Tax Law I study guide
Tax Law I · Work through your exam, one topic at a time.
Tax Law I is the first course in the federal income tax sequence taken by law students and by accounting and taxation candidates who need a working command of how the Internal Revenue Code is structured and applied. It is not a credential issued by any single body; it is a course and exam title used across JD, LLM, MST, and undergraduate tax programs, and the syllabus below is a representative map of what such a course assesses rather than an official blueprint from the IRS, a state bar, or an accrediting agency. The Tax Law I study guide has 8 sections and about 3,727 words.
01Tax Research, Authority Hierarchy, and Professional Responsibilities
This domain tests whether you can identify controlling authority for a fact pattern, rank sources by weight, and apply the professional standards that govern practice before the IRS. Questions often ask which citation is strongest, whether a position has substantial authority, and what a preparer must do when a client refuses to correct an error.
554 words, about 3 min02Gross Income: Concepts, Inclusions, and Exclusions
IRC §61 defines gross income broadly as all income from whatever source derived, including compensation for services, interest, rents, royalties, dividends, annuities, and income from discharge of indebtedness. Glenshaw Glass adds the judicial test: an undeniable accession to wealth, clearly realized, over which the taxpayer has complete dominion.
512 words, about 3 min03Deductions and Losses: Trade or Business, Production of Income, and Personal
IRC §162 allows ordinary and necessary expenses paid or incurred in carrying on a trade or business. §212 allows expenses for the production or collection of income, or for management of property held for income.
429 words, about 2 min04Property Transactions: Basis, Realized and Recognized Gain, and Nonrecognition
Under §1001, realized gain or loss is the difference between the amount realized and adjusted basis. Amount realized includes cash, fair market value of property received, and liabilities assumed or discharged.
456 words, about 2 min05Capital Gains and Losses, Section 1231, and Depreciation Recapture
IRC §1221 defines a capital asset as property held by the taxpayer, excluding inventory, depreciable business property, real property used in a trade or business, and certain self-created intangibles. Capital gains and losses are classified by holding period: short-term if held one year or less, long-term if held more than one year.
391 words, about 2 min06Tax Accounting Methods, Timing, and Inventories
IRC §446 permits the cash receipts and disbursements method, the accrual method, or a hybrid, if the method clearly reflects income. A change in method requires IRS consent under §446(e), generally via Form 3115.
457 words, about 2 min07Individual Taxation: Filing Status, Exemptions, Credits, and Estimated Payments
The five statuses are single, married filing jointly, married filing separately, head of household, and qualifying surviving spouse. Head of household requires an unmarried or considered-unmarried taxpayer who maintains a household for more than half the year for a qualifying person and pays more than half the household costs.
486 words, about 2 min08Ethics, Circular 230, and Tax Practice and Procedure
Circular 230 governs practitioners: attorneys, CPAs, enrolled agents, enrolled actuaries, and appraisers. Key rules include: §10.21: on learning of a client’s error or omission, advise the client promptly but do not disclose without consent.
442 words, about 2 min