Enrolled Agent Exam [Part 1] 79, Excess Business Losses for Individuals

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 the excess business loss using the 2025 thresholds of $305,000 for single and $610,000 for joint filers. • That any disallowed excess business loss is treated as a Net Operating Loss (NOL) carryforward to subsequent tax years. • The critical order of loss limitations: basis, at-risk, and passive activity rules must be applied before the excess business loss limitation. • What constitutes a trade or business for this limitation, specifically excluding gains and losses from investment activities. • The purpose of Form 461, which is used to report and calculate the excess business loss limitation. 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