Examworthyexamworthy.comIRS Enrolled Agent - SEE Part 1: Individuals cheat sheet
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At a glance
Format: Multiple choice, closed book
Domain weight map
Heaviest first - spend your time hereHow this exam thinks
Part 1 tests whether you can apply the exact individual tax rule - the right threshold, test, and form - to a taxpayer's specific facts, closed book and from memory.
Spot the trap
Tempting wrong answers, and why they failTempting but wrong
Inherited property is long-term only if the heir's holding period plus the decedent's years exceeds one year.
Why it fails
This describes a carryover or tacking concept that applies to gifts, not inheritances. Inherited property does not require tacking because long-term treatment is automatic by statute.
Income and Assets
Tempting but wrong
Medical expenses are deductible only above 10 percent of adjusted gross income.
Why it fails
A 10 percent floor applied in some earlier years, but the medical floor is 7.5 percent of AGI for 2024, so the 10 percent figure overstates the threshold.
Deductions and Credits
Tempting but wrong
Self-employment earnings from an active business you materially participate in are investment-type returns on your business capital, so they count as net investment income.
Why it fails
Income from an active trade or business in which the taxpayer materially participates is not net investment income. Such self-employment earnings are subject to self-employment tax, not the Net Investment Income Tax, so they form no NIIT base.
Taxation
Tempting but wrong
A widower whose spouse died during the tax year should file as qualifying surviving spouse for that year.
Why it fails
Qualifying surviving spouse applies only to the two years AFTER the year of death and requires a dependent child. It is unavailable for the year of death itself, and a taxpayer with no dependants cannot use it at all.
Preliminary Work and Taxpayer Data
Tempting but wrong
Life insurance proceeds paid directly to a named beneficiary rather than to the estate are excluded from the gross estate.
Why it fails
Tempting because proceeds payable to a named beneficiary bypass probate, but probate avoidance does not control estate inclusion. Where the decedent held incidents of ownership in a policy on her own life, the proceeds are pulled into the gross estate under Section 2042 regardless of who received them.
Specialised Returns for Individuals
Tempting but wrong
A spouse who is still married and living in the same household can use separation of liability relief to allocate the understatement.
Why it fails
Separation of liability under Section 6015(c) requires that the requesting spouse be divorced, legally separated, widowed, or living apart for the 12 months before the request. A spouse who remains married and in the same household does not qualify for this branch.
Advising the Individual Taxpayer
Tempting but wrong
Once a home is converted to rental use, the principal-residence exclusion is permanently forfeited.
Why it fails
Conversion to rental does not permanently forfeit the exclusion. Eligibility turns on meeting the ownership and use tests within the five-year look-back period, not on the property's status when sold.
Income and Assets
Tempting but wrong
The medical floor is 7.5 percent of taxable income after the standard deduction is subtracted.
Why it fails
The percentage is right but the base is wrong. The floor is measured against adjusted gross income, not taxable income, so using taxable income misstates the calculation base.
Deductions and Credits
Key terms
Exam-day rules
- Read the last line of the question first. It tells you what is actually being asked, so you can read the scenario hunting for the trigger fact rather than absorbing every detail.
- Check the number, not just the concept. Distractors are built from the right idea with the wrong figure, so confirm the threshold, percentage, or dollar cap is the exact one before you choose.
- Find the trigger fact. A death this year, a home converted to a rental, a repurchase within 30 days, or a spouse who lived apart for six months each points to a specific rule that overrides the intuitive answer.
- For the net investment income tax, take the lesser of net investment income or the excess over the threshold. The whole excess and the whole modified adjusted gross income are both planted wrong answers.
- Flag and move on. The exam is closed book and timed, so do not lose minutes on one calculation when easier marks are waiting; cover every question, then return to the flagged ones.
Revision schedule
- Day 1Map the blueprint and book a date
- Week 1Lock the intake mechanics (Domain 1)
- Weeks 2-3Drill income, basis, and the deduction figures (Domains 2 and 3)
- Week 4Work the tax computations (Domain 4)
- Week 5Cover advising and specialised returns (Domains 5 and 6)