IRS Enrolled Agent Part 2 Course Notes

This 37-question domain is the heart of Part 2. Think like a preparer: identify the taxpayer, accounting method, item character, substantiation, timing, and form. Then compute. High-yield traps are gross receipts vs. gains, capital vs. repair, employee vs. contractor, §179/bonus/MACRS ordering, recapture, basis → at-risk → passive loss limits, and entity-specific K-1/basis treatment.

• Putting asset-sale gain directly into ordinary gross receipts.

• Gross receipts first; asset gains separately.

This 30-question domain is entity mechanics. Start every problem by identifying the taxpayer/entity, tax classification, tax year, and transaction. Then apply the entity-specific basis and distribution rules. Partnership and S-corporation basis are NOT interchangeable; C corporations are separate taxpayers; sole proprietorships generally report on Schedule C.

• Treating guaranteed payments as partnership distributions.

• Identify entity first; never start with the tax result.

This 18-question domain is smaller but detail-heavy. Learn the return/form first: Form 1041 for estates/trusts, Form 990-series/990-T for exempt organizations, Pub. 560 plan rules, Schedule F for farming, and Schedule E for most rental real estate. Then apply the specialized ordering rules—especially DNI/beneficiary reporting, UBI, retirement-plan limits, farm-rental participation, and mixed personal/rental use.

• Putting post-death IRD on the decedent's final return automatically.

• 1041 question? Identify decedent vs estate/trust vs beneficiary first.