Academic Catalog

ACTG 68A: ADVANCED TAX ACCOUNTING I

Foothill College Course Outline of Record

Foothill College Course Outline of Record
Heading Value
Units: 5
Hours: 5 lecture per week (60 total per quarter)
Prerequisite: ACTG 67.
Advisory: Elementary Algebra or equivalent; demonstrated proficiency in English by placement via multiple measures OR through an equivalent placement process OR completion of ESLL 125 & ESLL 249.
Degree & Credit Status: Degree-Applicable Credit Course
Foothill GE: Non-GE
Transferable: CSU
Grade Type: Letter Grade (Request for Pass/No Pass)
Repeatability: Not Repeatable

Student Learning Outcomes

  • Identify basics of Federal and California income tax law as it relates to Sole Proprietorships and Partnerships.
  • Demonstrate practical knowledge of income tax form preparation and tax compliance process as these relate to sole proprietorships and partnerships.

Description

Current federal income tax law as it relates to sole proprietorship and partnership.

Course Objectives

The student will be able to:
A. describe and explain the tax consequences related to and prepare business income tax returns for proprietorship.
B. describe and explain the tax consequences related to and prepare business income tax returns for partnerships.

Course Content

A. Business Entity Types, Accounting/Tax Methods, and Periods
1. Business Entities – available forms of doing business
2. Tax Accounting Methods: Cash, Accrual, Hybrid
3. Accounting Method Change: rules and procedures
4. Accounting Periods: acceptable for various entities, short periods
5. Accounting Period Change: rules and procedures
B. Sole Proprietorship Income
1. Gross business income
2. Cost of goods sold (e.g., inventory practices, expenditures included, uniform capitalization rules)
3. Net income, net operating losses, and loss limitations including passive activity and at risk limitations
4. Gain or loss on disposition of depreciable property
5. Cancellation of business debt
C. Business Expenses, Deductions and Credits
1. Employees' pay (e.g., deductibility of compensation, fringe benefits, rules of family employment, statutory employee, necessary and reasonable)
2. Reporting requirements for contractors and employees (e.g., W-2, W-4, Form 1099)
3. Business rental deduction
4. Business bad debts
5. Business travel, entertainment, and gift expenses
6. Interest expense
7. Insurance expense
8. Taxes (e.g., deductibility of taxes, assessments, and penalties; proper treatment of sales taxes paid)
9. Employment taxes
10. Federal excise tax
11. Casualties, thefts, and condemnations
12. IRC section 199 deduction (domestic production activities)
13. Eligibility and deductibility of general business credits (e.g., disabled access credit, investment credit)
14. Alternative minimum tax net operating loss deduction
15. Home office
16. Preparation of Form 1040 Schedule C Profit or Loss from Business (Sole Proprietorship)
D. Tax Depreciation & Amortization
1. Depreciation Methods
2. Useful life
3. Methods of computing
4. Changing depreciation methods
5. Sec. 179 Expense
6. Additional first year "bonus" depreciation
7. Retirement of depreciated property
8. Depreciation recapture
9. Amortization
10. Preparation of Tax Form 4562 Depreciation and Amortization
E. Depletion and mine exploration development
1. Cost depletion
2. Percentage depletion
3. Exploration and development
F. Business Assets/Property Transactions
1. Basis of assets
2. Disposition of depreciable property
3. Sec. 1231, 1245 & 1250 assets
4. Like kind exchanges
5. Installment sales
6. Deferred payment sales
7. Repossession of real and personal property
8. Preparation of Tax Form 4797 Sales of Business Property
G. Partnerships
1. Partnership Defined
2. Filing Requirements
3. Contributions to a Partnership
4. Partnership Interest
5. Partnership Operations and Partner's Taxable Income
6. Distribution of Partnership Assets
7. Partners Dealing with Their Own Partnership
8. Sale of Partnership Interest
9. Liquidating Distributions
10. Preparation of Tax Form 1065 U.S. Return of Partnership Income
11. Preparation of Tax Schedule K-1 Partner's Share of Income, Deductions, Credits, etc.

Lab Content

Not applicable.

Special Facilities and/or Equipment

Access to spreadsheet, word-processing, presentation software. When taught as an online distance learning section, students and faculty need ongoing and continuous Internet and email access.

Method(s) of Evaluation

A. Examinations
B. Quizzes
C. Projects
D. Tax Return preparation

Method(s) of Instruction

Lecture, in class or electronic discussions, group work, case studies.

Representative Text(s) and Other Materials

Hoffman, William, David Maloney, William Raabe, and James Young. South-Western Federal Taxation 2016: Comprehensive Volume with H&R Block At Home tax software and Thomson Reuters Checkpoint Access. Cengage Learning, 2016.

Gleim, Irvin, and James Hasselback. GLEIM EA Review Part 2 Businesses 2016. Gleim Publications, Inc., 2016.

 

Types and/or Examples of Required Reading, Writing, and Outside of Class Assignments

A. Reading IRS Tax Publications and Form Instructions at http://www.irs.gov

B. Reading California Publications and Form Instructions at http://www.ftb.ca.gov

C. Reading the latest Federal Tax updates at the IRS website

D. Reading the latest California Tax updates at the CA FTB website

E. Reading Internal Revenue Tax Code and Regulations

F. Reading of Wall Street Journal, Business Week, and Fortune

 

Discipline(s)

Accounting