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Exam 1 Material
• Review the 3 long form problems from Exam 1 to prepare for the tax return component of
the exam (don’t worry about the parts that are crossed off):
o Gross income and above the line deductions
o Itemized deductions
o Individual income tax formula
• Understand above the line deductions, below the line deductions, and tax credits – see #23
• Determining filing status and dependent status – see #18-22
• Tax rate structures – see #2
• Various tax rate measures: marginal tax rate, effective tax rate, average tax rate – see #1, #5
• Due dates, extensions, and statute of limitations – see #7-8
• Losses on business assets vs. losses on capital assets ($3,000 limit only on latter) – see #10
• Taxability of Social Security benefits – see #9 (I’ll give you the details for the calculation)
• Timing strategies and calculating NPV – see #11, #13
• Deductibility of self-employment taxes and health insurance premiums for a self-employed
individual – see #17
Exam 2 Material
• Taxability of interest and dividends – see #1
• Calculating gain/loss on stock sale – see #2
• Netting process for ST and LT capital gains/losses – see #4-5
• Net investment income tax – see #6
• Calculating tax basis in a partnership interest – see #23
• Limitations on passive losses (tax basis, then at-risk, then passive income) – see #7
o Exception for real estate losses – see #8
• Tax consequences of independent contractor vs. employee – see #13
• Calculating self-employment taxes – see first long form problem
• Child tax credit and phase out – see first long form problem
• Lifetime learning credit – see #12
• American opportunity credit – see first long form problem
• Earned income credit – see first long form problem
• Ordering of tax credits when calculating tax due – see #14 and the first long form problem
• Cash vs. Accrual method – review second long form problem
o Rules for bad debt – see #19
• Depreciation – understand how to apply Section 179 immediate expensing, bonus
depreciation, and regular depreciation, see last long form problem
o Understand how calculation changes for assets that are partially personal-use #24
o Understand NPV consequences of bonus depreciation #25
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