Finance Exam Prep

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

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 apply the 80% taxable income limitation to Net Operating Loss deductions. • The modern rule for NOLs is indefinite carryforward with no carryback, except for specific farming losses. • Why nonbusiness deductions like the standard deduction cannot create or increase an NOL. • Common exam traps, such as confusing current NOL rules with outdated pre-TCJA or temporary CARES Act provisions. • The simple mnemonic "Eighty Forward Forever" to remember the core post-2020 NOL rules. 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

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: hobby income is fully taxable, while hobby expenses are entirely non-deductible. • How to apply the three-out-of-five-year presumption of profit, including the special two-out-of-seven-year rule for horses. • The purpose of the IRS's nine-factor test in determining if an activity is a business or a hobby. • A common exam trap of confusing hobby loss rules with separate passive activity loss limitations. • Why classifying an activity as a hobby can result in taxable income even with an overall economic loss. 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

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: • Loss deductions must sequentially clear three hurdles: Basis, At-Risk, and Passive (B-A-P). • S corp shareholders do not receive basis for entity-level debt, unlike partners in a partnership. • At-risk amounts generally include cash invested plus recourse debt, but exclude nonrecourse financing. • Form 6198 is used to calculate and apply the at-risk limitations to losses. • A key exam exception allows qualified nonrecourse financing for real estate activities to be included in the at-risk amount. 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

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: • Suspended passive losses are not permanently lost; they are carried forward indefinitely to future tax years. • Carryover losses are first used to offset passive income from any source before being applied to nonpassive income. • A complete, taxable disposition of a passive activity unlocks all suspended losses associated with that specific activity. • Upon death, suspended losses are deductible on the final return, but reduced by the step-up in basis. • When a passive activity is gifted, the suspended losses are added to the recipient's basis and are not deductible by the donor. 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

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 AOTC is a per-student credit with a 40% refundable portion, while the LLC is a per-return credit and is entirely non-refundable. • Qualified education expenses must be reduced by tax-free assistance like scholarships and grants before any credit is calculated. • A student who can be claimed as a dependent cannot claim an education credit, even if the parent does not claim them. • AOTC qualified expenses include required course materials purchased from any vendor, whereas LLC expenses are more restricted. • Taxpayers with a Married Filing Separately status are ineligible to claim either the AOTC or the LLC. 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

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 reconcile Advance Premium Tax Credits (APTC) with the final allowable Premium Tax Credit (PTC) on Form 8962. • The role of Modified AGI, the Federal Poverty Line (FPL), and the applicable figure in calculating a taxpayer’s required contribution. • Why the second-lowest-cost silver plan, or benchmark plan, is critical for determining the final PTC amount. • How income-based repayment limitations can cap the amount of excess APTC a taxpayer must pay back, a common exam trap. • A mnemonic to remember the PTC calculation and reconciliation process for exam day. 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

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 critical difference between the $2,700 annual FICA threshold and the $1,000 quarterly FUTA threshold for household employees. • That all household employment taxes (FICA and FUTA) are reported on Schedule H, which is filed with the employer's Form 1040. • Why a household employee must receive a Form W-2 and never a Form 1099-NEC, a common point of confusion on the exam. • That withholding federal income tax is optional and requires an agreement between the employer and employee via Form W-4. • How to apply the control test to determine if a worker is an employee, triggering Schedule H, or an independent contractor. 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

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 cancelled debt is generally taxable income reported on Form 1099-C, but exam questions focus on the exceptions. • The insolvency exclusion is strictly limited to the amount by which total liabilities exceed the FMV of total assets immediately before the debt cancellation. • Debt discharged in a Title 11 bankruptcy case is always fully excluded from income, regardless of the taxpayer's solvency. • Excluding COD income under most exceptions requires a reduction of tax attributes on Form 982 in a specific, testable order. • Qualified Principal Residence Indebtedness exclusion requires a direct reduction to the basis of the home, not the standard attribute reduction order. 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

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 Section 1031 tax deferral now applies exclusively to real property and not personal property. • How to navigate the strict 45-day identification and 180-day receipt timelines, including a common exam trap involving tax return due dates. • The rule for recognizing gain when "boot," such as cash or debt relief, is received in an exchange. • The essential role of a Qualified Intermediary in preventing constructive receipt of funds. • That losses are never recognized in a like-kind exchange, a key distinction from gain recognition rules. 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

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 gross profit percentage to determine the taxable gain recognized from each payment. • Why depreciation recapture under Sections 1245 and 1250 must be recognized in the year of sale. • The rule prohibiting dealers from using the installment method for sales of their inventory. • Key restrictions for installment sales of depreciable property between related parties. • The mnemonic "Dealers, Depreciation, and Dependents Don't Defer" to remember key exceptions. 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

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: • Inherited property’s basis is generally its Fair Market Value (FMV) on the decedent's date of death, and the holding period is always considered long-term. • The alternate valuation date (six months after death) can only be elected if it reduces both the gross estate value and the estate tax liability. • If an asset is sold within six months of death and the alternate valuation date is elected, its basis is the selling price, not the FMV on the alternate date. • In community property states, both the decedent's and the surviving spouse's shares of the property get a basis adjustment to FMV. • Income in Respect of a Decedent (IRD), such as a traditional IRA, is a major exception and does not receive a stepped-up basis. 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