Enrolled Agent Exam [Part 2] 52, Business Casualty Losses

Enrolled Agent Exam [Part 2] 52, Business Casualty Losses

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: - How to calculate a business casualty loss: the lesser of the property's adjusted basis or the decline in its fair market value, minus insurance proceeds. - That business casualty losses are not subject to the $100 per-event reduction or the 10% of AGI floor that applies to personal losses. - Why a federally declared disaster is not a requirement for deducting a business casualty loss, unlike the strict rule for personal losses. - That the deduction for a business casualty loss is taken in the year the loss occurs, not the year of discovery (except for theft). - The specific rule for completely destroyed business property, where the loss is simply the adjusted basis minus any salvage value or insurance reimbursement. 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] 51, Bad Debt Deduction — Specific Charge-off

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: - Why business bad debts are valuable ordinary deductions, while nonbusiness bad debts are treated as short-term capital losses. - The critical difference in timing: business debts can be deducted when partially worthless, but nonbusiness debts must be wholly worthless. - That the specific charge-off method is the only permissible method for deducting bad debts for most taxpayers. - How the exam uses the repealed "reserve method" as a common incorrect answer choice to trap test-takers. - The importance of documentation to prove a valid debt existed and became uncollectible, distinguishing it from a non-deductible gift. 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] 50, Involuntary Conversions — §1033 Deferral

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: - How to calculate realized gain, recognized gain, and deferred gain in a §1033 transaction. - The critical tax impact of failing to reinvest the full amount of proceeds received. - The specific replacement periods: two years for most casualties and three years for condemned business real property. - The difference between the strict "similar use" test and the more lenient "like-kind" standard. - How to calculate the basis of the new replacement property after deferring a gain. 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] 49, Like-Kind Exchanges — §1031 (Real Property Only)

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 post-TCJA rule restricting §1031 exchanges exclusively to real property held for business or investment. - The non-negotiable 45-day identification period and 180-day exchange period for deferred exchanges. - How to calculate the recognized gain, which is the lesser of the boot received or the realized gain. - The correct formula for determining the basis of the new replacement property by subtracting the deferred gain from its fair market value. - The mandatory role of a qualified intermediary in holding sale proceeds to avoid constructive receipt. 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] 48, Section 1231 — Sale of Business Property

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: - That net Section 1231 gains are treated as long-term capital gains, while net losses are treated as fully deductible ordinary losses. - How to correctly net gains and losses from the sale of multiple Section 1231 properties to determine the final tax character. - The function of the five-year lookback rule, which recharacterizes current Section 1231 gains as ordinary income to the extent of unrecaptured Section 1231 losses from the prior five years. - That property must be used in a trade or business and held for more than one year to qualify for Section 1231 treatment. - That depreciation recapture under Sections 1245 and 1250 must be calculated *before* determining the amount of a Section 1231 gain. 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