How to pass IRS Enrolled Agent - SEE Part 1: Individuals (SEE-1)
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The Special Enrollment Examination Part 1 covers individual taxation, the first of the three parts you pass to become an IRS Enrolled Agent. It tests whether you can take a real taxpayer's facts - a death in the family, an inherited parcel of land, a foreign bank account, a substantial understatement of income - and apply the correct rule on the correct form. The questions are scenario-driven and closed book, so you carry the rules in your head and reason from them under time pressure.
It suits anyone moving towards unlimited practice rights before the IRS: experienced preparers who want representation authority, accounting and finance professionals, and career changers with no tax background who are willing to learn the Form 1040 cover to cover. There are no prerequisites and no degree requirement. What the exam assumes is not prior credentials but command of the mechanics: filing status, dependency, what is and is not income, basis and holding period, the standard deduction versus itemising, and the major individual credits.
Part 1 rewards precision over breadth. A distractor is rarely absurd - it is the right concept applied to the wrong year, the wrong threshold, or the wrong form. Knowing that the medical expense floor is a percentage of adjusted gross income is not enough; you must know it is 7.5 per cent and that two other false floors will be offered. The way through is deliberate practice on scenario questions with worked explanations, so you learn why each wrong option is wrong, not just which one is right.
Because it is closed book and the numbers matter, this exam is more about disciplined recall of specific figures and tests than about judgement between vague options. Build the figures into memory, then drill the application until the right rule fires automatically from the facts in the stem.
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.
Difficulty
Intermediate
Best for
Tax preparers seeking unlimited representation rights, accounting and finance professionals, and career changers building US individual tax expertise from the ground up.
Prerequisites
None. A valid PTIN is needed to practise after you pass, but no degree, licence, or prior tax experience is required to sit the exam.
100 (85 scored)
Questions
210 min
Time allowed
105 / 130
Pass mark
$317
Exam cost (USD)
313
Practice questions
How this exam thinks
Three habits separate a pass from a fail on Part 1, and all three are about precision rather than insight.
First, the exam tests the exact number, not the general idea. Distractors are built from plausible-but-wrong figures: the medical floor offered as 10 per cent or 2 per cent instead of 7.5 per cent, the FBAR trigger offered alongside the higher Form 8938 thresholds, the net investment income tax base offered as the whole excess instead of the lesser of two amounts. Because the exam is closed book, you cannot look these up. Memorise the figures and the tests that go with them, then read each option asking whether the number is the right one, not merely a number that sounds tax-like.
Second, the exam rewards reading the facts for the trigger condition rather than reasoning by analogy. A surviving spouse in the year of death is treated as married and files jointly, not as a qualifying surviving spouse, which only begins the following year. Inherited property is automatically long-term regardless of how briefly the heir held it. A dependent parent need not live with the taxpayer for head of household. Each of these turns on a specific rule that overrides the intuitive answer, and the intuitive answer is exactly what the distractor offers. Find the trigger in the stem and apply the rule it points to.
Third, when a calculation has a defined formula, the exam tests whether you apply the formula or a tempting shortcut. The net investment income tax is 3.8 per cent of the lesser of net investment income or the excess of modified adjusted gross income over the threshold - not the whole excess, not the whole modified adjusted gross income. Capital gain or loss is amount realised minus adjusted basis, with holding period deciding the rate. Practise the formulas until you produce them from memory, because the wrong answers are the results of the shortcuts the formula is designed to prevent.
What each domain tests and how to study it
The SEE-1 blueprint is split across 6 domains. Weights are the official share of the exam; see the official exam guide for the authoritative breakdown.
What you must be able to do. Determine the correct filing status and dependency outcome from a taxpayer's living and support arrangements, identify the right taxpayer identification number, and apply preparer due diligence to the information returns in front of you.
In one sentenceThe intake work before any number is entered: pin the filing status, settle who is a dependent, confirm the correct identification number, and read the W-2 and 1099 series with due diligence.
Recall check: answer these from memory first
State the filing status a widow or widower uses in the year the spouse dies, and the one they may use for the two following years.
List the qualifying child tests and the qualifying relative tests, and name the one income limit that applies only to a qualifying relative.
Explain when a taxpayer needs an ITIN rather than a Social Security Number, and what a paid preparer's PTIN and Form 8867 are for.
