NCPR 503

Income Tax Planning                                                                                     Spring 2016                  

Instructor:      James P. Simos         

 

Email:             njss@aol.com       james.p.simos@kwcommercial.com      jps8q@virginia.edu

 

Phone:            703- 231-6280

 

Lecture Place:           Northern VA Campus UVA

 

Contact Hours:          45 hours

 

Pre-requisites:

None

 

Non-Credit Certificate Program

 

Course Description:

The course focuses on principles and current law and practice of income taxation and its impact on financial planning for individuals, couples and families in their roles as investors, employees and business owners.

 

Course Objectives:

 

{C}<!--[if !supportLists]-->·   {C}<!--[endif]-->   Evaluate the impact of taxes on family financial decisions throughout the life cycle.

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Apply the underlying economic and management principles used to help families make tax planning decisions.

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Use their knowledge and understanding of the interactions between taxes and market conditions to assist families with financial decisions.

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Evaluate the appropriateness of tax strategies for individual family situations.

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Communicate with clients to ensure integration of tax strategies with family financial goals.

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Integrate tax planning into the six step financial planning process.

 

In addition to developing technical expertise in the course subject matter, this course develops and fosters:

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Communication skills, both written and oral

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Critical thinking

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Decision-making

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Team work

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Intellectual curiosity and lifelong learning

 

 

 

 

Required Textbook(s):

Income Tax Planning for Financial Planners by Langdon Grace Dalton                                                                (Pub: Money-Education  888-295-6023  or  www.money-education.com)                                                                   EIGHTH Edition

 

Bookstore Information:

 

 

Other Required Materials:  

·         {C}<!--[endif]-->Access to textbook website (or other material) reporting most recent changes in income tax

 

Recommended Materials:    

Tax Reference and Research Materials

Suggestions: TaxCut, TurboTax, www.taxact.com, Lacerte, BNA Income Tax Planner.

 

            Suggestions:

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->U.S. Master Tax Guide.  CCH

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Tax Facts 1.  National Underwriter

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Tax Facts 2.  National Underwriter

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Income Tax & Financial Planning Quickfinder^® Handbook.  Quickfinder, Inc.

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->RIA’s Federal Tax Research & Planning Library, Thompson

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->CCH’s Tax Planning Strategies

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->www.irs.gov

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->www.taxtools.com

 

Supplementary Reading:

For master’s level course the most recent strategies and articles of interest should be drawn from the following journals:

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Journal of Financial Planning

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->CCH’s Personal Financial Planning Monthly

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Advances in Taxation

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->National Tax Journal

{C}<!--[if !supportLists]-->·         {C}<!--[endif]-->Practical Tax Strategies

 

Course Projects and Assignments:

 

Exams are a combination of open and closed book exercises.  Application problems are a good guide for the types of questions covered in the open book portion.  The closed book part of the exam will cover basic tax knowledge discussed in class and covered in assigned readings.  There are two exams and a comprehensive final.  The final exam will emphasize the application of tax planning ideas given a specific client fact pattern.

 

Grading: Grading criteria for the class will be as follows:

 

{C}<!--[if !supportLists]-->§  {C}<!--[endif]-->The final grade for the class will be calculated as follows:

 

Exams	70%
Participation	30%
Total	100%

 

 

Grading Scale:

            A        100         90%

            B          89         80%

            C          79         70%

            D          69         60%

            F          50% and below

 

Course Policies:

 

Attendance

Attendance in this class is very important and critical to your success in the ultimate goal, passing the CFP exam.

 

Make up work

Communication is very important in this course. If you will be late submitting an assignment, please contact me ahead of time. Any work that is missed is your responsibility to make up and submit.

 

Plagiarism

All work submitted by students must be their own. Plagiarism may result in an automatic grade of “F”.  Please reference by name and/or link other author’s work.

 

The Academic Honor System

 

The University of Virginia academic honor system embodies many of Mr. Jefferson's principles.  The purpose of the Honor System is to sustain and protect a community of trust in which students can enjoy the freedom to develop their intellectual and personal potential.  The concept of an honor system implies that students commit themselves to the pursuit of truth.  At the Division of Continuing Education, course is conducted in the spirit of the Honor System. 

*** Please include the following academic honor statement on all assignments:

“On my honor, I pledge that I have neither given nor received help on this assignment.”

 

Announcements:

Announcements are viewable when you first enter UVaCollab. Please check the weekly announcements for directions and important dates and information throughout the course.

