Maricopa Community Colleges  FIN125   19946-99999 
Official Course Description: MCCCD Approval: 05/24/94
FIN125 19946-99999 LEC 3 Credit(s) 3 Period(s)
Tax Planning and Management
Principles of tax planning and management, including the study of tax law, terminology and calculation; tax implications of selecting a particular form of business; tax-advantaged investments; tax planning techniques; intrafamily and charitable transfers; and tax traps. Prerequisites: FIN110.
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MCCCD Official Course Competencies:
 
FIN125   19946-99999 Tax Planning and Management
1. Explain the basic principles of insurance policy taxation. (I)
2. Describe the fundamentals of income taxation. (II)
3. Describe tax computations and concepts. (III)
4. Describe tax planning techniques. (IV)
5. Explain tax hazards and penalties. (V)
6. Describe estate planning considerations and constraints. (VI)
7. Demonstrate tools and techniques for general estate planning. (VII)
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MCCCD Official Course Outline:
 
FIN125   19946-99999 Tax Planning and Management
    I. Basic principles of insurance policy taxation
        A. The Internal Revenue code definition of life insurance
        B. Tax implications of owning individual life insurance
        C. Tax implications of owning individual medical and disability insurance
        D. Tax treatment of employee benefits
      II. Fundamentals of income taxation
          A. Ethical considerations in tax planning and management
            1. Privileged communications
            2. Tax evasion
          B. Tax law research
            1. Steps in research process
            2. Primary sources of tax law
            3. Secondary sources of tax information (tax services, newsletters)
          C. The audit process
            1. Definition and common audit discriminators
            2. IRS audit process
          D. Taxation terminology
          E. Tax-generated economic value
        III. Tax computations and concepts
            A. Tax calculations
              1. Gross (total) income
              2. Adjusted gross income
              3. Itemized deductions
              4. Taxable income
              5. Tax liability
            B. Tax accounting
              1. Cash method
              2. Accrual method
              3. "Hybrid" method
              4. Long-term contracts
              5. Installment sales
              6. Accounting periods
            C. Tax and non-tax characteristics of business forms
              1. Sole proprietorship
              2. Partnership
              3. Corporations
              4. Trusts
              5. Tax-exempt organizations
            D. Basic and cost recovery concepts
              1. Original basis rules
              2. Adjustments to basis
            E. Concepts of property dispositions
              1. Determination of gain or loss
              2. Characterization of gain or loss
              3. ITC recapture
            F. Calculate capital gains and losses
              1. Netting rules
              2. Capital loss rules
          IV. Tax planning
              A. Tax management techniques
                1. Deferral and acceleration
                2. Maximization of exclusions and credits
                3. Managing loss limitations
                4. Minimization of rates
                5. Capital asset transactions
                6. Minimizing (or re characterizing) non-deductible expenditures
              B. Employee benefits
                1. Group term life insurance
                2. Health and accident plans
                3. Meals and lodging
                4. Death benefit
                5. Section 132 benefits
                6. Qualified plans
                7. Non-qualified plans
                8. Entity considerations
                9. Perquisites and other benefits
              C. Like-kind exchanges
                1. Basic provisions
                2. Basic computations
              D. Dispositions of personal residence
                1. Section 1034 rollover
                2. Section 121 exclusion
              E. Installment sales
                1. Basic provisions
                2. Special rules (e.g., cost recovery recapture; second disposition rule)
              F. Direct participation programs (DPP)
                1. Investment in flow-through entities
                2. Specific tax advantages from DPP
                3. Factors limiting tax advantages
              G. Passive activity loss rules
                1. General provisions
                2. Specific exceptions and provisions
              H. Investment interest expenseÐgeneral provisions
              I. Tax implications of securities
                1. Stocks
                2. Bonds
                3. Mutual funds
                4. Options
              J. Tax impact on time value analysis of investments
                1. Net present value concepts
                2. Internal rate of return
                3. Risk
              K. Tax implications of life insurance and annuities
                1. Types of life insurance
                2. Annuities
              L. Infra family transfers
              M. Charitable contributions
                1. Basic provisions
                2. Alternative minimum tax considerations
              N. Tax implications of marriage dissolution
                1. Alimony
                2. Child support
                3. Personal exemption
                4. Property settlement
              O. Non-qualified deferred compensation