What it tests. Determining the correct filing status across single, married filing jointly, married filing separately, head of household, and qualifying surviving spouse, including the year-of-death and considered-unmarried rules. It tests the qualifying child and qualifying relative dependency tests, the difference between a Social Security Number, an ITIN, and a PTIN, and how to interpret Forms W-2 and the 1099 series while meeting preparer due diligence obligations such as Form 8867.
How to study it. Build a filing-status decision tree and run scenarios through it: marital status on the last day of the year, who maintained the home, who the qualifying person is, and whether a spouse died this year or in the two prior years. Memorise the five qualifying child tests (relationship, age, residency, support, and the joint return test) and the qualifying relative tests (gross income limit, support, relationship or member of household). Keep the identification numbers and due diligence rules concrete, because these are often the easiest marks once the categories are clear.
Easy to confuse
Qualifying surviving spouse versus married filing jointly in the year of death. In the year the spouse dies the survivor is treated as married for the whole year and files jointly; qualifying surviving spouse status applies for up to two years afterwards and only with a dependent child. The exam plants the qualifying surviving spouse answer on the year-of-death scenario, where married filing jointly is correct.
Head of household with a dependent parent versus the live-with requirement. A qualifying child or relative generally must live with the taxpayer for over half the year, but a dependent parent is the exception: the parent need not live with the taxpayer if the taxpayer pays more than half the cost of the parent's main home. The distractor applies the general live-with rule to defeat a valid head-of-household claim.
Considered unmarried for head of household versus only married filing separately. A still-married taxpayer who lived apart from the spouse for the last six months of the year, paid over half the cost of a home for a dependent child, may be considered unmarried and file as head of household. The trap insists married filing separately is the only status available while legally married.
Worked example from the SEE-1 bank
lock_openFree samplePreliminary Work and Taxpayer Datamedium
Marcus Delacroix's wife died in March 2024. He did not remarry during the year, and he has no dependants. He paid all the costs of keeping up his home for the full year. Which filing status may Marcus use for the 2024 tax return?
AQualifying surviving spouse, because his wife died during the tax year.
BHead of household, because he maintained the home on his own for the full year.
CMarried filing jointly, because he is treated as married for the entire year his spouse died.check_circle Correct
DSingle, because he was widowed before the end of the tax year.
In the year a spouse dies, the surviving spouse who has not remarried is treated as married and may file jointly. For the tax year in which one spouse dies, the surviving spouse is considered married for the entire year, so a joint return is permitted provided there is no remarriage before year end. Qualifying surviving spouse status begins only in the following two years and depends on having a dependent child.
Why A is wrong: Qualifying surviving spouse applies only to the two years AFTER the year of death and requires a dependent child, so it is unavailable both for the year of death and because Marcus has no dependants.
Why B is wrong: Head of household requires being unmarried or considered unmarried and a qualifying person in the home; Marcus is treated as married for the year and has no qualifying person, so this status does not apply.
Why C is correct: A taxpayer whose spouse dies during the year and who has not remarried by year end is considered married for that whole year and may file a joint return for the year of death.
Why D is wrong: Marital status for a decedent's final year keeps the surviving spouse as married for that year, so single is not the correct status for the year of death.
What you must be able to do. Classify each receipt as taxable or excludable, compute gain or loss with the correct basis and holding period, determine the taxable portion of retirement distributions, and reduce gross income to adjusted gross income with the right above-the-line adjustments.
In one sentenceEverything that flows into income: what counts and what does not, basis and holding period on dispositions, the taxable slice of retirement money, and the adjustments that get you to adjusted gross income.
Recall check: answer these from memory first
Give the gain formula and state the holding period that makes a gain long-term, then say how inherited property and gifted property are treated.
State the Section 121 exclusion amounts and the ownership and use tests, measured over what look-back period.
Explain the wash sale rule: the window, what happens to the disallowed loss, and where it goes.
What it tests. Classifying income as taxable or excludable across wages, interest, dividends, rents, Schedule C business income, and digital asset transactions. It tests gain or loss calculations including adjusted basis, short versus long-term holding periods, the Section 121 principal residence exclusion, and the wash sale rule. It covers the taxable portion of IRA, 401(k), and pension distributions, early withdrawal penalties and required minimum distributions, and the above-the-line adjustments that produce adjusted gross income.
