Passing IRS Special Enrollment Examination Part 1 (SEE 1: Individuals) requires instant recall of IRC thresholds, phaseout mechanics, and basis ordering rules across 100 multiple-choice questions (85 scored, 15 experimental) in 3.5 hours.
Quick answer
Per VoraPrep's EA analysis, mastering EA Part 1 (SEE 1: Individuals) comes down to six high-yield pillars: qualifying child vs. qualifying relative tests (CARES vs. SUPORT), above-the-line adjustments to Gross Income (IRC §62), itemized deductions vs. standard deduction stacking, refundable vs. nonrefundable tax credits (AOTC, LLC, CTC, EITC), capital asset basis & IRC §121/§1031 exclusions, and Net Investment Income Tax (IRC §1411). Practice these rules with VoraPrep's 3,228+ IRS EA practice questions.
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Key facts
- Official Governing Authority
- Internal Revenue Service (IRS) & Prometric
- Exam Format
- 100 Multiple-Choice Questions (85 scored + 15 experimental), 3.5 hours
- Passing Scaled Score
- 105 on the 40–130 IRS scale
- 4 Official SEE 1 Domains
- Preliminary Work & Taxpayer Data (16.5%), Income & Assets (20%), Deductions & Credits (20%), Taxation (20%), Advising the Individual Taxpayer (13%), Specialized Returns (10.5%)
- VoraPrep EA Coverage
- 180 interactive lessons, 3,228+ IRS SEE questions, 767 FSRS flashcards ($19/mo or $149/yr)
1. Filing Status & Dependents Matrix (IRC §1, §2, §152)
| Test / Rule | Qualifying Child (CARES) | Qualifying Relative (SUPORT) | Exam Trap on SEE 1 |
|---|---|---|---|
| Relationship | Child, stepchild, foster child, sibling, or descendant | Any qualifying relative OR lived in home all 365 days | Cousins only qualify if they live in the home all year |
| Age Limit | Under 19, or under 24 if full-time student (5+ months), or permanently disabled | None | Age is tested on Dec 31 of the tax year |
| Residency | Must live with taxpayer more than half the year (>6 months) | Relative: no residency required; Non-relative: entire year | Temporary absences (college, hospital) count as time lived at home |
| Gross Income Limit | None (child can earn $100k+ if they don't provide >50% of own support) | Gross income must be below the annual exemption threshold (taxable income only) | Tax-exempt Social Security and municipal bond interest do NOT count toward gross income unless taxed |
| Support Test | Child must not provide >50% of their own support | Taxpayer must provide >50% of the person's total support | Scholarships received by a full-time student child are ignored in the support test |
2. High-Yield Individual Formulas & Thresholds
| Concept | Formula / Statutory Rule | IRC Authority |
|---|---|---|
| Taxable Social Security Benefits | Provisional Income = AGI (excl. SS) + Tax-Exempt Interest + 50% of SS Benefits. Up to 50% taxable above base ($25k Single / $32k MFJ); up to 85% taxable above adjusted base ($34k Single / $44k MFJ). | IRC §86 |
| Medical Expense Deduction | Qualified unreimbursed medical/dental expenses minus 7.5% of AGI (Schedule A itemized only). | IRC §213 |
| Passive Activity Loss (Rental Real Estate) | Active participants (≥10% ownership + management decisions) deduct up to $25,000 against ordinary income; phases out $1 for every $2 of MAGI between $100,000 and $150,000. | IRC §469(i) |
| Net Capital Loss Deduction | Up to $3,000 ($1,500 MFS) against ordinary income per year; excess carries forward indefinitely retaining short-term vs. long-term character. | IRC §1211 / §1212 |
| Wash Sale Rule | Loss disallowed if substantially identical stock/securities acquired within 30 days before or after the sale (61-day window). Disallowed loss is added to the basis of the replacement shares. | IRC §1091 |
| Gift Basis (Dual-Basis Rule) | If sold at a gain: Donor's adjusted basis. If sold at a loss: Lower of donor's basis or FMV at date of gift. If sold between the two: No gain or loss. | IRC §1015 |
| Inherited Property Basis | Stepped up (or down) to Fair Market Value (FMV) on date of death (or alternate valuation date 6 months later if it lowers both gross estate and estate tax). Always long-term holding period. | IRC §1014 |
| Net Investment Income Tax (NIIT) | 3.8% on the lesser of Net Investment Income or MAGI exceeding $200,000 (Single/HoH) / $250,000 (MFJ) / $125,000 (MFS). | IRC §1411 |
3. Education & Family Tax Credits Comparison
| Credit | Max Amount | Refundable? | Phaseout / Key Exam Trap |
|---|---|---|---|
| American Opportunity Tax Credit (AOTC) | $2,500 per eligible student (100% of first $2,000 + 25% of next $2,000) | 40% refundable (up to $1,000) | First 4 years of postsecondary only; ≥ half-time enrollment; no felony drug conviction; phases out $80k–$90k ($160k–$180k MFJ) |
| Lifetime Learning Credit (LLC) | $2,000 per tax return (20% of up to $10,000 qualified tuition) | No (Nonrefundable) | Unlimited years (grad school & single courses qualify); per return, not per student |
| Child Tax Credit (CTC) | $2,000 per qualifying child under age 17 at year-end | Up to $1,700 refundable (ACTC, 15% of earned income > $2,500) | Child must have a valid SSN issued before the return due date; phases out at $200k ($400k MFJ) |
| Credit for Other Dependents (ODC) | $500 per dependent (children 17+, qualifying relatives, ITIN dependents) | No | Applies when dependent is not eligible for the $2,000 CTC |