Fall 2015 PwC
August 31, 2015 to December 7, 2015
Professor: Joseph L. Keller
Office: ACC 118
Office Phone: (213) 740-4846
E-mail:
Class / Monday and Wednesday 11:00 AM –12:20 PM JKP 102
Office Hours / Monday and Wednesday 3:30 – 5:00 PM and by appointment
Course Description
In this course students are expected to achieve an understanding of the tax law as it relates to the taxation of corporations and their shareholders. This course covers a broad area of tax law and is designed to train students to recognize and solve corporate tax questions as they arise.The goal of this course is to teach prospective tax specialists to be knowledgeable in the application of tax principles impacting corporations and their shareholders.
Learning Objectives
Upon completing this course, the student will be able to:
1. Determine the tax consequences to each party of the formation of a corporation by analyzing case studies and solving problems
2. Distinguish between debt and equity by applying judicial criteria to various instruments
3. Calculate the amount of a corporate distribution that is taxable as a dividend by solving problems through application of applicable code sections
4. Distinguish between a redemption that can be treated as a sale or exchange and one that is taxed as a dividend by using the internal revenue code to solve problems
5. Determine the appropriate tax treatment of a liquidation by completing a written report on a case study
Required Materials
Schwarz and Lathrope, Fundamentals of Corporation Taxation, Eight Edition; *(Schwarz)Bittker and Eustice, Federal Income Taxation of Corporations and Shareholders, Seventh Edition (Student Edition);
*(B&E) (This is available online through RIA Checkpoint)
Federal Income Tax Code and Regulations, Selected Sections 2014-2015 Edition
Course Notes: Power point handouts will be posted in advance for each class on Blackboard
Grading Policy
There will be a Mid-term and Final Exam. This course follows the Leventhal School of Accounting and Marshall School of Business grading policies.
Make-up exams will be given only when a student has received approval from the instructor. The following points will be assigned for the determination of final grades:
Class participation 100
Problem Assignments 100
Research Paper 100
Mid-Term Examination 300
Final Examination: 300
Total 900
Notes on grading policy
- All assignments, exams, and class participation will be evaluated on effectiveness of your communication. This includes grammar, spelling, organization, format and the other essentials of strong and effective communication. All problems are to be the student’s individual work and any collaboration or sharing of answers will be considered a violation of the honor code.
- All assignments are due on the dates indicated on the course syllabus. Late assignments will receive a grade of ZERO.
- Class attendance is very important in developing a coherent view of the materials covered in the course. It is expected that each student will be prepared for each class and will participate through volunteering or by being called on to add to the discussion.
We adhere to the USC Leventhal School of Accounting and Marshall School of Business grading standards for graduate programs. In general, final course grades at the graduate level in a core course average approximately B+ (3.3), but may vary based on class performance. For elective courses, the class average is usually higher--approximating 3.5, which is between a B+ and an A-. You must receive a C or better to pass a required class, and you must have an overall B average (3.0 minimum) in order to graduate from USC.
PROGRAM LEARNING OUTCOMES:
The following are the five Student Learning Outcomes developed for this program by the USC Leventhal faculty and administration and filed with the AACSB, the accrediting body for accounting and business schools. . This course will deal primarily with learning outcomes #1 and #2, and to a lesser extent with learning outcomes #3 and #4.
1. Technical, Conceptual, Problem-Solving
Students will be competent in and be able to apply discipline-specific knowledge and skills in the fields of accounting or taxation. This learning outcome includes the development of critical thinking and problem-solving skills, as well as an understanding of the strategic role of accounting and taxation in business organizations and society.
•MBT specific—Apply critical thinking and problem-solving skills related to taxation of individuals, flow-through entities, and corporations. Recognize potential opportunities for tax savings and tax planning.
2. Professional Development
Students will be able to communicate clearly and strategically, after considering the relevant audience, situation, and purpose of the communication. Students will demonstrate the ability to work productively with others to accomplish established goals.
•MBT specific—Convert complex and technical tax terminology into language that translates to non-technical audiences. Demonstrate strong interpersonal communication skills that build relationships with clients over time. Document exchanges with careful attention to word choice, tone, and accuracy.
3. Research/Life-Long Learning
Students will be able to use relevant research databases and academic/professional literature to gain new knowledge and analyze business situations.
•MBT specific—Use computer-based and paper-based systems to thoroughly research tax codes, tax law, rulings and interpretations. Use knowledge to be able to adjust to changes in tax law over time.
4. Ethical Principles and Professional Standards
Students will be able to apply ethical principles and professional standards in analyzing situations and making informed decisions.
•MBT specific—Demonstrate understanding of and apply consistently the ethical principles and professional standards related to the profession. Show the ability to express and follow rules of independence and the highest sense of professional ethics.
5. Globalization and Diversity
Students will be able to demonstrate an international perspective and appreciation for diversity and cultural differences, along with their significance in global business.
•MBT specific—Explain key differences in taxing policies related to expatriates and the countries they live and work in. Reflect on cultural and ethnic differences in approaches to business and taxation policies.
ACADEMIC CONDUCT
Students enrolled in any class offered by the Leventhal School of Accounting are expected to uphold and adhere to the standards of academic integrity established by the Leventhal School of Accounting Student Honor Code. Students are responsible for obtaining, reading, and understanding the Honor Code System handbook. Students who are found to have violated the Code will be subject to disciplinary action as described in the handbook. For more specific information, please refer to the Student Honor Code System handbook, available in class or from the receptionist in ACC 101.