How to study it. Drill the basis and holding-period mechanics until they are automatic: amount realised minus adjusted basis, more than one year for long-term, and the special rules for gifts and inheritances. Learn the Section 121 ownership and use tests as a five-year look-back, not a snapshot on the sale date. Memorise the wash sale window, the required minimum distribution age, and the common early withdrawal penalty exceptions. For adjustments, keep a list of the above-the-line items and remember that adjusted gross income is the gateway figure for later phase-outs and floors.
Easy to confuse
Inherited property holding period versus the heir's actual holding period. Property acquired from a decedent is automatically treated as long-term when sold, no matter how briefly the heir held it, and takes a stepped-up basis to fair market value at death. The distractor classifies the gain as short-term because the heir personally held it only a few months.
Section 121 five-year look-back versus the home's status on the sale date. The exclusion turns on owning and using the home as a principal residence for at least two of the five years before sale, so a home converted to a rental shortly before sale can still qualify. The trap denies the exclusion because the property was a rental at the moment of sale.
Wash sale loss disallowed and added to basis versus permanently lost. A loss on stock repurchased within 30 days before or after the sale is disallowed but not destroyed; it is added to the basis of the replacement shares, deferring rather than denying it. The distractor says the loss is permanently lost, or that it was allowed because the sale came first.
Worked example from the SEE-1 bank
lock_openFree sampleIncome and Assetshard
Margaret Holloway inherited a parcel of investment land from her late aunt, who had owned it for nine years. Margaret sold the land four months after the date of her aunt's death and realised a gain. How is this gain classified for capital gains purposes?
ALong-term, because property acquired from a decedent is automatically treated as held for more than one year.check_circle Correct
BShort-term, because Margaret personally held the land for only four months before selling it.
CLong-term only if Margaret's combined holding period plus her aunt's nine years exceeds one year.
DShort-term, because the aunt's holding period cannot be tacked on after death.
Recognise that property acquired from a decedent is automatically treated as long-term when sold, regardless of the heir's actual holding period. Property received from a decedent is, by operation of the basis and holding-period rules, deemed to have been held for more than one year when the heir disposes of it, so any gain or loss is long-term even if the heir sells within days of receiving the asset.
Why A is correct: Under the inheritance rules, property acquired from a decedent receives automatic long-term treatment on sale, so the heir's actual holding period is irrelevant to classification.
Why B is wrong: This applies the ordinary holding-period count to inherited property, but property acquired from a decedent is treated as held long-term regardless of how long the heir actually owns it.
Why C is wrong: 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.
Why D is wrong: It is true that the aunt's period is not tacked, but the conclusion is wrong because inherited property is deemed long-term by statute rather than by tacking.
What you must be able to do. Choose between the standard and itemised deductions correctly, apply each Schedule A floor and cap, work the Section 199A qualified business income deduction, and place each credit on the refundable or non-refundable side with the right eligibility rules.
In one sentenceThe reductions to tax: standard versus itemised with every floor and cap, the qualified business income deduction, and the individual credits sorted into refundable and non-refundable with their phase-outs.
Recall check: answer these from memory first
State the medical expense floor and the state and local tax cap, including the married-filing-separately variant of the cap.
List which individual credits are refundable and which are non-refundable, and say what refundable means for a taxpayer with no tax liability.
Contrast the American Opportunity Credit and the Lifetime Learning Credit on year limit, eligible expenses, and refundability.
What it tests. Comparing the standard deduction with itemised deductions, including the 7.5 per cent medical floor, the $10,000 state and local tax cap, mortgage interest, and charitable contribution limits. It tests the Section 199A qualified business income deduction with its wage limitation and specified service business rules, and the difference between refundable and non-refundable credits applied to the Earned Income Tax Credit, Child Tax Credit, Child and Dependent Care Credit, and the education credits.
How to study it. Memorise the Schedule A numbers cold because they are the most heavily tested figures on the exam: the 7.5 per cent medical floor, the $10,000 SALT cap aggregating income, real property, and personal property taxes, and the married-filing-separately rule that forces both spouses to the same method. Separate the credits into two columns, refundable and non-refundable, and learn the eligibility gates for each: earned income and qualifying child rules for the Earned Income Tax Credit, and the differing year limits and expense rules for the American Opportunity and Lifetime Learning credits.
Easy to confuse
The 7.5 per cent medical floor versus a 10 per cent or 2 per cent floor. Only medical and dental expenses above 7.5 per cent of adjusted gross income are deductible, and the floor is on adjusted gross income, not taxable income. The distractors offer the old 10 per cent floor, the retired 2 per cent miscellaneous floor, or a floor measured against the wrong base.
