Podcast
Finance Exam Prep
Hosted by Ran Chen, EA, CFP® · EN
Finance Exam Prep is a daily podcast designed to help future tax and finance professionals pass their certification and licensing exams with clarity and confidence.
Built and operated by OpenExamPrep, this podcast breaks down major tax exams into focused, easy-to-digest episodes covering the CPA & Enrolled Agent (EA) Exam, including Part 1 (Individuals), Part 2 (Businesses), and Part 3 (Representation, Practices, and Procedures). Each episode targets one key tax concept, common exam trap, or high-frequency test topic—making it ideal for studying during commutes, workouts, or short study sessions.
Created by Ran Chen, EA, CFP®, a financial professional and exam specialist who has personally passed multiple professional licensing exams, Tax Exam Prep was developed from firsthand experience with how complex—and often poorly explained—tax exam material can be. The goal is simple: make tax exam preparation clearer, more accessible, and more effective through structured explanations and modern learning tools. Whether you’re preparing for the EA Exam, transitioning into a tax career, or reviewing before test day, this podcast is designed to guide you step by step—one concept at a time.
Free practice tools, AI-powered explanations, and additional exam prep resources are available at: https://open-exam-prep.com/
25episodes
Episodes
Newest firstAll episodes
Enrolled Agent Exam [Part 2] 38, UNICAP — §263A Capitalization Rules
6d ago00:03:25Tap to summarizeThis 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: - That UNICAP (§263A) requires producers and resellers to capitalize both direct and indirect costs into inventory, delaying the deduction until the goods are sold. - The critical small business exception threshold, which for 2024 exempts businesses with three-year average annual gross receipts of $30 million or less. - To identify capitalizable indirect costs like factory overhead, storage, and purchasing, which differ from immediately deductible expenses like marketing or R&D. - The names of allocation methods like the simplified production method and the simplified resale method, which are tested for recognition on the exam. - How to spot exam questions that test the gross receipts threshold to determine if a taxpayer is subject to UNICAP rules. 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
Transcribe →Enrolled Agent Exam [Part 2] 37, Ordinary and Necessary Expenses — §162
1w ago00:03:34Tap to summarizeThis 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 two-prong test for deductibility: an expense must be both ordinary (common in the trade) and necessary (helpful and appropriate). - How the unwritten "reasonable in amount" rule prevents deductions for lavish or extravagant expenses. - The critical difference between a currently deductible repair and a capital expenditure that must be depreciated over time. - Why expenses that violate public policy, such as government fines, penalties, and illegal payments, are never deductible. - Common exam traps involving personal expenses disguised as business costs and how to identify the primary purpose of an expense. 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
Transcribe →Enrolled Agent Exam [Part 2] 36, Gross Receipts and Cost of Goods Sold
1w ago00:03:16Tap to summarizeThis 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: - Gross Receipts represents the total sales revenue a business receives from all sources before any expenses are subtracted. - The Cost of Goods Sold (COGS) formula is: Beginning Inventory + Purchases & Other Direct Costs - Ending Inventory. - Only direct costs, such as raw materials and direct labor, are included in COGS; indirect expenses like marketing or administrative salaries are deducted separately. - Businesses must account for inventory and calculate COGS if the production, purchase, or sale of merchandise is a significant income-producing factor. - On Schedule C for a sole proprietorship, COGS is calculated in Part III and then used in Part I to determine the business's gross profit. 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
Transcribe →Enrolled Agent Exam [Part 2] 35, Related-Party Transactions and §267
1w ago00:03:17Tap to summarizeThis 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: - Losses on sales between related parties as defined under §267 are disallowed for the seller. - A related party buyer can use the seller's previously disallowed loss to offset a future gain on the sale of that same property. - An accrual-basis taxpayer must defer deducting an expense owed to a related cash-basis taxpayer until the recipient includes the amount in income. - Related parties include immediate family (spouses, ancestors, lineal descendants, siblings) and entities where a taxpayer has more than 50% direct or constructive ownership. - Constructive ownership rules attribute stock ownership from one family member to another, which can trigger the related-party transaction rules. 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