Plagiarism – presenting someone else’s ideas as your own, either verbatim or recast in your own words – is a serious academic offense with serious consequences. Please familiarize yourself with the discussion of plagiarism inSCampusin Section 11 Behavior Violating University Standards Other forms of academic dishonesty are equally unacceptable. See additional information inSCampusand university policies on scientific misconduct,
Support Systems
A number of USC’s schools provide support for students who need help with scholarly writing. Check with your advisor or program staff to find out more. Students whose primary language is not English should check with the American Language Institute which sponsors courses and workshops specifically for international graduate students.
The Office of Disability Servicesand Programs certification for students with disabilities and helps arrange the relevant accommodations.
If an officially declared emergency makes travel to campus infeasible,USC Emergency Informationwill provide safety and other updates, including ways in which instruction will be continued by means of blackboard, teleconferencing, and other technology.
Discrimination, sexual assault, and harassment are not tolerated by the university. You are encouraged to report any incidents to theOffice of Equity and Diversity to theDepartment of Public Safety,
This is important for the safety of the whole USC community. Another member of the university community – such as a friend, classmate, advisor, or faculty member – can help initiate the report or can initiate the report on behalf of another person.The Center for Women and Men 24/7 confidential support, and the sexual assault resource center webpage reporting options and other resources.
EMERGENCY INFORMATION
USC Emergencies: 213-740-4321
USC Public Safety—Non Emergencies: 213-740-6000
USC Emergency Information Line 740-9233
USC Information Line 740-2311
KUSC Radio 91
Paperwork Retention Policy
Returned paperwork, unclaimed by a student, will be discarded at the end of the semester. All graded paperwork, not returned, will be kept for one year.
INCOME TAX OF CORPORATIONS AND THEIR SHAREHOLDERS
ACCT 561T
FALL SEMESTER2015
PwC
SESSION / DATE / TOPIC / Reading AssignmentBittker and Eustice / Problem Assignment
Schwarz, Lathrope
Page #s
01 / 8/31 / Formation of a Corporation I / 3.01-3.04 & 3.07-3.09 / 60 & 67
02 / 9/2 / Formation of a Corporation II –Boot, Basis and Holding Period / 3.05 & 3.10-3.12 / 69
9/7 / Labor Day, university holiday
03 / 9/9 / Formation of a Corporation III
Assumption of Liabilities / 3.06 / 79
04 / 9/14 / Formation of a Corporation IV – Contributions to Capital / 3.13 / 98 #1* & #2*
05 / 9/16 / Formation of a Corporation V – Collateral Issues / 3-14 -3-21 / 108 & 113
06 / 9/21 / Capital Structure I
Classification Issues / 4.01-4.02 & 4.05 / 142 #1 & #2
07 / 9/23 / Capital Structure II
Section 1244 Stock / 4.03 / 147
08 / 9/28 / Overview of Corporate Taxation I
Choice of Entity/ Judicial Doctrines / 1.01-1.07
09 / 9/30 / Overview of Corporate Taxation II
Tax Rates/ Penalty Taxes / 5.01 & 5.05 –5.09
7.01 - 7.24 / 26
10 / 10/5 / Review
11 / 10/7 / Midterm
12 / 10/12 / Review of Midterm
13 / 10/14 / Non Liquidating Distributions I
Earnings and Profits / 8.01 & 8.04-8.05 / 158
14 / 10/19 / Non Liquidating Distributions II
Cash Distributions / 8.02–8.03
15 / 10/21 / Non Liquidating Distributions III
Constructive Distributions / 8.06 / 162*
16 / 10/26 / Non Liquidating Distributions IV
Property Distributions / 8.20 -8.23 / 167 & 181
17 / 10/28 / Stock Redemptions & Partial Liquidations I / 9.01
18 / 11/2 / Stock Redemptions & Partial Liquidations II
Constructive Ownership / 9.02 / 200 #1* & #2*
19 / 11/4 / Stock Redemptions & Partial Liquidation III
Substantially Disproportion Redemptions Treated As Sales / 9.03 - 904 / 204#2
20 / 11/9 / Stock Redemptions & Partial Liquidations IV
Section 303 Redemptions / 9.05-9.08 / 204 #1* & 221 #1
235 #1, #2 & #3
21 / 11/11 / Stock Redemptions & Partial Liquidations V
Section 304 Redemptions / 9.09 / 221 #2* 274 & 289
22 / 11/16 / Stock Redemptions & Partial Liquidations VI
Collateral Issues / 9.20 – 9.24 / 286 #2
23 / 11/18 / Stock Dividends / 8.40-8.42 / 303 #2 PAPER DUE
24 / 11/23 / 306 Stock / 8.60 – 8.65 / 303#1* 316 #1 & #2
11/25 / Thanksgiving Holiday
25 / 11/30 / Complete Liquidations / 10.00-10.08 / 322 & 335
26 / 12/2 / Subsidiary Liquidations / 10.20 - 10.24 / 347 #1 & #2 & # 3
27 / 12/7? TBD / Final Examination
NOTE:BE PREPARED TO DISCUSS YOUR SOLUTIONS TO ALL PROBLEMS IN CLASS.
IN ADDITION, THOSE PROBLEMS WITH AN *ARE INDIVIDUAL, NOT GROUP, PROBLEMS AND MUST BE TURNED IN ON BLACKBOARD PRIOR TO CLASS FOR GRADING.
Page | 1