For the preparer’s desk
Topics I’ve collected from my reading and continuing education, including my notes from studying for the Enrolled Agent exam. Kept here for the desk at the Tax Shop. Step-by-step where it matters, with the authority cited.
These are working notes, not articles. If you’ve landed here as a client, you’re welcome to read along, but the pages under Topics are written for you; these are written for us.
Basis (Form 7203), at-risk (Form 6198), passive (Form 8582), and the excess business loss (Form 461), applied in sequence; the distribution-before-loss trap; the guarantee that isn’t basis; partnership differences; tracking what was suspended.
Why the IRS recharacterizes distributions as wages, the cases from Radtke to Watson, the cost approach that works for small companies, the QBI and retirement-plan interactions, 2% shareholder health insurance on the W-2, and the one-page memo that ends an exam.
Distributions in excess of stock basis as capital gain, the AAA / PTI / E&P / OAA accounts and the §1368(c) ordering for former C corporations, the §1368(e)(3) election to purge E&P, shareholder loans that are distributions, and disproportionate distributions as a second class of stock.
The Form 2553 deadline, the LLC that needs the deemed Form 8832, Rev. Proc. 2013-30 relief within 3 years and 75 days and beyond, the client who filed 1120-S for years with no election on file, inadvertent terminations, Rev. Proc. 2022-19, and when only a letter ruling will do.
Why a partner’s outside basis and the partnership’s inside basis diverge at a sale or death, the §743(b) and §734(b) adjustments, how and when the election is made and the 12-month late relief, the mandatory adjustments at $250,000, allocation under §755, depreciation of the step-up, and K-1 reporting.
What §1402(a) includes, guaranteed payments vs. distributive share, the limited partner exception of §1402(a)(13) after Renkemeyer, Castigliola, Soroban and Denham, the frozen 1997 proposed regulations, why partners can’t be W-2 employees, partner health insurance and retirement contributions, and the structures that work.
§179 vs. 100% bonus vs. MACRS and the elections with deadlines, vehicles and the 50% cliff, the allowed-or-allowable rule, when to amend and when to file Form 3115 (DCN 7) with a §481(a) adjustment, the repair regulations’ safe harbors, and recapture at sale.
My notes from studying for the Special Enrollment Examination, brought current to 2026: MACRS methods and conventions, listed property and the auto caps, Section 179 and 100% bonus, amortization and Sec. 197, depletion, and the Sec. 1231 / 1245 / 1250 recapture rules. Each page opens with an at-the-desk box, and the one-liners at the end are the rules from the practice questions.
How §461(l) caps aggregate business losses at $256,000 / $512,000 for 2026, what counts as business income (wages don’t), the Form 461 computation, how the disallowed amount becomes an NOL, the §172 80%-of-taxable-income limit, the NOL schedule the file must contain, and the planning response.
The two-part §469(c)(7) test (more than half of personal services and more than 750 hours, by one spouse alone), material participation in each rental unless the aggregation election is made, why the election is permanent and what it does to sales, what hours count, the cases taxpayers lost on the log, and the 3.8% NIIT safe harbor.
How an S corporation or partnership pays Colorado’s 4.40% at the entity level and deducts it federally outside the SALT cap, the refundable owner credit, who benefits (including standard-deduction owners) and who doesn’t, the DR 1705 and DR 0106 election, DR 0106EP estimates and the December 31 payment, guaranteed payments and loss owners excluded, nonresident owners, and the annual go/no-go.
Items marked (verify) on these pages are to be confirmed against IRS or Colorado DOR sources before the figures freeze in December. Last updated October 16, 2026.