SALT cap aggregated at $10,000 versus per-category or full deduction. State and local income, real property, and personal property taxes are added together and capped at $10,000 combined ($5,000 if married filing separately), not capped per category and not deducted in full. The trap caps each category separately or leaves property taxes uncapped.
Married filing separately standard deduction versus independent choice. If one spouse on a separate return itemises, the other spouse's standard deduction is zero and must also itemise; the choice is not made independently. The distractor lets each spouse choose freely, or reduces rather than eliminates the standard deduction.
Worked example from the SEE-1 bank
lock_openFree sampleDeductions and Creditsmedium
Soraya Nasrallah, who itemises, paid unreimbursed medical and dental bills during 2024 and wants to know how much she can deduct on Schedule A. Which threshold must her qualifying medical expenses exceed before any amount becomes deductible?
A7.5 percent of her adjusted gross income, with only the portion above that floor deductible.check_circle Correct
B2 percent of her adjusted gross income, the same floor that applied to miscellaneous itemised deductions.
C10 percent of her adjusted gross income, the floor in effect before recent changes.
D7.5 percent of her taxable income after the standard deduction is subtracted.
Medical and dental expenses are deductible only to the extent they exceed 7.5 percent of adjusted gross income. Qualifying unreimbursed medical and dental expenses are an itemised deduction subject to a floor equal to 7.5 percent of adjusted gross income. Only the amount of expenses that exceeds that floor is deductible; the base for the floor is adjusted gross income, not taxable income, and the older 10 percent and the 2 percent miscellaneous floors do not apply.
Why A is correct: Unreimbursed qualifying medical and dental expenses are deductible only to the extent they exceed 7.5 percent of adjusted gross income, and only the excess over that floor is allowed.
Why B is wrong: The 2 percent floor applied to certain miscellaneous itemised deductions that are currently suspended, not to medical expenses, so it is the wrong threshold here.
Why C is wrong: A 10 percent floor applied in some earlier years, but the medical floor is 7.5 percent of adjusted gross income for 2024, so this overstates the threshold.
Why D is wrong: The percentage is correct but the base is wrong; the floor is measured against adjusted gross income, not taxable income, so this option misstates the calculation base.
What you must be able to do. Compute the regular income tax using brackets and the preferential rates, identify and base the net investment income tax correctly, work the alternative minimum tax adjustments, and calculate self-employment and household employment taxes with the estimated tax safe harbours.
In one sentenceTurning taxable income into tax: progressive brackets and preferential rates, the net investment income tax, the alternative minimum tax, and the self-employment, household, and estimated tax mechanics.
Recall check: answer these from memory first
State the two conditions that trigger the net investment income tax and the exact base the 3.8 per cent rate is applied to.
List items included in net investment income and the main items excluded from it.
Give the estimated tax safe harbour percentages and the deductible portion of self-employment tax.
What it tests. Computing the regular tax with progressive brackets and the preferential rates on qualified dividends and long-term capital gains, then layering on the 3.8 per cent net investment income tax where it applies. It tests alternative minimum tax adjustments, preferences, and the exemption phase-out, self-employment tax on Schedule SE including the deductible portion, household employment taxes, and the estimated tax safe harbour rules that avoid the underpayment penalty.
How to study it. Drill the net investment income tax as a formula, because it is the most tested computation in this domain: it applies only when the taxpayer has net investment income and modified adjusted gross income over the threshold, and the base is the lesser of net investment income or the excess of modified adjusted gross income over that threshold. Learn what is and is not net investment income (wages and active business income are out, interest, dividends, capital gains, and passive rents are in). For estimated tax, memorise the 90 per cent current-year and 100 per cent prior-year safe harbours, and remember the deductible half of self-employment tax.
Easy to confuse
Net investment income tax base as the lesser amount versus the whole excess. The 3.8 per cent applies to the lesser of net investment income or the amount by which modified adjusted gross income exceeds the threshold, not to the whole excess and not to all of modified adjusted gross income. The distractors offer the full excess or the entire modified adjusted gross income as the base.
Net investment income tax needing both conditions versus high income alone. The tax requires both net investment income and modified adjusted gross income over the threshold; a high earner with only wages or only active self-employment income is not subject to it. The trap picks the wage earner or active business owner whose income merely exceeds the threshold.