Transcribe →Enrolled Agent Exam [Part 2] 34, Tax Year Changes — Form 1128
1w ago00:03:27Tap to summarizeThis 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: - Why IRS approval, requested via Form 1128, is generally required to change a tax year. - That a change in tax year creates a short-period return for the months between the old and new year-ends. - How to perform the three-step calculation to annualize income and determine the tax for a short period. - That certain corporations can receive automatic approval for a tax year change under Rev. Proc. 2006-45. - To recognize the common exam trap of forgetting to prorate the annualized tax back to the short period. 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
Transcribe →Enrolled Agent Exam [Part 2] 33, Form 7004 — Business Tax Extensions
2w ago00:03:35Tap to summarizeThis 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: - Form 7004 provides an automatic 6-month extension to *file* for partnerships, corporations, and trusts, not an extension to *pay*. - The form must be filed by the original due date of the tax return (e.g., March 15 for S-corps/partnerships, April 15 for C-corps/trusts for calendar-year entities). - A proper, good-faith estimate of the tax liability must be paid with the extension to avoid penalties and potential invalidation of the extension. - The exam frequently tests the distinction between filing deadlines and payment deadlines, often assessing penalties from the original due date. - The mnemonic "7004 opens the filing door, but you still pay on the original floor" helps recall the core rule. 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
Transcribe →Enrolled Agent Exam [Part 2] 32, Accounting Period Election — Calendar vs Fiscal
2w ago00:03:51Tap to summarizeThis 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 default tax year for most entities is the calendar year. - Personal Service Corporations (PSCs), S Corporations, and Partnerships are generally required to use a calendar year. - A fiscal year is permissible if there is a valid business purpose, such as meeting the 25% gross receipts test for a natural business year. - A Section 444 election allows for a fiscal year with up to a three-month deferral, but requires the entity to make 'required payments' to the IRS. - Partnerships have a specific hierarchy for determining their required tax year: majority interest, principal partners, and then the least aggregate deferral method. 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
Transcribe →Enrolled Agent Exam [Part 2] 31, Choosing the Right Entity — Tax Comparison
2w ago00:03:59Tap to summarizeThis 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: - C Corporations face a 21% entity-level tax, and profits are taxed again as dividends when distributed to shareholders, a concept known as double taxation. - S Corporations are pass-through entities that avoid double taxation, but owner-employees must pay payroll taxes on their reasonable salary. - A key advantage of S Corporations is that distributions of profit beyond the owner's reasonable salary are not subject to self-employment taxes. - The Qualified Business Income (QBI) deduction under Section 199A provides a potential 20% deduction for pass-through entity owners, a benefit not available to C Corporations. - For the Enrolled Agent exam, focus on the federal tax differences between entities, as liability protection is a state-law issue and often a distractor on test questions. 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
Transcribe →Enrolled Agent Exam [Part 2] 30, S Corp Reasonable Compensation Requirement
2w ago00:03:59Tap to summarizeThis 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: - Why the IRS closely scrutinizes S Corp shareholder compensation. - The key factors used to determine if a salary is "reasonable." - How to identify common exam traps related to distributions versus salary. - A mnemonic to remember the core elements of reasonable compensation analysis. - The tax treatment of fringe benefits for shareholder-employees. 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
Transcribe →Enrolled Agent Exam [Part 2] 29, S Corp Termination — Voluntary and Involuntary
2w ago00:03:23Tap to summarizeThis 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 an S Corp voluntarily revokes its status and the critical timing rules involved. - The four main reasons for an involuntary S Corp termination: exceeding 100 shareholders, having ineligible shareholders, issuing more than one class of stock, and violating passive income limitations. - The specifics of the passive investment income rule, which only applies to former C Corps with accumulated E&P. - The concept of an S termination year and when the termination becomes effective. - The general 5-year waiting period to re-elect S status and potential exceptions. 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
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