.pl? fid=M20b&flag=student&product_isbn_issn=9780324828610&disciplinenumber=419

Internal Revenue Code (IRC) and Regulations

9. Course Objectives: 1. To evaluate currently held beliefs on taxation.

1 2. To identify the criteria for evaluating a tax structure. 3. To critically judge proposed systems of U.S. taxation. 4. To explain the reasoning behind the complexity of the IRC. 5. To apply the components of the Federal Income Tax formula. 6. To explain the concepts of gross income and realization. 7. To distinguish between economic, accounting, and tax concepts of gross income. 8. To identify the circumstances under which various items are excludible from gross income. 9. To apply the IRC deduction and deduction disallowance provisions. 10. To distinguish between deductible and nondeductible losses of individuals. 11. To identify opportunities for deducting certain business expenses. 12. To perform ACRS, MACRS, and ADS depreciation calculations. 13. To recognize employee business expenses. 14. To identify itemized deductions and perform limitation calculations. 15. To explain passive activity and at-risk limitation rules. 16. To identify available tax credits and explain how tax credits are used as a tool of Federal tax policy. 17. To distinguish between refundable and nonrefundable credits. 18. To perform computation of realized gain or loss on property dispositions. 19. To explain the importance of basis and how basis is determined for various methods of asset acquisitions. 20. To apply the nonrecognition provisions and basis determination rules for like-kind exchanges. 21. To explain the difference between capital assets and ordinary assets. 22. To compute tax on capital gains. 23. To explain the rationale for the alternative minimum tax (AMT). 24. To integrate rules of individual taxation. 25. To prepare an individual tax return. 26. To distinguish between the statutory, administrative and judicial sources of tax law and explain each source’s relative weight of authority. 27. To locate appropriate tax law sources. 28. To identify and apply tax research procedures (manual and electronic). 29. To communicate results of tax research in a client. 30. To compare, contrast and evaluate the various forms of conducting a business. 31. To explain the tax rules unique to corporations. 32. To compute the corporate income tax. 33. To identify the tax consequences of incorporating a business. 34. To apply the basis rules relevant to shareholders and corporations. 35. To recognize the tax differences between debt and equity investments. 36. To identify the tax consequences of corporate reorganizations. 37. To prepare a corporate tax return. 38. To understand the nature of the Federal gift and estate taxes. 39. To compute the Federal estate tax. 40. To utilize oral and written communication skills.

10. Student Learning Outcomes: 1. Understand the basic concepts, principles, and methods of individual income taxation, corporate income taxation and the Federal estate tax. 2. Students must be able to demonstrate application of 1. above by preparing an individual income tax return and a corporate income tax return.

2 3. Develop analytical and communication skills via problem solving, written assignments and examinations.

11. Topical Outline of Course Content: See last page of syllabus.

12. Teaching Methods: As an intensive MBA course targeted at highly motivated students who intend to take the CPA examination, this class will be very demanding, challenging, and time-consuming. Students must study the topic in advance and understand the tax concepts and principles before class. Class lectures will be devoted not to the basics of the subject matter, but to the complicated logical analysis of the issues and how to solve difficult problems, as seen in the CPA exam. The content of most chapters will be supplemented by sections of the IRC and Regulations and will be covered by a detailed review of take- home quizzes. This course requires a very significant time commitment. It is imperative that students attend class, complete all assigned work on a timely basis and actively participate in class discussions.

On the first day of class, for example, we will cover the federal income tax return, Form 1040. At the end of class, I will spend 15-30 minutes providing you with an introduction into the next topic. I will give you a reading and homework/quiz assignment. You are expected to read the chapter and do the homework/quiz prior to our next meeting. At the beginning of the next class, I will answer any questions about the material in general. After the Q&A session, I will collect the homework/quiz assignment. We will then review the assignment. At the end of class, I will provide you with an introduction into the following weeks topic and so on.