Wages and active business income excluded from net investment income versus included. Net investment income covers interest, dividends, capital gains, and passive rents, but excludes wages and compensation for services and income from an active trade or business. The distractor pulls wages or materially-participated business income into the calculation.
Worked example from the SEE-1 bank
lock_openFree sampleTaxationmedium
Four single taxpayers each report 2024 modified adjusted gross income above 200,000 dollars but have different income mixes. Damien Fortescue has only wage income; Priya Venkataraman has only self-employment income from an active business she materially participates in; Rosalind Achterberg has substantial taxable interest and dividend income; and Theodore Mwangi has only a fully taxable distribution from his traditional 401(k). Which taxpayer is most clearly subject to the Net Investment Income Tax for 2024?
ADamien Fortescue, because his wages push his modified adjusted gross income above the 200,000 dollar single threshold.
BPriya Venkataraman, because her self-employment earnings are investment-type returns on the capital in her business.
CRosalind Achterberg, because she has net investment income and modified adjusted gross income above the single threshold.check_circle Correct
DTheodore Mwangi, because his retirement plan distribution is income earned from invested funds.
The Net Investment Income Tax applies only when a taxpayer has net investment income AND modified adjusted gross income above the filing-status threshold. The 3.8 percent Net Investment Income Tax under the statute applies only when two conditions coincide: the taxpayer has net investment income and modified adjusted gross income exceeds the threshold for the filing status. Wages, active trade or business self-employment income, and qualified retirement plan distributions are all excluded from net investment income, so only the taxpayer with interest and dividends both crosses the threshold and has a taxable base.
Why A is wrong: Crossing the modified adjusted gross income threshold is necessary but not sufficient; the tax also requires net investment income, and wages are specifically excluded from that category, so Damien has no base to tax.
Why B is wrong: Income from an active trade or business in which the taxpayer materially participates is not net investment income; self-employment earnings are subject to self-employment tax, not the Net Investment Income Tax.
Why C is correct: Interest and dividends are net investment income, and she also exceeds the 200,000 dollar single modified adjusted gross income threshold, so both conditions for the 3.8 percent tax are met.
Why D is wrong: Distributions from qualified retirement plans such as a 401(k) are expressly excluded from net investment income, so the distribution does not create a Net Investment Income Tax base even though it raises adjusted gross income.
What you must be able to do. Recommend sound year-end planning, match a taxpayer to the correct form of spousal relief, and identify the right penalty, statute of limitations, and amendment procedure for a given situation.
In one sentenceThe advisory side: year-end planning moves, the three forms of joint-return relief, and the penalties, limitation periods, and amended-return mechanics you counsel clients on.
Recall check: answer these from memory first
Distinguish innocent spouse relief, separation of liability, equitable relief, and injured spouse relief in one line each.
Give the general, substantial-omission, and fraud statutes of limitations for assessment, measured from what date.
State the accuracy-related penalty rate for a substantial understatement and how it differs from the fraud and failure-to-file penalties.
What it tests. Year-end planning strategies such as timing income and deductions, adjusting withholding, and optimising retirement contributions, including the traditional versus Roth trade-off. It tests the three forms of relief for joint filers - innocent spouse relief, separation of liability, and equitable relief - and distinguishes them from injured spouse relief. It covers the accuracy-related and other penalties, the three-year and six-year statutes of limitations, and the Form 1040-X amendment procedure.
How to study it. Build a relief decision chart: innocent spouse relief for an understatement the requesting spouse did not know of, separation of liability to split the understatement between former or separated spouses, equitable relief as the discretionary fallback, and injured spouse relief as the separate remedy for a refund seized for the other spouse's debt. Memorise the limitation periods - three years general, six years for a substantial omission over 25 per cent, no limit for fraud or a non-filed return - and the penalty rates, especially the 20 per cent accuracy-related penalty for a substantial understatement.
Easy to confuse
Innocent spouse relief versus separation of liability versus injured spouse relief. Innocent spouse relief covers an understatement the requesting spouse did not know of regardless of current marital status; separation of liability splits the understatement between divorced or separated spouses; injured spouse relief is the unrelated remedy for a joint refund seized for the other spouse's separate debt. The exam offers all three and tests whether you read the facts for which applies.
Three-year assessment statute versus the six-year or two-year period. The general assessment period is three years from filing; six years applies only to a substantial omission of more than 25 per cent of gross income, and there is no two-year assessment statute for this. The distractor applies the six-year period to an ordinary return or invents a two-year limit.
