Enrolled Agent Exam [Part 2] 26, S Corporation Stock Basis vs Debt Basis

Enrolled Agent Exam [Part 2] 58, Travel Expenses — Tax Home and Away from Home

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - Your 'tax home' is defined as your main place of business, which may be different from your family's residence. - Travel expenses are only deductible if you are 'away from home' long enough to require sleep or rest. - A work assignment is considered temporary, allowing for deductible travel expenses, if it is realistically expected to last one year or less. - If a temporary job is extended to last more than one year, it becomes an indefinite assignment, and the location becomes your new tax home from the moment the expectation changes. - Deductible travel costs include transportation and lodging, but meal expenses are generally limited to a 50% deduction. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

Enrolled Agent Exam [Part 2] 57, Change of Accounting Method — Form 3115

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - When a taxpayer must file Form 3115 to request a change in accounting method. - How to calculate the Section 481(a) adjustment to prevent duplication or omission of income. - The timing difference for recognizing positive (4-year spread) versus negative (1-year deduction) adjustments. - The distinction between automatic and non-automatic consent procedures for accounting method changes. - How to differentiate a change in method from a correction of an error, which requires an amended return. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

Enrolled Agent Exam [Part 2] 56, Hybrid Accounting Method

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The hybrid method is a combination of cash and accrual accounting permitted by the IRS. - A business with inventory must use the accrual method for all purchases and sales of that merchandise. - Service-based income and general operating expenses can often be accounted for using the cash method under a hybrid system. - A common exam trap involves small businesses with inventory incorrectly attempting to use the pure cash method for all transactions. - Any accounting method chosen, including hybrid, must be used consistently and must clearly reflect income to be valid. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep

Enrolled Agent Exam [Part 2] 55, Cash vs Accrual Accounting Method

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The core difference between cash basis (income when received, expenses when paid) and accrual basis (income when earned, expenses when incurred). - How the constructive receipt doctrine is a common exam trap for cash-basis taxpayers. - The three parts of the 'all-events test' required for deducting expenses under the accrual method, with a focus on economic performance. - Which entities, such as large C corporations and tax shelters, are required to use the accrual method. - The specifics of the small business taxpayer exception, including the gross receipts test that allows certain larger businesses to use the cash method.

Enrolled Agent Exam [Part 2] 54, Lower of Cost or Market (LCM)

This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - The Lower of Cost or Market (LCM) method requires inventory to be valued at the lesser of its historical cost or current market value. - For tax purposes, "market" is typically the current replacement cost of the inventory. - The LCM method cannot be used if the taxpayer uses the LIFO inventory method. - A write-down from cost to a lower market value results in a recognized loss in the current period. - The exam will likely test your ability to apply the LCM rule on an item-by-item basis to calculate the correct inventory valuation. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep