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© Copyright 2026 Ran Chen, EA, CFP®
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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/
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/
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![Enrolled Agent Exam [Part 1] 83, Health Savings Account Distributions](https://s3.castbox.fm/86/4a/85/384813c924e6aa6219be2e57ff7d294d5c_scaled_v1_400.jpg "Enrolled Agent Exam [Part 1] 83, Health Savings Account Distributions")
This 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:
• Qualified HSA distributions for medical expenses are always tax-free and penalty-free.
• Non-qualified distributions are subject to ordinary income tax plus a steep 20% penalty.
• The 20% penalty is waived if the account holder is over age 65, disabled, or deceased, though the distribution is still taxable income.
• All distributions are reported on Form 8889, where the taxpayer must prove expenses were qualified.
• Do not confuse the 20% HSA penalty with the 10% early withdrawal penalty for other retirement accounts like IRAs.
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
This 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 to identify a statutory employee on Form W-2 by looking for a check in Box 13.
• The four specific categories of statutory employees, easily remembered with the "DISH" mnemonic.
• Why statutory employees report their W-2 income on Schedule C, not as regular wages.
• The unique tax withholding rule: FICA taxes are withheld, but federal income tax is not.
• How statutory classification allows for the deduction of business expenses, a key exam concept.
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
This 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 to determine if an S corporation distribution is a tax-free return of capital or a taxable capital gain.
• The critical difference between stock basis and debt basis, and why only stock basis absorbs distributions tax-free.
• The specific year-end basis ordering rule: Income first, then Distributions, then Losses.
• How to apply the four-tier distribution system for S corps with prior C corporation Earnings and Profits (E&P).
• Why shareholder basis is the ultimate limit for deducting S corporation losses passed through on Schedule K-1.
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
This 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 gain on a partnership interest sale is split between ordinary income and capital gain.
• A partner's basis, crucial for the gain calculation, must be adjusted for all K-1 items like income, losses, and distributions.
• Section 751 "hot assets," which are unrealized receivables and inventory, are what trigger ordinary income treatment.
• Any gain remaining after accounting for the hot asset portion is treated as a capital gain.
• Partnerships must file Form 8308 to report the sale of an interest involving hot assets to both the IRS and the partner.
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
This 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 to calculate the excess business loss using the 2025 thresholds of $305,000 for single and $610,000 for joint filers.
• That any disallowed excess business loss is treated as a Net Operating Loss (NOL) carryforward to subsequent tax years.
• The critical order of loss limitations: basis, at-risk, and passive activity rules must be applied before the excess business loss limitation.
• What constitutes a trade or business for this limitation, specifically excluding gains and losses from investment activities.
• The purpose of Form 461, which is used to report and calculate the excess business loss limitation.
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
This 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 to apply the 80% taxable income limitation to Net Operating Loss deductions.
• The modern rule for NOLs is indefinite carryforward with no carryback, except for specific farming losses.
• Why nonbusiness deductions like the standard deduction cannot create or increase an NOL.
• Common exam traps, such as confusing current NOL rules with outdated pre-TCJA or temporary CARES Act provisions.
• The simple mnemonic "Eighty Forward Forever" to remember the core post-2020 NOL 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
This 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 post-TCJA rule: hobby income is fully taxable, while hobby expenses are entirely non-deductible.
• How to apply the three-out-of-five-year presumption of profit, including the special two-out-of-seven-year rule for horses.
• The purpose of the IRS's nine-factor test in determining if an activity is a business or a hobby.
• A common exam trap of confusing hobby loss rules with separate passive activity loss limitations.
• Why classifying an activity as a hobby can result in taxable income even with an overall economic loss.
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
This 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:
• Loss deductions must sequentially clear three hurdles: Basis, At-Risk, and Passive (B-A-P).
• S corp shareholders do not receive basis for entity-level debt, unlike partners in a partnership.
• At-risk amounts generally include cash invested plus recourse debt, but exclude nonrecourse financing.
• Form 6198 is used to calculate and apply the at-risk limitations to losses.
• A key exam exception allows qualified nonrecourse financing for real estate activities to be included in the at-risk amount.
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
This 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:
• Suspended passive losses are not permanently lost; they are carried forward indefinitely to future tax years.
• Carryover losses are first used to offset passive income from any source before being applied to nonpassive income.
• A complete, taxable disposition of a passive activity unlocks all suspended losses associated with that specific activity.
• Upon death, suspended losses are deductible on the final return, but reduced by the step-up in basis.
• When a passive activity is gifted, the suspended losses are added to the recipient's basis and are not deductible by the donor.
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
This 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 AOTC is a per-student credit with a 40% refundable portion, while the LLC is a per-return credit and is entirely non-refundable.
• Qualified education expenses must be reduced by tax-free assistance like scholarships and grants before any credit is calculated.
• A student who can be claimed as a dependent cannot claim an education credit, even if the parent does not claim them.
• AOTC qualified expenses include required course materials purchased from any vendor, whereas LLC expenses are more restricted.
• Taxpayers with a Married Filing Separately status are ineligible to claim either the AOTC or the LLC.
