Topics in Tax: Strategic Business & Tax Planning

This course explores how and why taxation (primarily income taxation) affects business decisions. For students considering a career in tax , this course should be beneficial because it takes the perspective of the business decision-maker, not the tax professional. Thus, it will provide you with a broader perspective than is typical in a tax course. In fact, the course is designed primarily for a non-tax professional, i.e., someone that needs to understand how to incorporate tax planning into their decision-making. This course is recommended for law students that are interested in transactional planning (e.g., mergers and acquisitions), as well as those that would like to have a well-rounded understanding of business law. This course is only offered in the second 7-weeks of the fall semester and will meet twice a week at the Kelley School of Business and according to the Kelley School calendar.

After completing this course students should be able to:

1. Distinguish between basic tax planning strategies.

2. Understand and anticipate how taxes affect asset prices.

3. Recognize that tax issues affect business outcomes (and thus should influence business decisions) including decisions related to:

a. Investment decisions (e.g., tax rates and investment horizon).

b. Organizational structure (e.g. corporation vs. partnership).

c. Financing the business (e.g. debt vs. equity).

d. Mergers and acquisitions (e.g., taxable vs. tax-free).

e. Employee compensation (e.g., cash vs. stock-based compensation).

4. Understand the difference between marginal tax rates and effective tax rates and know how/when to use both concepts.

5. Incorporate tax issues into financial decision-making, including but not limited to:

a. Tax rate changes.

b. Tax rate differentials across different

i. Types of income (e.g., capital gains vs. ordinary income).

ii. Types of activities (e.g., business vs. investment).

iii. Types of entities (e.g., corporation vs. pass-through).

c. Deferral/acceleration of revenue and expense.

d. Net operating losses.