Home / EA Course / SEE 2

Business income, inventory and at-risk

SEE 2 Chapter 11 · IRS outline 2A1, 2A2, 2A3, 2A4

Domain 2 is where a preparer earns a living. Pine Street Bakery has gift cards, wholesale orders paid in advance and flour in the freezer. Copperline Tools has a warehouse full of drill bits and a bookkeeper who's unsure what goes into cost of goods sold. Daniel's supplier has just forgiven part of an invoice. Theo starts from the top of the return, with the first line, and works down to the net income.

In this chapter

1. Gross receipts and other income
2. Cost of goods sold and inventory methods
3. Uniform capitalization rules
4. Net income and the at-risk rules
5. Cancellation of business debt

This chapter has 5 lessons and 50 practice MCQs with explanations, plus flashcards and a recall sheet.

What this chapter covers

• Gross receipts and advance payments
• cost of goods sold
• inventory methods
• uniform capitalization
• at-risk limits
• cancellation of business debt

Chapter 10: S corporations: income, basis and distributions · Chapter 12: Pay, fringe benefits, insurance, rent and the ACA