                1. Recognition: requirements necessary to defer recognition
                2. Types of plans
              P. Qualified plans
                1. Pension plans
                2. Deferred compensation
            V. Hazards and penalties
                A. Alternative minimum tax (AMT) concepts
                  1. Basic provisions
                  2. Planning opportunities
                B. Social security self-employment tax
                  1. Basic provisions
                  2. Special provisions for family members
                C. Home office and vacation home rules
                D. Penalty taxes and other tax traps
                  1. Penalty taxes
                  2. Common tax traps
                E. Tax penalties
                  1. Failure to file
                  2. Fraud
                  3. Negligence
                  4. Preparer
                  5. Substantial over-valuation
                  6. Substantial under-valuation
                  7. Underpayment penalty and planning to avoid
              VI. Estate planning considerations and constraints
                  A. Overview of the Federal Unified Tax System
                    1. Unified transfer tax system
                    2. Generation-skipping transfer tax
                  B. Federal gift taxation
                    1. Basic concepts
                    2. Techniques for managing gift tax liability
                    3. Analysis and calculation of federal gift tax liability
                  C. Federal gross estate
                    1. Inclusions in a decedent's gross estate
                    2. Exclusions from a decedent's gross estate
                  D. Valuation techniques and the Federal gross estate
                    1. Valuation of specific property interests
                    2. Valuation techniques
                  E. Federal estate tax deductions
                    1. Identification of items deductible from the gross estate to calculate the adjusted gross estate
                    2. Identification of items deductible from the adjusted gross estate to calculate the taxable estate
                  F. Calculation of Federal estate tax liability
                    1. Identification of the steps to calculate the total estate tax
                    2. Additional factors affecting the estate tax calculation
                  G. Characteristics and tax aspects of property interests
                    1. Title forms
                    2. Other interests
                    3. Advantages and disadvantages of forms of property interests
                    4. Taxation aspects
                    5. Recommendation and justification of the most appropriate form of property interests
                VII. Tools and techniques for general estate planning
                    A. Taxation of trusts and estates
                      1. Income tax implications of trusts
                      2. Federal gift tax implications of trusts
                      3. Federal estate tax implications of trusts
                      4. Income tax implications of estates
                      5. Recommendation and justification of the most appropriate trust
                    B. Life insurance for estate planning
                      1. Characteristics of life insurance
                      2. Advantages and disadvantages of specific life insurance techniques in estate planning
                      3. Life insurance trust
                      4. Ownership, beneficiary designation and settlement options
                      5. Income, gift and estate taxation of life insurance
                      6. Recommendation and justification of the most appropriate life insurance technique
                    C. Gifts
                      1. Suitability of gifts for client and recipient
                      2. Legal techniques for gift-giving
                    D. Taxation of gifts
                      1. Income taxation of lifetime transfers
                      2. Federal gift taxation of lifetime transfers
                      3. Federal estate taxation of lifetime transfers
                      4. Calculation and analysis of the effect of a lifetime gift program
                    E. Recommendation and justification of the most appropriate property to give as a gift
                      1. The most appropriate property to give as a gift
                      2. The most appropriate lifetime gift-giving technique
                      3. Justification of the lifetime gift-giving techniques selected for the client's situation
                    F. Marital deduction and bypass planning
                      1. Characteristics of the marital deduction
                      2. Recommendation and justification of property interests that qualify for the marital deduction
                    G. Federal estate tax implications of the marital deduction and bypass planning
                      1. Federal estate implications of using the marital deduction
                      2. Calculation of Federal estate tax savings generated from modifying a client's estate plan to minimize tax
                    H. Recommendation of the most appropriate marital or non marital transfer
                      1. Factors to consider in selecting the optimum mix of marital and non marital transfers
                      2. Selection of the most appropriate single or combination of marital and/or non marital transfers for a client's situation
                      3. Justification of the marital and non marital transfer techniques selected for the client's situation
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