Accuracy-related penalty versus the fraud or failure-to-file penalty. A substantial understatement with no fraud draws the 20 per cent accuracy-related penalty, distinct from the 75 per cent fraud penalty, the 5 per cent per month failure-to-file penalty, and the 0.5 per cent per month failure-to-pay penalty. The trap matches the wrong penalty and rate to a non-fraudulent understatement.
Worked example from the SEE-1 bank
lock_openFree sampleAdvising the Individual Taxpayermedium
Maria Delgado filed a joint return with her former husband. He had understated income from a side business, and Maria can show she did not know and had no reason to know of the understatement when she signed. She is still legally married to him and they live in the same household. Which form of spousal relief is designed for a taxpayer in Maria's circumstances?
AInnocent spouse relief, available where an understatement is attributable to the other spouse and the requesting spouse did not know and had no reason to know of itcheck_circle Correct
BSeparation of liability relief, which allocates the understatement between the spouses as if they had filed separately
CInjured spouse relief, which returns the requesting spouse's share of a joint refund applied to the other spouse's separate debt
DEquitable relief, the discretionary fallback that becomes the only avenue once both the knowledge test and the marital-status requirements have failed
Identify innocent spouse relief as the branch for an understatement the requesting spouse did not know of, regardless of current marital status. Innocent spouse relief turns on an understatement attributable to the other spouse plus a lack of actual or constructive knowledge; unlike separation of liability, it carries no requirement that the spouses be divorced or living apart, so an electing spouse can remain married and in the same household.
Why A is correct: Section 6015(b) innocent spouse relief fits exactly: there is an understatement attributable to the other spouse's erroneous item, the requesting spouse did not know and had no reason to know of it, and it would be inequitable to hold her liable; marital status and household are not bars to this branch.
Why B is wrong: Separation of liability under Section 6015(c) requires that the requesting spouse be divorced, legally separated, widowed, or living apart from the other spouse for the 12 months before the request; because Maria remains married and in the same household, she does not qualify for this branch.
Why C is wrong: Injured spouse relief, claimed on Form 8379, addresses a refund offset for a spouse's separate past-due obligation such as child support; it does not relieve a spouse of liability for an understatement of tax and so does not address Maria's situation.
Why D is wrong: Equitable relief under Section 6015(f) is a discretionary fallback available only when relief is not available under the other two branches; because Maria satisfies the innocent spouse knowledge test, she qualifies under that branch and need not rely on equitable relief.
What you must be able to do. Build the gross estate and reach the taxable estate on Form 706, apply the gift tax annual exclusion, splitting, and unified credit on Form 709, and identify the FBAR, FATCA, and foreign tax credit obligations for taxpayers with foreign activity.
In one sentenceThe returns beyond the 1040: the federal estate tax and portability on Form 706, the gift tax and its exclusions on Form 709, and the foreign reporting and credit rules for international taxpayers.
Recall check: answer these from memory first
List three categories of property included in the federal gross estate, and say what makes life insurance and a revocable trust includible.
State what is required to preserve a deceased spouse's unused exclusion through portability, and on which form.
Give the FBAR aggregate balance trigger and explain how it differs from the Form 8938 reporting regime.
What it tests. Determining the gross estate, the deductions that reduce it to the taxable estate, the applicable exclusion amount, and portability of a deceased spouse's unused exclusion on Form 706. It tests the gift tax annual exclusion per donee, the tuition and medical payment exclusions, gift splitting, and the unified credit on Form 709. It covers the FBAR (FinCEN Form 114) and Form 8938 reporting regimes and the foreign tax credit on Form 1116.
How to study it. Learn the gross estate inclusion rules as a checklist: solely owned property, life insurance the decedent had incidents of ownership in, and assets in a revocable living trust are all included, while the inclusion rule, not legal title, controls. Memorise that portability requires an affirmative election on a timely filed Form 706 even when no tax is due. For the foreign rules, fix the two separate triggers in mind: the FBAR at a $10,000 aggregate account balance and Form 8938 at much higher specified-asset thresholds, applied independently of each other.
Easy to confuse
Gross estate inclusion by rule versus exclusion by legal title or beneficiary. Life insurance with retained incidents of ownership, revocable-trust assets, and solely owned accounts are all pulled into the gross estate by specific inclusion rules, even though proceeds go to a named beneficiary or title sits in a trust. The distractor excludes an asset because of who received it or where title rested.
