Part 1 — Individuals Examination content outlines

Section 1: Preliminary Work and Taxpayer Data

Preliminary work to prepare tax returns

1. Use of prior years' returns for comparison, accuracy, and carryovers of current year’s return
2. Taxpayer biographical information (e.g., date of birth, marital status, dependents)
3. Residency status and/or citizenship (e.g., citizen, visas, green cards, resident alien or non-resident alien)
4. Taxpayer filing status (e.g., single, MFJ, MFS, QW, HOH)
5. Sources of all taxable and nontaxable income (e.g., interest, wages, business, sales of property, dividends, rental income, flow-through entities, alimony received) 
6. Sources of applicable adjustments to gross income (e.g., retirement plans, HSAs, alimony paid, health insurance, moving expenses, self-employment tax)
7. Sources of applicable deductions (e.g., itemized, standard) 
8. Sources of applicable credits (e.g., education, foreign tax, retirement, energy, dependent care) 
9. Sources of tax payments and refundable credits (e.g. withholding, estimated payments, earned income tax credit)
10. Previous IRS correspondence with taxpayer
11. Additional required returns filed taxes paid (e.g., employment, gifts, and information returns) 
12. Special filing requirements (e.g. foreign income, presidentially declared disaster areas, Form 1040-NR) 
13. Foreign account and asset reporting (e.g., FBAR, Form 8938)
    
    

Taxpayer data 

1. Filing requirements for tax returns and extensions (e.g., dates)
2. Personal exemptions including dependents
3. Minor children’s unearned income (Kiddie tax)

Section 2: Income and Assets 

Income

1. Taxability of wages, salaries and other earnings (e.g., earned income, statutory employee)
2. Interest Income (e.g., taxable and non-taxable) 
3. Dividends and other distributions from mutual funds, corporations, and other entities (e.g., qualified dividends)
4. Rental income and expenses (e.g., vacation homes, notfor-profit rentals, calculation of deprecation)
5. Gambling income and allowable deductions (e.g., W-2G,documentation)
6. Tax treatment of forgiveness of debt (e.g., 1099C,foreclosures)
7. Tax treatment of a U.S. citizen/resident with foreign income (e.g., individual tax treaties, form 2555)
8. Other income (e.g., scholarships, fellowships, Social Security benefits, barter income, independent contractor income, hobby income, alimony, non-taxable combat pay, unearned income, taxable recoveries)
9. Constructive receipt of income (e.g., cash vs accrual)
10. Constructive dividends (e.g., payments of personal expenses)
11. Passive income and loss (e.g., loss limitations)
12. Royalties and related expenses
    

Retirement income

1. Basis in a traditional IRA (Form 8606)
2. Comparison of, and distributions from, traditional and Roth IRAs 
3. Distributions from qualified and non-qualified plans (e.g.,  retax,after-tax, rollovers,1099R)
4. Excess contributions and tax treatment (e.g., penalties)
5. Prohibited transactions and tax effects
6. IRA conversions and recharacterizations (Form 8606)
7. Required minimum distributions and excess accumulations
8. Loans from IRC section 401(k) plans and other qualified plans
9. Taxability of Social Security benefits

Property, real and personal

1. Capital gains and losses (e.g., netting effect, short-term, long-term)
2. Basis of assets (e.g., purchased, gifted or inherited)
3. Basis of stock after stock splits and/or stock dividends (e.g., research, schedules, brokerage records)
4. Sale or disposition of property
   
5. Sale of a personal residence (e.g., Sec 121 exclusions)
6. Installment sales (e.g., related parties, original cost, date of acquisition, possible recalculations and recharacterization)
7. Options (e.g., stock, commodity,ISO, ESPP)
8. Like-kind exchange
   
9. Non-business bad debts (e.g., documentation required)

Adjustments to income

1. Self-employment tax
   
2. Retirement contribution limits and deductibility (e.g., earned compensation requirements)
3. Health savings accounts 
4. Other adjustments to income (e.g., student loan interest,alimony, moving expenses, write-in adjustments)

Section 3: Deductions and Credits

Itemized deductions

1. Medical and dental expenses
   
2. Various taxes (e.g., state income, personal property, real estate)
3. interest expense (e.g., mortgage interest, investment interest,  tracing rules, points)
4. Charitable contributions (e.g., cash, non-cash, 50% vs 30%, documentation required)
5. Nonbusiness casualty and theft losses
6. Miscellaneous itemized deductions
7. Employee travel, transportation, and entertainment expenses
8. Other employee expenses (e.g., education, reimbursement, eligibility, home office)
9. AGI limitations
   
10. Allowed itemized deductions for Form 1040-NR 

Credits

1. Child and dependent care credit
   
2. Child tax credits
   
3. Education credits
   
4. Foreign tax credit
   
5. Earned income tax credit (e.g., paid preparer’s earned income credit checklist, eligibility and disallowance)
6. Retirement contribution credit
   
7. Adoption credits (e.g., carryovers, limitations, special needs)
8. Other credits (refundable and non-refundable)

Section 4: Taxation and Advice 

Taxation

1. Alternative minimum tax
   
2. Credit for prior year minimum tax
3. Penalties and exceptions on premature distributions from qualified retirement plans and IRAs
4. Household employees
   
5. Underpayment penalties and interest
6. Conditions for filing a claim for refund (e.g., amended returns)
7. Self-employment tax
   
8. Excess social security
   
9. withholding
   
10. Tax provisions for members of the clergy

Advising the individual taxpayer

1. Reporting obligations for individuals 
2. Property sales (e.g., homes, stocks, and businesses)
3. Education planning (e.g., lifetime learning credit, IRC section 529 plans)
4. Estate planning (e.g., gift versus inheritance, trusts, family partnerships, charitable giving, LTC, life insurance) 
5. Retirement planning (e.g., annuities, IRAs, employer plans, early retirement rules, required minimum distribution, beneficiary ownership)
6. Marriage and divorce (e.g., divorce settlement, commonlaw, community property)
7. Items that will affect future returns (e.g., carryovers, net operating loss, Schedule D, Form 8801)
8. Injured spouse
9. Innocent spouse
10. Estimated Tax 
11. Adjustments, deductions, and credits for tax planning
12. Use of capital gain rates versus ordinary income rates (e.g., character of transaction)

Section 5: Specialized returns for individuals

Estate tax

1. Gross estate
   
2. Taxable estate: calculations and  payments
3. Unified credit
   
4. Jointly held property
   
5. Life insurance and taxable estate
   
6. Marital deduction and other marital issues
7. IRAs and retirement plans
   
8. Filing requirements

Gift tax

1. Gift-splitting
   
2. Annual per donee exclusion
   
3. Unified credit
   
4. Effect on estate tax (e.g., Generation skipping transfer tax)
5. Filing requirements