PART VII: Additional & Specialized Topics

In this section

• Chapter 23: Expanded State & Local Tax (SALT) Topics
  • Pass-Through Entity Taxes & Elective Workarounds
    Explore how states have evolved pass-through entity tax regimes to mitigate SALT deduction limits and discover key CPA exam insights on elective workarounds.
  • Nexus & Apportionment Formula Variations
    Explore how state tax nexus is established and the diverse methods states use to apportion income, including single-sales factor, cost-of-performance, and market-based sourcing, with practical multi-state corporate examples and illustrations.
  • Local Jurisdiction Compliance & Credits
    City-level taxes, specialized local tax credits, and strategies for navigating combined compliance burdens in CPA Tax Compliance and Planning.
  • SALT Planning Opportunities & Risk Areas
    Explore key SALT planning strategies, proactive measures to minimize double taxation, and potential risk areas or conflicts that CPAs should carefully navigate for optimal compliance and planning.
• Chapter 24: Specialized Industry Applications
  • Agriculture & Farming (Special Deductions, Depreciation)
    Explore farm income averaging, soil and water conservation expenses, and specialized depreciation schedules for agricultural machinery and livestock. Learn how these rules interconnect with CPA exam requirements to ensure accurate tax compliance and planning in the farming industry.
  • Oil & Gas Ventures (IDCs, Percentage vs. Cost Depletion)
    Explore Oil & Gas Accounting for Intangible Drilling Costs (IDCs) and the nuances between Percentage and Cost Depletion. Learn typical partnership structures in resource extraction, including tax implications, best practices, and real-world illustrations.
  • Real Estate Professionals & Tax Complexities
    A comprehensive guide for CPA candidates on the real estate professional classification, passive activity exceptions, and depreciation grouping strategies under IRC §469.
  • Niche Credits & Deductions for Specific Industries
    Explore rarely used federal tax credits, including Orphan Drug and Short-Line Railroad, addressing qualification, calculation, compliance, and advanced planning scenarios for specialized sectors.
• Chapter 25: Advanced IRS Procedures & Controversies
  • FAST Track Settlement, Appeals & Mediation Methods
    Learn about the intricacies of alternative dispute resolution processes within the IRS framework, including timelines, success rates, and mediation best practices for CPA candidates.
  • Formal Protest Letters & Litigation Tactics
    Learn how to craft effective protest letters and navigate litigation pathways in U.S. Tax Court vs. District Court to resolve complex IRS disputes.
  • Exam-Triggers & Strategies to Minimize Adjustments
    Discover common IRS red flags, from large Schedule C losses to disproportionate charitable deductions, and learn proven strategies with thorough documentation to minimize tax adjustments during examinations.
  • Working with Private Letter Rulings & Technical Advice
    Explore the formal IRS request process for Private Letter Rulings and Technical Advice, including best practices for presenting legally precise facts and questions to ensure clarity and compliance.
• Chapter 26: Expanded Tax Credits & Incentives
  • R&D Credit (Qualified Expenses, Start-Up Rules)
    Explore the nuances of qualifying research under IRC Section 41, understand the techniques for identifying allowable R&D expenditures, and learn about reduced credit implications for wages already counted under other credits.
  • Energy Efficiency Credits (Renewable Energy, Electric Vehicles)
    Discover key insights into U.S. federal credits for renewable energy systems and electric vehicles, including eligibility, filing procedures, basis reductions, and recapture considerations.
  • Employment Credits (Work Opportunity, Employee Retention)
    Explore essential employment tax credits, including WOTC and Employee Retention, with eligibility requirements, targeted groups, COVID provisions, and practical examples for CPA candidates.
  • Interplay with Deductions & Recapture Triggers
    Explore how tax credits intersect with deductible expenses and trigger partial recaptures when credit requirements are not maintained.
• Chapter 27: Advanced Estate & Gift Integration
  • Business Valuation & Estate Freezes (FLPs, GRATs)
    Learn how careful business valuation and estate freeze strategies, including Family Limited Partnerships (FLPs) and Grantor Retained Annuity Trusts (GRATs), can help shift future appreciation out of an estate and reduce transfer tax liabilities.
  • Closely Held Entities, FLP Discounts & IRC §2701–2704 Rules
    Examination of Family Limited Partnerships, closely held entity valuations, and the impact of IRC §§2701–2704 on estate and gift tax planning strategies.
  • Coordinating Trusts & Entity Structures for Generational Shifts
    Explore advanced planning techniques for intergenerational wealth transfer, integrating QTIP trusts, IC-DISCs, and charitable components to optimize tax efficiency and preserve family legacies.
  • Advanced Post-Mortem Planning (QSST, ESBT)
    Explore in-depth how Qualified Subchapter S Trusts (QSST) and Electing Small Business Trusts (ESBT) handle S corporation ownership transfers after a shareholder’s death, including distribution vs. retention strategies.
• Chapter 28: Extended Illustrative Worksheets & Schedules
  • Complex K-1 Computations & Special Allocations: Mastering Guaranteed Payments and Basis Adjustments
    Dive deep into advanced Form K-1 reporting intricacies, including guaranteed payments, special allocations, and carryover basis changes to ensure accurate partnership taxation and CPA exam success.
  • AAA/E&P Multi-Year Tracking & Dividend Classification
    Explore multi-year Accumulated Adjustments Account (AAA) fluctuations in S corporations, how Earnings & Profits (E&P) interrelate with distributions, and when leftover E&P can trigger capital gains—all through detailed examples and diagrams.
  • Multi-State Apportionment Worksheets & Partnerships
    Explore multi-state apportionment factors, worksheets, and partial nexus considerations for partnerships, with step-by-step examples and best practices.
  • Comprehensive End-to-End Examples & Step-by-Step Calculations
    Explore integrated, real-world tax scenarios combining partnership distributions, 1031 exchanges, multi-jurisdiction compliance, and more, with step-by-step guidance and calculations.