Portability by Form 706 election versus automatic or Form 709 transfer. Preserving a deceased spouse's unused exclusion requires the executor to make the portability election on a timely filed Form 706, even with no estate tax due; it is not automatic and is not done on Form 709. The trap says portability applies by operation of law or is claimed later on the survivor's return.
FBAR $10,000 trigger versus Form 8938 specified-asset thresholds. The FBAR is required once foreign accounts aggregate over $10,000 at any point in the year, independently of the much higher Form 8938 thresholds, so a taxpayer can owe the FBAR while owing no Form 8938. The distractor folds the two regimes together or denies any obligation because the Form 8938 threshold was not met.
Worked example from the SEE-1 bank
lock_openFree sampleSpecialised Returns for Individualshard
Eleanor Whitcombe, a US citizen, died in 2024. At her death she owned a life insurance policy on her own life that paid 800,000 dollars to her adult son, a brokerage account held solely in her name, and a holiday cottage she had transferred to a revocable living trust during her lifetime, retaining the power to revoke it. Which of these is excluded from her federal gross estate on Form 706?
AThe life insurance proceeds, because they were paid directly to a named beneficiary rather than to the estate.
BThe holiday cottage in the revocable living trust, because legal title had already passed to the trust before death.
CThe solely owned brokerage account, because liquid investment accounts pass outside the gross estate.
DNone of these three assets is excluded, because each is brought into her gross estate under a separate inclusion rule on these facts.check_circle Correct
Recognise that solely owned property, life insurance with retained incidents of ownership, and revocable-trust assets are all included in the federal gross estate. Gross estate inclusion turns on ownership and retained powers at death, not on whether an asset avoids probate. Section 2033 captures owned property, Section 2042 captures insurance with retained incidents of ownership, and Section 2038 captures revocable transfers, so none of the three assets escapes the estate.
Why A is wrong: It is tempting because policy proceeds payable to a named beneficiary bypass probate, but probate avoidance does not control estate inclusion. Because 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.
Why B is wrong: Funding a revocable trust feels like a completed transfer that removes the asset from the estate, but the retained power to revoke makes the transfer incomplete for estate-tax purposes. Section 2038 includes property over which the decedent kept the power to alter, amend, or revoke, so the cottage stays in the gross estate.
Why C is wrong: Some candidates assume only real property is taxed in the estate, but the form of the asset is irrelevant. A brokerage account titled solely in the decedent's name is property she owned at death and is included under Section 2033.
Why D is correct: Correct. Property owned solely by the decedent is included under Section 2033, life insurance on the decedent's life with retained incidents of ownership is included under Section 2042, and revocable-trust property is included under Section 2038, so every listed asset is part of the gross estate.
A study plan that works
Map the blueprint and book a date
Day 1
Read the official content outline and the six domains with their weights. Book a provisional exam date now, because a fixed date converts open-ended study into a plan and is the single biggest predictor of actually sitting. Note that Part 1 is one of three parts; this guide covers individuals only.
Lock the intake mechanics (Domain 1)
Week 1
Get filing status and dependency solid before anything else, because every later number depends on them. Build a filing-status decision tree and a dependency checklist, then run scenarios through them until the year-of-death, considered-unmarried, and dependent-parent cases are automatic.
Drill income, basis, and the deduction figures (Domains 2 and 3)
Weeks 2-3
These two carry the most weight. Memorise the basis and holding-period mechanics, the Section 121 tests, the wash sale rule, and the Schedule A floors and caps as exact numbers. Sort the credits into refundable and non-refundable and learn each eligibility gate. Use scenario questions, not flashcards alone.
Work the tax computations (Domain 4)
Week 4
Practise the formulas until you reproduce them from memory: the net investment income tax base as the lesser of two amounts, the alternative minimum tax add-backs, self-employment tax and its deductible half, and the estimated tax safe harbours. The wrong answers here are the results of the shortcuts the formulas prevent.
Cover advising and specialised returns (Domains 5 and 6)
Week 5
Learn the three forms of spousal relief versus injured spouse relief, the statutes of limitations, and the accuracy-related penalty rate. Then take the estate and gift checklists and the FBAR versus Form 8938 distinction. These are lower weight but the questions are clean marks once the categories are clear.
