ACC 268 - Business Tax

1. Define a corporation for Federal income tax purposes
   1. Identify the alternative forms of doing business
   2. Compare and contrast corporate and individual taxation
   3. Compute the corporate tax, including the tax for personal service corporations
   4. Describe the corporate tax forms and filing requirements
2. Explain the basic tax consequences of forming a new corporation
   1. Determine the gain or loss recognized by the shareholder and the corporation
   2. Determine the basis of the shareholder’s stock in the corporation
   3. Determine the corporation’s basis in property received
   4. Describe the requirement for qualifying a transfer to a corporation for tax-free treatment
   5. Explain the tax consequences of transferring property to an existing corporation
   6. Explain the effects of transferring liabilities to corporations
   7. Describe special problems involved in computing depreciation of assets transferred to corporations
   8. Explain the effect of contributions to capital by shareholders and nonshareholders
   9. Identify the tax considerations in determining whether the corporation’s capital structure should be stock or debt
3. Explain tax effect of a corporation distribution on shareholders and distributing corporation
   1. Define a dividend for tax purposes
   2. Compare the concept of retained earnings with concept of earnings and profit
   3. Explain how earnings and profits are calculated
   4. Identify the special problems related to distributions of property
   5. Identify a constructive distribution
   6. Explain the tax consequences of a stock dividend
4. Define a redemption
   1. Distinguish a redemption from other types of nonliquidating distributions
   2. Explain when a redemption is treated as a sale rather than a dividend
   3. Apply the constructive stock ownership rules to determine effect of redemption
   4. Identify the tax consequences of a redemption to shareholders
   5. Calculate the effect of redemption on shareholder taxable income
   6. Calculate the shareholder’s basis in any property received in a distribution
   7. Determine the effect on basis of any stock held by shareholder not redeemed.
   8. Identify tax consequences of a redemption to distributing corporation
   9. Calculate the effect on the corporation’s taxable income related to redemption
   10. Calculate the effect of redemption on corporation’s earnings and profits
   11. Describe the tax treatment
5. Describe a distribution in complete liquidation
   1. Distinguish between a liquidating and nonliquidating distribution
   2. Explain reasons for liquidating a corporation
   3. Determine the tax consequences of a liquidation to shareholder and liquidating corporation
   4. Discuss the special rules when a parent corporation liquidates a subsidiary
6. Explain the penalty taxes on corporate accumulations
   1. Discuss the rationale for two corporate penalty taxes
   2. Identify the circumstances that must exist before the accumulated earnings tax will apply
   3. Identify when earnings have accumulated beyond the reasonable needs of the business
   4. Explain how the accumulated earnings tax is computed
   5. Identify when the personal holding company tax applies
   6. Apply the stock ownership and income test to determine if a corporation is a personal holding company
7. Describe the seven different types of reorganizations
   1. Describe requirements for nontaxable treatment of a reorganization
   2. Discuss the tax treatment of acquiring corporation, the target corporation, and the target’s shareholder
   3. Explain the rules governing the carryover of the tax attributes from the corporation to another
8. Determine the tax consequences of various transactions between a partner and a partnership
   1. Define for federal income tax purposes the terms partner and partnership
   2. Distinguish entity theory and aggregate theory of partnerships
   3. Explain the role of partnership agreements
   4. Identify the tax consequences of a partner’s contribution of assets or services to a partnership
   5. Describe the tax consequences related to a gain or loss by a partnership upon the exchange of a partnership interest for cash, property, or services contributed by a partner
   6. Compute the partners’ bases in new partnership
   7. Computer partnership’s basis in contributed assets
   8. Determine the effect of partnership liabilities on the partners’ bases in the partnership interests
   9. Compute partnership taxable income or loss
   10. Identify any separately computed items of partnership income, gain, loss, deduction, or credit
   11. Explain how partners report results of partnership operations on individual returns
   12. Compute the three potential limitations on the current deductibility of a partner’s distribute share of partnership loss
9. Analyze the tax consequences of a sale of a partnership interest to both the seller and purchaser
   1. Distinguish between a current and a liquidating distribution from a partnership
   2. Determine the tax consequences of both current and liquidating distribution
   3. Explain the function of para 736 as it applies to liquidating distributions
   4. Compute the amount of any para 736 payment included in a distribution
   5. Apply the family partnerships rules to partnership interests created by gift
10. Identify the requirements necessary to select S status
    1. Identify the actions that terminate S status
    2. Compute the net operating income or loss for an S corporation
    3. Determine the impact of S corporate operations on shareholders’ taxable income
    4. Identify transactions between shareholders and their S corporations subject to special treatment
    5. Determine the shareholder’s basis in the S corporate stock
    6. Determine the appropriate taxable year for an S corporation
    7. Calculate the gain or loss for the S corporation and its shareholders when assets distributions are made and S corp. has no AE & P
11. Describe the process in which Federal tax law is enacted
    1. Explain how tax law is subsequently modified or evaluated by the judiciary
    2. Identify the source of various administrative and judicial tax authorities
    3. Discuss the importance of communicating the results of tax research
12. Discuss the AICPA’s Statement on Responsibilities in Tax Practice
    1. Identify the conditions that may result in an IRS audit
    2. Explain the IRS audit procedures, including the procedures for proposed audit adjustments
    3. Explain the procedures for appealing an adverse audit outcome
    4. Determine the statute of limitations for assessments, collections, and refund claims
    5. Explain the rules for practice before the IRS