 

 

Course Outline – the professor retains the right to modify this outline however, any modifications will not be unreasonable:

 

Detailed Class Outline – the professor retains the right to modify this outline:

Note:  The following outline is organized by week, and assumes that the class will meet for at least three hours per week, whether in two or three class meetings, or in a single session.  Out-of-class preparation should take a minimum of six hours per week (a minimum of two hours of preparation per contact hour).

 

Week	Content; Assignments; Tests	Reading and Preparation [faculty to add]	CFP Board Topics
Section One: Introduction and General Framework for Income Tax Planning Weeks 1 through 3
1	Overview of course, student expectations   Introduction to taxation    a.       Historical Perspective b.       Income Taxes and the IRS	Ch 1
2	Working  with the Tax Law Ch2 a.       Sources  of the Tax Law b.       Administration of Tax System   Fundamentals of Income Tax {C}<!--[if !supportLists]-->a.      Tax formula for Individual Taxpayers {C}<!--[if !supportLists]-->b.      Introduction to Individual  Income Taxation {C}<!--[if !supportLists]-->c.      Basic Tax Planning Principles	Ch 2 Ch 3
3	Gross income from personal and investment activities a.       Subjecting Gross Income to Taxation   Types of Gross income and Exclusions   {C}<!--[if !supportLists]-->a.       {C}<!--[endif]-->Sources of Gross Income {C}<!--[if !supportLists]-->b.      {C}<!--[endif]-->Income from Investment Activities Income from Personal Activities	Ch 4

 

 

Section Two: Tax Planning for Investors Weeks 4 through 9
4	Gross Income from Employment      a.       Gross income related  to employment b.       Major employ-provider fringe benefits c.       Other Employee Fringe  Benefits d.       Employer-sponsored retirement plan contributions and distributions e.       Government –required benefits		Ch 5
5	Introductions to Deductions a.       Classification of deducible expenses b.       Above-the-line deductions for individuals c.       Deduction issues for employers and employee d.       Deductions and tax planning		Ch 6
6	General Classification of Expenses   a.       Medical Expenses b.       Taxes c.       Interest d.       Charitable  Contributions e.       Casualty Losses f.        Miscellaneous Deductions.		Ch 7
7	Deductions Penalties and Losses a.       General Rules b.       Specific Deductions c.       Penalties d.       Other loss disallowance   Tax Credits   a.       Nonrefundable Credits b.       Refundable Credits c.       General Business Credits d.       Review		Ch 8           Ch 9
8	Exam 1   Basis Rules Depreciation and Asset  Categorization   {C}<!--[if !supportLists]-->a.      Determining Basis {C}<!--[if !supportLists]-->b.      Basis for Personal Asset {C}<!--[if !supportLists]-->c.      Special Basis Rules {C}<!--[if !supportLists]-->d.      Depreciation {C}<!--[if !supportLists]-->e.      Categorizing Assets for income tax purposes		Ch 10
9	Taxation of Capital Assets a.       Realization and Recognition b.       Capital Gains c.       Determining Net Capital Gains and losses d.       Limitations of Capital losses		Ch 11
10	Business Assets a.       Income assets b.       Section 1231 c.       Recapturing Depreciation  on personal property d.       Recapturing Depreciation taken on real estate e.       Business assets planning f.		Ch 12
11	Non Taxable Exchanges     a.       Like-kind exchanges b.       Exchange of stock for property c.       Involuntary Conversions d.       Insurance Policies e.       Corporate Recapitalization f.        Reacquisition of real property g.       Transactions between spouses incident to divorce h.       Sale of personal residence        i.   Death Benefit from life insurance        j.   Distributions from IRA 401k 403b		Ch 13
12	Passive Actives Rules   {C}<!--[if !supportLists]-->a.      {C}<!--[endif]-->Application of rules {C}<!--[if !supportLists]-->b.      {C}<!--[endif]-->Limitations imposed on passive losses {C}<!--[if !supportLists]-->c.       {C}<!--[endif]-->Planning activity losses and other planning issues {C}<!--[if !supportLists]-->d.      {C}<!--[endif]-->Exceptions to passive activity rules {C}<!--[if !supportLists]-->e.       {C}<!--[endif]-->Passive Credits		Ch 14
13	Alternative  Minimum Tax a.       How the ATM b.       Adjustments and preferences c.       Corporations and the ATM   Business Entity selection and taxation   a.       Sole proprietorship b.       General Partnership c.       Limited Partnerships d.       Limited Liability Partnerships e.       Family Limited Partnerships f.        Limited Liability Companies g.       C Corporations h.       S Corporations i.        Protecting Owners from each other		Ch 15               Ch 16
14	Final Exam