Print Version

Effective: Summer 2011

Prerequisites: Prerequisite: ACTG 67.
Advisory: Advisory: Eligibility for MATH 220 and ESLL 26.
Grade Type: Letter Grade, the student may select Pass/No Pass
Not Repeatable.
FHGE: Non-GE Transferable: CSU
4 hours lecture. (48 hours total per quarter)

Student Learning Outcomes -
  • Identify basics of Federal and California income tax law as it relates to Sole Proprietorships and Partnerships.
  • Demonstrate practical knowledge of income tax form preparation and tax compliance process as these relate to sole proprietorships and partnerships.
Description -
Current federal income tax law as it relates to sole proprietorship and partnership.

Course Objectives -
Student will be able to:
  1. describe and explain the tax consequences related to and prepare business income tax returns for proprietorship.
  2. describe and explain the tax consequences related to and prepare business income tax returns for partnerships.
Special Facilities and/or Equipment -
Access to spreadsheet, word-processing, presentation. When taught as an online distance learning section, students and faculty need ongoing and continuous Internet and email access.

Course Content (Body of knowledge) -
  1. Inventories.
    1. When inventories are used.
    2. How inventories are valued.
    3. Change in inventory method
    4. When inventories are not used.
    5. Farmer's inventories--special accounting factors.
  2. Installment sales.
    1. Qualifying for installment method.
    2. Sale of real property.
    3. Sale of installment obligation.
    4. Deferred payment sales.
    5. Repossession of real and personal property.
  3. Depreciation
    1. Natural.
    2. Useful life.
    3. Methods of computing
    4. Changing depreciation methods
    5. Additional first year "bonus" depreciation.
    6. Retirement of depreciated property.
    7. Asset depreciation range system.
  4. Depletion and mine exploration development.
    1. Cost depletion.
    2. Percentage depletion.
    3. Exploration and development.
  5. Bad debts and losses.
    1. Bad debts.
    2. Losses.
  6. The net operating loss.
    1. Deduction.
    2. Amount of carry back and carry forward.
  7. Partnerships.
    1. Formation.
    2. Operation.
    3. Change in partnership interest.
    4. Distributions.
    5. Ending partnership interest.
    6. Miscellaneous matters.
  8. Decedents, estates, and trusts.
    1. Decedents.
    2. Estates and trusts.
    3. Deductions for distribution to beneficiaries.
    4. How beneficiary is taxed.
    5. Family trusts.
  9. The corporation.
    1. Organizing.
    2. Corporate tax bill.
    3. Consolidated returns.
    4. "Tax-option" corporation.
Methods of Evaluation -
  1. Examinations
  2. Quizzes
  3. Projects
  4. Tax Return preparation
Representative Text(s) -
Willis, Eugene, William Hoffman, and David Maloney. West??s Federal Taxation 2010. Mason, Ohio: South-Western, 2010.

Disciplines -
Method of Instruction -
Lecture, in class or electronic discussions, group work, case studies.
Lab Content -
Not applicable.
Types and/or Examples of Required Reading, Writing and Outside of Class Assignments -
  1. Reading IRS Tax Publications and Form Instructions at
  2. Reading California Publications and Form Instructions at
  3. Reading the latest Federal Tax updates at the IRS website
  4. Reading the latest California Tax updates at the CA FTB website
  5. Reading Internal Revenue Tax Code and Regulations
  6. Reading of Wall Street Journal, Business Week, and Fortune