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
This 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 to reconcile Advance Premium Tax Credits (APTC) with the final allowable Premium Tax Credit (PTC) on Form 8962.
• The role of Modified AGI, the Federal Poverty Line (FPL), and the applicable figure in calculating a taxpayer’s required contribution.
• Why the second-lowest-cost silver plan, or benchmark plan, is critical for determining the final PTC amount.
• How income-based repayment limitations can cap the amount of excess APTC a taxpayer must pay back, a common exam trap.
• A mnemonic to remember the PTC calculation and reconciliation process for exam day.
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
This 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 critical difference between the $2,700 annual FICA threshold and the $1,000 quarterly FUTA threshold for household employees.
• That all household employment taxes (FICA and FUTA) are reported on Schedule H, which is filed with the employer's Form 1040.
• Why a household employee must receive a Form W-2 and never a Form 1099-NEC, a common point of confusion on the exam.
• That withholding federal income tax is optional and requires an agreement between the employer and employee via Form W-4.
• How to apply the control test to determine if a worker is an employee, triggering Schedule H, or an independent contractor.
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
This 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 cancelled debt is generally taxable income reported on Form 1099-C, but exam questions focus on the exceptions.
• The insolvency exclusion is strictly limited to the amount by which total liabilities exceed the FMV of total assets immediately before the debt cancellation.
• Debt discharged in a Title 11 bankruptcy case is always fully excluded from income, regardless of the taxpayer's solvency.
• Excluding COD income under most exceptions requires a reduction of tax attributes on Form 982 in a specific, testable order.
• Qualified Principal Residence Indebtedness exclusion requires a direct reduction to the basis of the home, not the standard attribute reduction order.
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
This 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 Section 1031 tax deferral now applies exclusively to real property and not personal property.
• How to navigate the strict 45-day identification and 180-day receipt timelines, including a common exam trap involving tax return due dates.
• The rule for recognizing gain when "boot," such as cash or debt relief, is received in an exchange.
• The essential role of a Qualified Intermediary in preventing constructive receipt of funds.
• That losses are never recognized in a like-kind exchange, a key distinction from gain recognition 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
This 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 to calculate the gross profit percentage to determine the taxable gain recognized from each payment.
• Why depreciation recapture under Sections 1245 and 1250 must be recognized in the year of sale.
• The rule prohibiting dealers from using the installment method for sales of their inventory.
• Key restrictions for installment sales of depreciable property between related parties.
• The mnemonic "Dealers, Depreciation, and Dependents Don't Defer" to remember key 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
This 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:
• Inherited property’s basis is generally its Fair Market Value (FMV) on the decedent's date of death, and the holding period is always considered long-term.
• The alternate valuation date (six months after death) can only be elected if it reduces both the gross estate value and the estate tax liability.
• If an asset is sold within six months of death and the alternate valuation date is elected, its basis is the selling price, not the FMV on the alternate date.
• In community property states, both the decedent's and the surviving spouse's shares of the property get a basis adjustment to FMV.
• Income in Respect of a Decedent (IRD), such as a traditional IRA, is a major exception and does not receive a stepped-up basis.
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
This 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:
• Learn when Form 709 is required for gifts exceeding the $19,000 annual exclusion (2025).
• Understand how taxable gifts reduce the lifetime estate and gift tax exemption, even if no tax is paid immediately.
• Distinguish between a "present interest" gift, which qualifies for the exclusion, and a "future interest" gift, which does not.
• Identify the rules for gift splitting, which allows married couples to double the annual exclusion per recipient.
• Recognize qualified transfers for tuition and medical expenses, which are unlimited and exempt from gift tax.
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
This 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 to determine if a Form 706 is required based on the gross estate and basic exclusion amount.
• Why life insurance proceeds are a common exam trap for inclusion in the gross estate.
• The critical role of the unlimited marital deduction and its U.S. citizen spouse requirement.
• When and why the portability election necessitates filing a Form 706 even for non-taxable estates.
• The standard nine-month filing deadline for Form 706 and the available extension.
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
This 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 critical difference between an Injured Spouse claim (Form 8379) for refund offsets and an Innocent Spouse claim (Form 8857) for tax liability relief.
• How to identify the specific past-due obligations, like child support or student loans, that trigger the need for an injured spouse claim.
• The two correct methods for filing Form 8379, either with the original joint return or by itself after an offset notice is received.
• How to correctly allocate income, withholding, and credits to determine the injured spouse’s rightful portion of the seized refund.
• The special allocation rules for taxpayers residing in community property states, which is a frequent exam complication.
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
This 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 distinct qualifications for Innocent Spouse Relief, Separation of Liability, and Equitable Relief under IRC Section 6015.
• How the "reason to know" standard is a critical factor for the IRS to deny Innocent Spouse Relief.
• The strict two-year deadline for filing Form 8857, which begins from the first IRS collection activity.
• Why Separation of Liability is specifically for spouses who are divorced, legally separated, or living apart.
• That Equitable Relief is the only option that can apply to an underpayment of tax, not just an understatement.
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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