EA Part 2 - Businesses

Who should prioritise Part 2 - Businesses

EA Part 2 - Businesses topic allocations

Published weight ranges or scored-question allocations from the awarding body. Use them to budget study time - larger areas deserve calendar priority.

Where EA practice should focus

Three high-leverage drills. If practice time is short, start here.

• Phase-outs and filing status (Part 1)

  Change one fact in a stem - AGI, dependent, or filing status - and re-solve. That is how the exam flips answers.

• Entity basis and distributions (Part 2)

  Practise ordering rules: income, contributions, distributions, loss limitations. Sequence errors create wrong answers even when the code section is known.

• Representation paperwork (Part 3)

  Know Form 2848, CAF, and which actions require what authority. Procedure beats instinct here.

Navigate this exam

• Business Entities and ConsiderationsBusiness Entities and Considerations has a published allocation of 30 scored questions in Part 2 - Businesses: treat it as a decision rule plus timed practice, not vocabulary alone. Business entities, accounting methods, and entity-level returns for partnerships, corporations, and other businesses.
• Business Tax PreparationBusiness Tax Preparation has a published allocation of 37 scored questions in Part 2 - Businesses: treat it as a decision rule plus timed practice, not vocabulary alone. Business entities, accounting methods, and entity-level returns for partnerships, corporations, and other businesses.
• Specialized Returns and TaxpayersSpecialized Returns and Taxpayers has a published allocation of 18 scored questions in Part 2 - Businesses: treat it as a decision rule plus timed practice, not vocabulary alone. Business entities, accounting methods, and entity-level returns for partnerships, corporations, and other businesses.
• Entity Classification ElectionsCheck-the-box and default classifications that Part 2 treats as the first decision before return preparation.
• Partnership Basis and Distribution TrapsInside/outside basis and current vs liquidating distributions — classic Part 2 confusion with S corps.
• S Corporation Basis and AAA MechanicsShareholder basis, AAA, and distribution ordering that Part 2 business-entity stems mix liberally.
• C Corporation Distribution CharacterizationDividend vs return-of-capital vs capital-gain distributions when E&P facts are incomplete.
• Accounting Methods and Inventories for BusinessesCash vs accrual eligibility and inventory methods that change taxable income on business returns.
• Business Credits and Payroll Tax ItemsEmployment-related credits and payroll tax interactions on Part 2 specialised-return domains.
• Farm and Rental Activity ReturnsSpecialised business taxpayers — material participation and passive activity overlays on entity returns.
• Exempt Organization Basics for SEEExempt-status and UBIT cues that appear in Part 2 specialised-returns weight.
• Trust and Estate Income Taxation OverlapWhere fiduciary returns touch business facts — Part 2 specialised patterns candidates under-drill.
• Depreciation on Business PropertyMACRS, §179, and listed-property limits on business returns under Part 2 preparation domains.
• Related Party Business TransactionsLoss disallowance and matching rules when related parties appear in entity fact patterns.
• Business Tax Preparation WorkflowHow Part 2 rewards a preparation sequence: entity type → method → income → deductions → credits.

How to read an EA Part 2 entity question

Troubleshooting common EA study problems

If your mocks are stuck, match the symptom and change the next week. do not just do more of the same questions.

• Part 1 scores bounce between domains

  Likely cause

  Even drilling without locking high-weight income and deduction domains.

  Next step

  Spend the next week only on your two weakest Part 1 domains by weight.

• Part 2 entity questions feel interchangeable

  Likely cause

  Studying entities in isolation without a comparison sheet.

  Next step

  Build a one-page table of basis, debt, and distribution rules across partnership, S corp, and C corp.

• Part 3 feels “easy” until mocks drop

  Likely cause

  Skimming Circular 230 instead of memorising duties and sanctions.

  Next step

  Do closed-book flash drills on practitioner duties, then re-sit a Part 3 mock.

Part 2 - Businesses FAQs

How many parts is the EA exam?

Three: Part 1 Individuals, Part 2 Businesses, and Part 3 Representation, Practices and Procedures.

How many questions are on each SEE part?

Each part has 100 multiple-choice questions, of which 85 are scored and 15 are experimental, with 3.5 hours to complete the sitting.

Does MiloPrep include all three EA parts?

Yes. The all-access subscription covers Part 1, Part 2, and Part 3 practice.

Next steps