EA Exam Part 2: Businesses
Business taxation requires distinguishing the entity's federal classification, its tax return, and how transactions affect owners.
Content domains to study
Business entities and considerations
Sole proprietors, LLC classifications, partnership allocations and basis, S elections and corporate distributions.
Business tax preparation
Gross receipts, inventory, accounting, expenses, payroll, MACRS, capitalization, Form 1065, Form 1120 and Form 1120-S.
Specialized returns and taxpayers
Estates and trusts, exempt organizations, retirement plans, rentals and farming.
Practice rule application
A domestic LLC with two unrelated members and no corporate election generally defaults to partnership taxation. The one-owner default differs, and an S election is a separate step.
Use the current official material
Check the IRS examination requirements and the latest PSI content outline. The 2026–2027 SEE generally applies calendar 2025 tax law and has a 3.5-hour exam per part. Verify current tax rules rather than relying on outdated preparation notes.
IRS Publication 541 · IRS Publication 946 · IRS SEE FAQs
Independent teaching resource. Not official test items; no pass guarantee. Comprehensive paid course enrollment is not yet available.