Free TCP CPA Practice Question Walkthroughs

On this page you’ll find free TCP CPA practice question walkthroughs on topics from the AICPA CPA exam blueprints for the TCP exam.

TCP I: Tax Compliance and Planning for Individuals and Personal Financial Planning

Remembering and Understanding: Recall the impact of equity compensation awards on taxable income

• RSUs (Restricted Stock Units)
• Stock Options (ISOs and NSOs)

Remembering and Understanding: Recall items included in determination and computation of Alternative Minimum Taxable income.

Application: Consider the impact to an individual’s taxable income for certain items of gross income, including imputed interest on below-market rate loan and compensation earned while employed outside the U.S.

• Imputed Interest on Below-Market Rate Loans
• Compensation Earned While Outside the U.S. (Foreign-Earned Income Exclusion)

Application: Calculate the tax on a child’s investment and other unearned income (Kiddie Tax)

Application: Consider the effect of changing tax rates and legislation on the timing of income and expense items for planning purposes given a specific scenario.

Application: Identify projected tax savings through utilization of flexible spending accounts (FSAs) and qualified health savings accounts (HSAs) for planning purposes given a specific scenario.

Application: Consider the impact of using either itemized deductions or the standard deduction for planning purposes given a specific scenario.

Application: Calculate estimated tax payments required for an individual to avoid underpayment penalties given a specific planning scenario.

Application: Calculate the potential tax savings when donating noncash property to a charitable organization given a specific planning scenario, including identification of the property to be donated to minimize the individual’s current-year tax liability.

Application: Calculate the at-risk loss limitation for an activity in which an individual materially participates, including losses from pass-through entities and losses from real estate rental activities with active participation.

Application: Calculate the passive activity loss limitations given a specific scenario, including the netting of passive activity gains and losses.

Application: Calculate utilization of suspended losses on the disposition of a passive activity for tax purposes.

Application: Calculate the amount of taxable gifts for federal gift tax purposes.

Application: Identify the potential tax savings from gifting ownership of noncash property to an individual given a specific planning scenario, including identification of the property to be gifted to minimize the donor’s future estate.

Remembering & Understanding: Demonstrate an understanding of the advantages and disadvantages of different qualified retirement plans, including traditional IRAs, Roth IRAs, 401(k)s, annuities, and employer-sponsored plans.

• Traditional IRAs
• Roth IRAs and 401(k)s
• Annuities
• Self-Employed and Small Business Retirement Plans

Remembering & Understanding: Demonstrate an understanding of the risks associated with different investment options, including equity securities, corporate bonds and municipal bonds.

• Equity Securities and Corporate Bonds
• Municipal Bonds

Remembering & Understanding: Demonstrate an understanding of planning for funding post-secondary education, including qualified tuition programs, student loans, grants and scholarships.

Remembering & Understanding: Explain how insurance is used in planning to mitigate risk, including life insurance, long-term care insurance and umbrella policies.

Remembering & Understanding: Demonstrate an understanding of the implications of legal ownership of an asset and beneficiary designations on an estate and its beneficiaries.

Application: Prepare a schedule to be used in the decision-making process to select a retirement plan from different options given a specific planning scenario, identifying the related advantages and disadvantages.

Application: Calculate the return on investment (ROI) for different investment options, net of the tax impact, given a specific planning scenario.

TCP II: Entity Tax Compliance

Remembering and Understanding: Recall the limitations on the use of net operating losses when there is an ownership change.

Application: Calculate the amount of a C corporation’s net operating loss for a given year and the related carryforward or carryback.

Application: Calculate the amount of a C corporation’s capital loss utilized in the current year and the related carryforward or carryback.

Application: Calculate a shareholder’s tax realized and recognized gain (loss) on the contribution of noncash property to a C corporation, and the C corporation’s basis in the property contributed.

Application: Calculate the tax realized and recognized gain (loss) for both a C corporation and shareholders on a nonliquidating distribution of noncash property, and the shareholders’ basis in the property received.

Application: Calculate the tax realized and recognized gain (loss) for both a C corporation and shareholders on a liquidating distribution, and the shareholders’ basis in the property received.

Application: Calculate the amount and treatment of the cash distributions to shareholders in excess of a C corporation’s current and accumulated earnings and profits (E & P).

Analysis: Review loan documents and supporting documentation to determine the tax implications of a loan between a shareholder and C corporation, including imputed interest.

Remembering & Understanding: Recall the requirements for filing a consolidated federal Form 1120 – U.S. Corporation Income Tax Return.

Application: Calculate taxable income for a consolidated federal Form 1120 – U.S. Corporation Income Tax Return, including elimination of intercompany transactions.