QUIZZES: Generally, prior to the discussion of each topic, students will receive a take home quiz. The quiz is open note-book and text book. Consultation among students is permitted and even encouraged. However each student is responsible for his/her own final submission; written responses should be individual to each student. This means that if a student creates a word document containing his/her own responses, a second student can not simply put his/her own name on the same file and hand it in for submission. This is cheating and both students will receive failing grades. The quizzes will consist of objective and simulation questions. Answers to objective questions MUST be followed by an explanation for the response. The questions will be taken from or similar to previous CPA exam questions. Each student is encouraged to print two copies of the completed quiz; one copy will be handed in and the second copy will be kept by the student and utilized in classroom discussions. 13. Course Expectations/Policies (IMPORTANT! PLEASE READ!): a. Assignments:  Any assignment that is more than one page must be stapled.  All written assignments (except for tax returns and tax formula calculations) must be typed.  Do not use a tax software program to prepare any tax return assignments unless instructed to do so. b. LATE ASSIGNMENTS/EXAMS: Late assignments will not be accepted. If you are going to be absent from a class, you should e-mail your assignment to me no later than the start- time of the class you are missing. c. FAILURE TO FOLLOW INSTRUCTIONS ON ASSIGNMENTS/EXAMS: A five percent penalty will be assessed. EXAMPLE: If you forget to staple your exam you will be assessed a 5 percent penalty! d. Class attendance, punctuality, interest and involvement are all perceived by the instructor to be important for satisfactory completion of this course. No more than 2 absences will be

3 permitted without proper consultation with the instructor. Failure to comply may result in a final letter grade reduction. e. It is your responsibility to make sure that you have signed in each day. This must be done during class; NO EXCEPTIONS WILL BE MADE. f. Distractive practices, such as, tardy entrances, leaving the room while class is in session, excessive conversation with other students and conducting activities unrelated to class discussions are not considered acceptable behavior. g. No makeup quizzes or exams will be given. h. Cheating Policy: A student caught cheating (including plagiarizing) will be given a zero (0) for such exam or assignment. Any further action will be taken in accordance with University policy. i. If class must be cancelled for any reason, this information will be sent via e-mail to you at your WPU student e-mail address. Please check your e-mail. j. In the event that you miss class, please DO NOT contact me for missed assignments. It is your responsibility to find out what material was covered and all homework/exam assignments. k. Be prepared. Please bring a calculator, pencils, etc. to each class and exam. l. NO CELL PHONES OR PAGERS PLEASE! If one goes off in class, be prepared to sing your favorite song and entertain your classmates!

14. Grading: The following grade distribution will be used: A 100-92 B 85-82 C 75-72 A- 91-89 B- 81-79 C- 71-65 B+ 88-86 C+ 78-76 F 64-0

15. Methods of Student Assessment: *SUBJECT TO CHANGE* a. Tax Return Projects & Other Projects 10% b. Quiz and homework assignments 40% b. Exams (mid-term: Individual taxation, final: entities) 50% 20% TOTAL 100% *I DO NOT give extra credit assignments to boost your grade, so study hard and be prepared.

4 The CPA Exam

Federal income taxation is tested on and makes up about approximately 60% of the Regulation section of the CPA exam. Of this 60%, the following areas are tested:  Individuals – 12-18%  Entities (partnerships, corporations, gift & estate) – 22-28%  Tax procedures and accounting issues (indiv. & entities) – 8-12%  Property transactions – 8-12%. Additional tax issues also appear in the regulation section of the exam under the following topics: “Ethics/Professional and Legal Responsibilities” (ethics and responsibilities in tax practice) and “Business Law” (legal liability for payroll and SS taxes). These additional tax matters will NOT be covered in this course.

Course Coverage

This material will be covered and tested in class as follows:  Part 1: Weeks 1-6 (9/9 through 10/12) – individuals and property transactions  Part 2: Week 7 (10/19) – tax research o Week 8 (10/26) – exam on materials in Parts 1 and 2  Part 3: Weeks 8-14 (10/26 through 12/7) – entities, procedures/tax administration and accounting issues o Week 15 (12/14) – cumulative exam with focus on materials in Part 3

Homework, quiz and test problems will emulate the CPA Exam and include multiple-choice questions and simulations.

Course Outline

Weeks 1 through 8

Individual Income Taxation Tax Formula for Individuals Individual Tax Return – Form 1040 and supporting schedules Gross Income Above the Line Deductions (Deductions FOR AGI) Below the Line Deductions (Deductions FROM AGI) Itemized Deductions or Standard Deduction Exemptions Tax Computation Tax Credits/Estimated Tax Payments Filing Requirements Tax Procedures Sources of Federal Tax Authority – including Tax Research

Property Transactions Sales and Other Dispositions Capital Gains & Losses Personal Casualty and Theft Gains & Losses Gains and Losses on Business Property

5 Weeks 8 through 14

Partnership Taxation Partnership Tax Return – Form 1065

Corporate Taxation Corporate Tax Return – Form 1120 S-Corp. Tax Return – Form 1120S

Gift & Estate Tax Generation-Skipping Tax Income Taxation of Estates & Trusts Income Tax Return Preparers

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