Practise on full scenario sets with worked explanations
Week 6
Move to full practice sets and read the explanation for every question, including the ones you got right. Part 1 distractors are the right concept with the wrong number or form, so understanding why each wrong option is wrong is where the marks are.
Sit a timed mock and close weak domains
Week 7
Take at least one full timed mock to rehearse pacing and flag-and-return, then use your per-domain accuracy to drill the domains dragging you down rather than re-reading what you already know. Repeat until every domain clears the pass line with margin on unseen questions.
Know when you're ready
Readiness for Part 1 is a score on questions you have not seen before, not a feeling that the material is familiar. Those are different things, and the gap between them is where people fail. Re-reading notes builds fluency, and fluency feels like knowledge, so confidence rises while real recall does not. The fix is to test yourself closed book: if you can produce the medical floor, the SALT cap, the net investment income tax formula, and the statutes of limitations from memory and apply them to fresh facts, you know it; if you can only recognise them when you see them, you do not yet.
Because the exam is closed book and number-specific, recognition is a trap. A figure you can pick from four options is not a figure you can recall under pressure with no prompt. Practise generating the answer before you look at the choices, then check. Trust your measured per-domain accuracy over your gut, and set the bar at clearing every domain comfortably on unseen questions across more than one session, not scraping a target once.
This guide gives you the map and the figures to memorise. The practice bank is where you find out whether you can navigate it, with a worked explanation and a reason every distractor is wrong on every question. Readiness scoring tells you when you are there. Not before.
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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.
Eliminate two options fast. Most questions have two clearly wrong figures or forms; removing them turns a hard item into a choice between the two that remain.
Watch the form name. When the question asks which form or election is required, the right answer often hinges on the form itself - Form 706 for portability, Form 1040-X to amend, FinCEN Form 114 for the FBAR.
Frequently asked questions
Is SEE Part 1 hard?
It is an intermediate, closed-book exam that tests specific figures and tests rather than vague judgement. The difficulty is precision: distractors apply the right concept with the wrong number, threshold, or form, so memorising the exact rules and drilling their application matters more than broad reading.
How long should I study for Part 1?
Most candidates are ready in six to eight weeks of focused study. Those with a tax background can move faster; those starting from scratch should spend extra time on income and assets and on deductions and credits, where the weight and the number-heavy questions sit.
Do I need a degree or prior tax experience to sit Part 1?
No. There is no degree or experience requirement to take the exam. You need a Preparer Tax Identification Number (PTIN) to practise after you pass, and you become an Enrolled Agent only after passing all three SEE parts.
What tax year does Part 1 test?
The exam tests the prior tax year for most of the testing window, so figures such as the standard deduction, exclusion amounts, and credit phase-outs follow that year. Study to the tax year the current testing window covers and confirm the year-specific numbers before you sit.
Is Part 1 open book?
No. The exam is closed book and multiple choice. You cannot look up thresholds or formulas during the test, which is why recall of the exact medical floor, SALT cap, net investment income tax base, and statutes of limitations is essential rather than optional.
Which domains should I focus on?
Income and assets and deductions and credits together make up the largest share of the exam and contain the most number-specific questions, so they deserve the most time. Taxation is also heavily computational. Preliminary work, advising the taxpayer, and specialised returns are smaller but full of clean marks once the categories are memorised.
What is the difference between a qualifying child and a qualifying relative?
A qualifying child must meet the relationship, age, residency, support, and joint return tests; a qualifying relative has no age test but must meet a gross income limit and a support test. The exam tests whether a person who fails the qualifying child tests can still be claimed as a qualifying relative.
How many practice questions should I do before booking?
Enough that every domain clears the pass line with margin on questions you have not seen before, and that you can produce the key figures from memory rather than recognise them. Quality of review matters more than raw volume: read the explanation on every question, including the ones you got right.
Is the Enrolled Agent SEE Part 1 worth it?
SEE Part 1 is worth it for tax professionals who prepare or advise on individual tax returns and want the unlimited representation rights that come with Enrolled Agent status. Passing all three SEE parts grants the EA credential, which is the only IRS-issued tax professional licence and the only one that authorises nationwide practice before the IRS without geographic restriction. For preparers who regularly handle audits, appeals, or collection matters on behalf of individual clients, the individual taxation depth tested in Part 1 directly underpins that work.
Examworthy is not affiliated with or endorsed by IRS / Prometric. This guide is original study material based on the public exam blueprint. We never reproduce live exam items. SEE-1 and related marks belong to their respective owners.
