ACCT 429 DeVry All Week Discussions
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<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>All</strong> <strong>Week</strong> <strong>Discussions</strong><br />
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<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>All</strong> <strong>Week</strong> <strong>Discussions</strong><br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 1 Discussion 1<br />
Does the Tax Code Need Fixing? (graded)<br />
Here's the perennial question: Should the current federal income tax system be reformed? In answering this question,<br />
consider and discuss a number of factors, such as (1) whether the current system is fair to all taxpayers; (2) whether<br />
the system is too complex; (3) whether the system is too expensive to administer; and (4) whether the current system<br />
is effective at raising revenue while not impacting business, personal, and financial decisions or operations adversely.<br />
These are the same general factors that courts and Congress tend to consider. What do you think and why?<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 1 Discussion 2<br />
Progressive Taxation: Good or Evil? (graded)<br />
We've all heard talk show hosts rail about this many times: It's unfair that the rich pay more in taxes than the poor or<br />
the middle class. Is it? If not, why not? If so, why? In answering this question, apply some of the theories and concepts<br />
that you've encountered so far in the course, and don't be shy about researching this question on the Internet!<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 2 Discussion 1<br />
At-risk Rules and At-risk Limitations (graded)<br />
Before the passage of the 1986 Act, Congress attempted to impose restrictions on the abuses associated with the atrisk<br />
provisions of 1976 as set out in Code Section 465. In summary, the at-risk rules disallowed losses in excess of the<br />
investment. Discuss the at-risk limitations relating to individuals and closely held corporations.<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 2 Discussion 2<br />
So You Want to Own and Rent Real Estate? (graded)<br />
Admit it. You've watched that late-night infomercial describing how you can become a multimillionaire virtually overnight<br />
by leveraging your good looks and sparkling personality (and little else...) to invest in real estate. <strong>All</strong> joking aside,<br />
investing in real estate does present some opportunity for the creation of wealth, much like any other investment does.<br />
Taxation of rental real estate, however, does present some unique rules, and these rules can have a dramatic impact<br />
on the investor's realized gain or loss from the real-estate rental activity. Let's begin outlining the tax consequences by<br />
describing the various capacities in which an individual can own and rent real estate. Asked differently, are there<br />
distinctions in the tax law that depend on the manner in which the property is held or used, such as between those who<br />
rent real estate as a full-time business and those who merely rent a vacation home? What are the rules that we follow<br />
in telling one type of rental property or rental ownership from another?<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 3 Discussion 1
Basis: What Is It and Why Do We Care? (graded)<br />
The notion of basis is crucially important in determining the tax consequences that result from virtually any propertybased<br />
transactions, whether it is the sale of $100 of stock, or a $10,000,000,000 merger of two multinational<br />
corporations. It's important, then, to answer one key question: What exactly is basis? How is it used in calculating the<br />
gain or loss that results from the sale of capital property? What is the rationale or justification for considering basis in<br />
calculating the amount of gain or loss?<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 3 Discussion 2<br />
You Decide: Tax Capital Gains (graded)<br />
The question of whether capital gains should be subject to the federal income tax has long been a subject of debate.<br />
Today, however, the issue has become less abstract and theoretical, because many congress people (and pundits and<br />
commentators, etc.) are openly advocating substantial reductions in or outright abolition of all such taxes. Scour the<br />
Internet for commentary on this issue, and consider the arguments in light of what you know about capital gains taxes.<br />
Is the capital gains tax a good tax? Why or why not? In making your decision (and explaining your answer), make sure<br />
that you consider some of the fundamental requirements of a good tax that we explored in <strong>Week</strong> 1, such as fairness,<br />
efficacy in raising funds, and relative ease of administration. Include links to and summaries of the articles that you've<br />
reviewed and found particularly influential so that we can all comment on this issue! <strong>Week</strong> 4 discussion<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 4 Discussion 1<br />
Employee or Proprietor: Who Cares? (graded)<br />
For most of us, work is work. We put in the same amount of effort whether we work as employees for a company or we<br />
are self-employed. (That point is arguable, of course, but just agree with me for the sake of argument). While the work<br />
itself may be created equal, however, the tax consequences arising from them are not. Self-employed individuals may<br />
