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  • Enrolled Agent Exam [Part 2] 20, Corporate Alternative Minimum Tax (CAMT)

    Enrolled Agent Exam [Part 2] 20, Corporate Alternative Minimum Tax (CAMT)
    May 17 2026
    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 CAMT applies only to corporations with an average annual adjusted financial statement income (AFSI) over $1 billion for a three-year period. - The tax is calculated as 15% of AFSI, which begins with book income from financial statements, not regular taxable income. - A corporation's final tax liability is the greater of its regular tax liability or the tentative minimum tax calculated under the CAMT. - A common exam trap is using a corporation's taxable income as the base for the 15% CAMT calculation instead of its adjusted financial statement income. - Paying the CAMT generates a tax credit that can be carried forward indefinitely to reduce the corporation's regular tax liability in future years. 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
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    1 Min.
  • Enrolled Agent Exam [Part 2] 19, Accumulated Earnings Tax and PHC Tax

    Enrolled Agent Exam [Part 2] 19, Accumulated Earnings Tax and PHC Tax
    May 16 2026
    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 Accumulated Earnings Tax is a 20% penalty on C-corps retaining earnings beyond reasonable business needs, with a minimum credit of $250,000 ($150,000 for PSCs). - The Personal Holding Company (PHC) Tax is a 20% penalty on certain C-corps that meet both a 60% passive income test and a 50% ownership test by five or fewer individuals. - A common exam trap is identifying what constitutes 'reasonable business needs' for the AET; vague or indefinite plans for expansion do not qualify. - The PHC tax rules are based on objective income and ownership tests, whereas the AET involves subjective intent to avoid shareholder taxes. - A corporation cannot be subject to both taxes in the same year; the PHC tax takes priority if the corporation meets the criteria for both. 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
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    3 Min.
  • Enrolled Agent Exam [Part 2] 18, Dividends-Received Deduction (DRD)

    Enrolled Agent Exam [Part 2] 18, Dividends-Received Deduction (DRD)
    May 15 2026
    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 Dividends-Received Deduction (DRD) is exclusively for C corporations to mitigate triple taxation on dividends. - DRD percentages are set at 50%, 65%, or 100%, depending on the recipient corporation's ownership stake. - A critical exam trap is the taxable income limitation, which is waived if the full DRD creates or increases a Net Operating Loss (NOL). - To qualify, stock must be held for more than 45 days within a specific 91-day window around the ex-dividend date. - The DRD is reduced for dividends received from stock that was purchased with borrowed funds (debt-financed portfolio stock). 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
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    3 Min.
  • Enrolled Agent Exam [Part 2] 17, C Corporation — Computing Taxable Income

    Enrolled Agent Exam [Part 2] 17, C Corporation — Computing Taxable Income
    May 14 2026
    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 10% limitation for corporate charitable contributions based on modified taxable income. - The three ownership tiers for the Dividends-Received Deduction (DRD) and how they determine the deduction percentage (50%, 65%, or 100%). - The critical difference in capital loss treatment: corporations can only offset capital gains, unlike the individual $3,000 deduction against ordinary income. - The carryover rules for corporate net capital losses, which are carried back 3 years and forward 5 years as short-term losses. - The modern rules for Net Operating Losses (NOLs), which are carried forward indefinitely but limited to 80% of taxable income. 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
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    3 Min.
  • Enrolled Agent Exam [Part 2] 16, C Corporation Formation — §351 Nonrecognition

    Enrolled Agent Exam [Part 2] 16, C Corporation Formation — §351 Nonrecognition
    May 13 2026
    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 qualify for a tax-free incorporation under Section 351 by meeting the property-for-stock and 80% control tests. - The critical distinction between transferring property (non-taxable) versus services (taxable) in exchange for stock. - How receiving "boot," such as cash or other property, can trigger gain recognition in an otherwise tax-free exchange. - The most common exam trap: how liabilities assumed by the corporation in excess of the property's basis create a taxable gain under Section 357(c). - A simple mental shortcut for calculating the shareholder's basis in the new corporate stock after the exchange. 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
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    4 Min.
  • Enrolled Agent Exam [Part 2] 15, Check-the-Box Election — Form 8832

    Enrolled Agent Exam [Part 2] 15, Check-the-Box Election — Form 8832
    May 12 2026
    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: - Eligible entities use Form 8832 to elect a tax classification other than their default, such as choosing to be taxed as a corporation. - An election's effective date has strict timing rules: it cannot be more than 75 days before the filing date or more than 12 months after. - Once an entity changes its classification via Form 8832, it is generally prohibited from changing it again for a 60-month period. - A common exam trap is confusing Form 8832 (the check-the-box election) with Form 2553, which is used specifically to elect S corporation status. - Understanding the default tax classifications (e.g., a multi-member LLC is a partnership) is key to knowing when an election is necessary. 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
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    4 Min.
  • Enrolled Agent Exam [Part 2] 14, Single-Member LLC — Disregarded Entity Rules

    Enrolled Agent Exam [Part 2] 14, Single-Member LLC — Disregarded Entity Rules
    May 11 2026
    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: - A Single-Member LLC (SMLLC) is a disregarded entity for federal income tax purposes by default. - An SMLLC owned by an individual reports its business activities on the owner's personal tax return, typically using Schedule C. - When a corporation owns an SMLLC, the LLC's activities are treated as a branch or division on the corporation's tax return. - An SMLLC is regarded as a separate entity for employment tax purposes and must have its own EIN to file payroll tax returns like Form 941. - The EA exam frequently tests the exception: an SMLLC is disregarded for income tax but treated as a separate entity for employment and certain excise taxes. 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
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    3 Min.
  • Enrolled Agent Exam [Part 2] 13, Limited Liability Company (LLC) — Default Tax Classification

    Enrolled Agent Exam [Part 2] 13, Limited Liability Company (LLC) — Default Tax Classification
    May 10 2026
    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 default tax classification for a single-member LLC is a disregarded entity, with income reported on the owner's personal return, such as on Schedule C. - A multi-member LLC is treated as a partnership by default, requiring the filing of Form 1065 and the issuance of Schedule K-1s to its members. - How LLCs can change their default tax classification by filing Form 8832, the Entity Classification Election, to be taxed as a corporation. - The critical distinction between an LLC's legal structure under state law and its federal tax classification under IRS rules. - A common exam trap involving absolute wording that ignores an LLC's ability to elect a different tax status. 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
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    4 Min.