ACCT 5327
Advanced Taxation
Fall, 2013
Instructor:
Robert Ricketts
Frank M. Burke Chair in Taxation
Director, School of Accounting, Rawls College of Business
Office:
BA E368
Phone/email:
834-3180
rricketts@ba.ttu.edu
Web Address:
http://rricketts.ba.ttu.edu
Required Text: CCH Federal Taxation Comprehensive Topics. Smith Harmelink, Hasselback,
2014 edition.
Course Objectives:
The objectives of this course are to conduct an in-depth analysis of the taxation of
corporations, partnerships and S corporations. We will begin the semester with an
overview of the income tax framework applicable to corporations, focusing on the
analysis and determination of the total tax paid on corporate income, and how tax
professionals structure transactions in order to minimize this total tax burden. We will
study special rules applicable to compensation of officers and employees and how those
rules affect corporate operations. We will also compare how corporate income is reported
to shareholders and to the IRS, reconciling the two sets of results and analyzing the
economic and political ramifications of the corporate income tax. We will then move to
an analysis of the tax costs associated with alternative business structures. The two
primary alternatives are partnerships and S corporations, each of which is subject to only
a single layer of income tax, paid at the investor level. By the end of the semester,
students will be able to recognize how different forms of organization are useful in
different economic circumstances, and how professionals plan transactions to minimize
taxes and maximize after-tax economic consequences to the business and its owners.
Learning Outcomes:
Upon successfully completing this course, students will be able to:
 Measure the tax consequences of formation of different types of business entities;
 Understand the differences in the tax costs associated with conducting a business
through a corporation, a partnership, or an S corporation;
 Recognize the differences in accounting for taxes for GAAP and tax reporting
purposes;
 Calculate the tax consequences of distributions from a business entity to its owners;
 Analyze the differences between alternative approaches to the acquisition, merger,
disposition, etc. of a business unit in a consolidated business activity; and
 Understand the life cycle of a business organization and explain how taxes affect the
structure of transactions at different stages of that life cycle.
Grading (Assessment):
Grades will be based on three examinations, a comprehensive income tax project, and a series of
group cases. Course activities will carry the following weights:
Regular Exams (2)
Final Exam – Comprehensive
Comprehensive Income Tax Project
Group Assignments
Total
200 points
100 points
75 points
75 points
450 points
To receive an A, you must accumulate 405 points; for a B, you must accumulate 360 points, 315
for a C and 270 for a D. Please note that the grading process is a mathematical calculation of the
components listed above. Extra credit is not available. All students will be graded equally and
fairly.
Academic Honesty:
Integrity is the cornerstone of the practice of accounting, and accounting students in the
Rawls College of Business do not cheat, nor do they tolerate cheating by their classmates.
Any student found cheating on any assignment in this class will receive an F for the
course. In egregious circumstances, I will pursue more substantial sanctions, up to and
including expulsion from the Honors College, the Rawls College of Business, and/or the
University. Do not test this policy. If you are unsure whether a particular behavior may
be construed as inappropriate, contact me before engaging in it. Integrity is a minimum
requirement for all students participating in accounting courses in the College of
Business. Those who lack it should not plan to enroll in subsequent accounting courses.
Disabling Conditions:
Any student who, because of a disabling condition, may require special arrangements in
order to meet course requirements should contact the instructor the first week of classes
to make necessary accommodations.
Civility in the classroom
The Texas Tech University Provost has asked that the following statement be included in
this syllabus:
“Students are expected to assist in maintaining a classroom environment which is
conducive to learning. In order to assure that all students have an opportunity to gain
from time spent in class, unless otherwise approved by the instructor, students are
prohibited from using electronic devices, challenging instructor’s authority, eating or
drinking in class, coming in late or leaving early, making offensive remarks, reading
newspapers, sleeping or engaging in any other form of distraction. Inappropriate behavior
in the classroom shall result in, minimally, a request to leave class.”
Religious Holidays
A student who is absent due to a religious holy day will be allowed to take an exam or
complete an assignment missed on that day.
Changes
I reserve the right to make changes in the syllabus, including changes in the number or
dates of assignments and exams. In particular, I reserve the right not to count scores on
assignments or exams in the event that the integrity of the assignment or exam is, or may
have been, compromised. Any changes in assignments or due dates will be announced in
class. It is the responsibility of each student to attend class and become aware of such
changes.
Revised Schedule
PART I: The Corporate Income Tax
Week
Date
Topic
08/27
Overview – The Double Taxation of Corporate
Income
Calculating the Corporate Income Tax
Regulatory uses of the corporate tax--§199
Stock Options—consequences for employees and
employers
Accounting for Book-Tax Differences
Reporting Book-Tax Differences to Investors –
1
2
3
4
5
6
08/29
09/03
09/05
09/10
09/12
09/17
09/19
09/24
09/26
10/01
10/03
Tax Consequences of Corporate Formation
Distributions to Shareholders—Dividends and
Constructive Dividends
Case 1
EXAM I
Assignment
Ch. 14, pp. 24-62
Regs. §1.199
Code & Regs., §§83, 421
ASC 743
ASC 718
Ch. 14, pp. 1-26
Ch. 15, pp. 1-21
PART II: Redemptions, Liquidations & Acquisitions
7
8
9
10
11
10/08
10/10
10/15
10/17
10/22
10/24
10/29
10/31
11/05
11/07
Stock Redemptions
Liquidating Distributions, generally
Liquidation of Subsidiaries
Corporate Reorganizations
Reorganizations Continued
Consolidated Returns
Consolidated Returns (cont.)
Book-tax Reconciliation in consolidated setting
EXAM II
Ch. 15, pp. 21-42
Ch. 16, pp. 1-21
Ch. 17, pp. 1-28
Ch. 17, pp. 28-38
PART III: Partnerships and S Corporations as Alternatives to Corporations
12
13
14
15
11/12
11/14
11/19
11/21
11/26
11/28
12/03
Partnerships—Taxation of Operations
Tax Consequences of Partnership Formation
Partnerships—Distributions of Cash & Property
Distributions—Special Rules
S Corporations—Overview
Thanksgiving Holiday
S Corporations—Distributions to Shareholders
FINAL EXAM
Ch 19, pp. 34-58
Ch 19, pp. 1-28
Ch 20, pp. 1-15
Ch 20, pp. 16-27
Ch 21, pp. 1-20
Ch 21, pp. 21-29