be entitled to a greater range of deductions, but they also might very well be responsible for paying additional taxes.<br />
Furthermore, we know employees can receive a lot of valuable perks from their employers, and that these perks present<br />
specific tax consequences as well. In light of this news, it makes sense to start with the fundamental question: How do<br />
we tell whether someone is an employee or whether he or she is self-employed for purposes of the Code?<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 4 Discussion 2<br />
Family-Based Deductions (graded)<br />
This week, we're reviewing some of the most common federal income tax deductions for individuals. Many of them<br />
could perhaps be classified as family-based deductions, or enacted deductions that target those who might have<br />
children or other types of family obligations to fulfill. Is there an underlying theme or purpose to most of these<br />
deductions? If so, what is it? Do the deductions that Congress has enacted advance this purpose? Is this something<br />
that Congress should be doing at all? Provide an example of two such deductions, and supplement your argument with<br />
outside resources discussing the pros, cons, and impacts of these deductions. There are a lot of available choices!<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 5 Discussion 1<br />
Corporate Formation and the Tax Agent (graded)<br />
As you’ve undoubtedly learned by now, you often have to focus on the details in tax law, and the rules surrounding<br />
corporate formation are no exception to this rule. We know that a corporation is generally seen as a separate taxable<br />
entity from its shareholders. As a result, corporate formations, which involve transfers of property between the<br />
shareholders and the corporation, would generally be taxable to both the corporation and the shareholders. It’s no<br />
surprise that this result would often discourage corporate formation. Congress remedied this particular problem by<br />
enacting Section 351, and your text details how this provision generally operates. Did Congress craft a provision that<br />
allows corporations and their shareholders to avoid taxation on these transactions permanently, or did it have something<br />
else in mind? Support your answer!
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 5 Discussion 2<br />
Taxation of Corporate Dividends (graded)<br />
Relatively recent revisions to the Code have modified the tax treatment of dividends. Put your Internet research skills<br />
to use and tell me about these changes and their consequences. In particular, tell me (1) what dividends are, as defined<br />
by the Code; (2) what the recent changes effectively do (and how it was different from the prior approach to the taxation<br />
of dividends); and (3) what the changes sought to achieve (in other words, why was the change made?).<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 6 Discussion 1<br />
S Corporations: Can Just Anyone Join? (graded)<br />
In enacting Subchapter S of the Code, Congress decided to give a certain group of corporations a break from the<br />
burden of double taxation. Given this fact, there must be limitations on the corporations that can select S corporation<br />
status! Provide an example of one such limitation, including the text of the Code section that provides the limitation.<br />
(We might as well get a look at a verbatim Code section or two during the course of this class!)<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 6 Discussion 2<br />
Separately Stated Income? (graded)<br />
By now, you're probably of the opinion that the distinction between separately stated and no separately stated income<br />
is one of the most confusing concepts that you’ve encountered this week. For Congress to come up with something<br />
this confusing, you know there must have been a good reason (or at least we'd like to think so!). Think about the concept<br />
for a moment. What is the broad tax policy behind separating these two categories of income? What is Congress trying<br />
to achieve? What problems does it prevent? What problems does it cause?<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 7 Discussion 1<br />
Take Your Partner… or Not (graded)<br />
As we've learned this week, choosing a partnership as a tax entity has consequences, and those consequences often<br />
are different than those that arise from choosing the corporate form. Many of these consequences can be quite<br />
dramatic, particularly if the business goes sour or if catastrophic, unforeseen circumstances arise—and many of them<br />
don't have a thing to do with taxes. What are some of the more significant nontax consequences of choosing the<br />
partnership form? Which ones do you think are the most important, and why?<br />
<strong>ACCT</strong> <strong>429</strong> <strong>DeVry</strong> <strong>Week</strong> 7 Discussion 2<br />
Does the Tax Code Need to Be Fixed? (graded)<br />
We began this class with this question. After learning as much over the last 7 weeks as we have about the federal<br />
income tax system, it also seems an appropriate place to end it. Have your thoughts on the matter changed? Why or<br />
why not? By now, you should at least be able to discuss your agreement and/or concerns in much more detail, given<br />
your impressive knowledge on the subject. Don't forget to consider the types of factors that we stressed at the beginning<br />
of the course and that we have been revisiting every week since that point in time!