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 general rule that passive activity losses can only be deducted against passive activity income.

- How the special $25,000 allowance for rental real estate lets taxpayers with active participation deduct losses against non-passive income.

- The calculation for the MAGI phase-out of the $25,000 allowance, which occurs between $100,000 and $150,000.

- That all suspended passive losses from an activity are released and become fully deductible upon a complete and taxable disposition of that activity.

- The key differences between the 'active participation' standard for the rental allowance and the more stringent 'material participation' tests.

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:

- To distinguish between currently deductible repairs and capital improvements that must be depreciated.

- The correct MACRS depreciation lives: 27.5 years for residential property and 39 years for commercial property.

- The de minimis rule where rental income is tax-free if a property is rented for fewer than 15 days.

- How to apply the personal use test (greater of 14 days or 10% of fair rental days) to classify a vacation property.

- That when vacation home rules apply, rental expense deductions are limited to rental income, and no net loss can be claimed.

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:

- Cash-method farmers are generally not required to maintain or use inventories.

- Cash-basis farmers can elect to defer crop insurance proceeds for one year if they normally would have sold the crop in the following year.

- The one-year deferral election also applies to federal payments received due to natural disasters that damage crops.

- Gain from selling excess livestock of any kind due to weather in a federal disaster area can be postponed for one year under IRC Section 451(g).

- Gain from selling excess draft, breeding, or dairy livestock due to weather can be deferred for a two-to-four-year replacement period under IRC Section 1033(e).

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:

- Farm income averaging on Schedule J allows farmers to spread current year farm income over the three prior base years to reduce their tax bill.

- This tax-saving strategy is available to individual farmers, partners, and S corporation shareholders, but not C corporations, trusts, or estates.

- Qualifying income includes profits from farming activities and gains on the sale of farm assets, but excludes gains from selling farmland or cash rent.

- The election is made on a timely filed return and is generally binding, meaning it cannot be easily revoked.

- A common exam trap involves base years with negative taxable income, which must be treated as zero for the Schedule J calculation.

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 distinguish between ordinary income from livestock held for sale and capital gains from breeding stock.

- The main sources of farm income reportable on Schedule F, including government payments and cooperative distributions.

- Why the cash accounting method is common for farmers and how it impacts the timing of income recognition.

- The direct link between net farm profit on Schedule F and the calculation of self-employment tax on Schedule SE.

- Key deductible farm expenses and the rules for depreciating farm assets like machinery and buildings.

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 key differences and participant thresholds for Form 5500 (large plans), 5500-SF (small plans), and 5500-EZ (one-participant plans).

- How the "80-120 Participant Rule" provides filing flexibility and can help avoid a mandatory plan audit.

- The specific filing threshold for Form 5500-EZ, including the $250,000 asset trap that often appears on the exam.

- The standard and extended due dates for the Form 5500 series and the proper use of Form 5558 for an extension.

- Why large plans with 100 or more participants are required to undergo an annual audit by an independent qualified public accountant.

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:

- SEP-IRA contributions are made only by the employer and are discretionary each year.

- The SEP contribution for a self-employed person is based on net adjusted self-employment income, not gross profit.

- SIMPLE-IRAs are for employers with 100 or fewer employees and allow for both employee and mandatory employer contributions.

- The two employer funding options for a SIMPLE-IRA are a 3% match or a 2% nonelective contribution.

- Withdrawals from a SIMPLE-IRA within the first two years of participation face a steep 25% penalty, not the usual 10%.

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 key difference between 401(k) plans for for-profit entities and 403(b) plans for non-profits and schools.

- The 2026 employee elective deferral limit of $24,500 and the additional $8,000 catch-up for those age 50 and over.

- How profit-sharing plans are funded by discretionary employer contributions, deductible up to 25% of total participant compensation.

- The calculation of the maximum overall contribution to a defined contribution plan, which is $72,000 for 2026, plus catch-up amounts.

- How to avoid the common exam trap of confusing the employee deferral limit with the total combined employee and employer contribution limit.

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 core difference between Defined Benefit (DB) and Defined Contribution (DC) plans concerning investment risk.

- How employer contribution requirements are calculated for DB plans versus DC plans.

- Key ERISA requirements for vesting and the specifics of cliff and graded vesting schedules.

- How nondiscrimination rules, including ADP/ACP tests and top-heavy rules, are applied to qualified plans.

- Common exam traps related to safe harbor plans and immediate vesting requirements.

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 crucial difference between Form 1023 for charitable 501(c)(3) organizations and Form 1024 for other non-profits like social clubs and business leagues.

- The specific financial thresholds for using the streamlined Form 1023-EZ, including the $50,000 gross receipts and $250,000 total asset limits.

- How the 27-month rule determines if an organization's tax-exempt status is retroactive to its formation date.

- Key exceptions to the filing requirement, such as for churches and organizations with less than $5,000 in gross receipts.

- A simple mnemonic to remember the correct forms: '3 for Charity, 4 for More.'

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