SIMS fall under Application & Analysis, so I pulled the list below off of the new blueprint for REG (note: since Application can be both MCQ & SIM, I sorted the blueprint by Analysis only). Using this method, most of your SIMs will fall under Area V – Federal Taxation of Entities. My guess is that C-Corps, S-Corps & Partnerships will be heavily tested in SIMS; Ethics and Bus.Law (10-20% ea) will be consigned to MCQs.
Area III — Federal Taxation of Property Transactions (12–22%)
A. ACQUISITION AND DISPOSITION OF ASSETS
2. Taxable and nontaxable dispositions
• Analyze asset sale and exchange transactions to determine whether they are taxable or nontaxable
3. Amount and character of gains and losses, and netting process (including installment sales)
• Review asset transactions to determine the character (capital vs ordinary) of the gain or loss for federal income tax purposes
• Analyze an agreement of sale of an asset to determine whether it qualifies for installment sale treatment for federal income tax purposes
B. COST RECOVERY (DEPRECIATION, DEPLETION AND AMORTIZATION)
• Compare the tax benefits of the Section 179 expense deduction vs the regular tax depreciation deduction
• Reconcile the activity in the beginning and ending accumulated tax depreciation account
Area IV — Federal Taxation of Individuals (including tax preparation and planning strategies) (15–25%)
A. GROSS INCOME (INCLUSIONS & EXCLUSIONS) – INCLUDES TAXATION OF RETIREMENT PLAN BENEFITS
• Analyze projected income for use in tax planning in future years
• Analyze client-provided documentation to determine the appropriate amount of gross income to be reported on federal Form 1040 — U.S. Individual Income Tax Return.
C. ADJUSTMENTS AND DEDUCTIONS TO ARRIVE AT ADJUSTED GROSS INCOME AND TAXABLE INCOME
• Analyze client-provided documentation to determine the validity of the deductions taken to arrive at adjusted gross income or taxable income on federal Form 1040 — U.S. Individual Income Tax Return.
E. LOSS LIMITATIONS
• Analyze projections to effectively minimize loss limitations for federal income tax purposes for an individual taxpayer
• Determine the basis and the potential application of at-risk rules that can apply to activities for federal income tax purposes
Area V — Federal Taxation of Entities (including tax preparation and planning strategies) (28–38%)
A. TAX TREATMENT OF FORMATION AND LIQUIDATION OF BUSINESS ENTITIES
• Compare the tax implications of liquidating distributions from different business entities
• Analyze the tax advantages and disadvantages in the formation of a new business entity
B. DIFFERENCES BETWEEN BOOK AND TAX INCOME (LOSS)
• Reconcile the differences between book and taxable income (loss) of a business entity.
C. C-CORPORATIONS
2. Net operating losses and capital loss limitations
• Analyze the impact of the charitable contribution and/or dividends received deductions on the net operating loss calculation of a C corporation
• Analyze the impact of potentially expiring net operating and/or capital losses during tax planning for a C corporation
3. Entity/owner transactions, including contributions, loans and distributions
• Reconcile an owner’s beginning and ending basis in C corporation stock for federal income tax purposes
D. S-CORPORATIONS
2. Determination of ordinary business income (loss) and separately stated items
• Analyze both the accumulated adjustment account and the other adjustments account of an S corporation for federal income tax purposes
• Analyze the accumulated earnings and profits account of an S corporation that has been converted from a C corporation
• Analyze components of S corporation income/deductions to determine classification as ordinary business income (loss) or separately stated items on federal Form 1120S — U.S Income Tax Return for an S Corporation.
3. Basis of shareholder’s interest
• Analyze shareholder transactions with an S corporation to determine the impact on the shareholder’s basis for federal income tax purposes
4. Entity/owner transactions (including contributions, loans and distributions)
• Analyze the shareholder’s impact of an S corporation’s loss in excess of the shareholder’s basis for federal income tax purposes
• Analyze the federal income tax implication to the shareholders and the S corporation resulting from shareholder contributions and loans as well as S corporation distributions and loans to shareholders
E. PARTNERSHIPS
1. Determination of ordinary business income (loss) and separately stated items
• Analyze components of partnership income/deductions to determine classification as ordinary business income (loss) or separately stated items on federal Form 1065 — U.S Return of Partnership Income
2. Basis of partner’s interest and basis of assets contributed to the partnership
• Analyze partner contributions to the partnership to determine the impact on the partner’s basis for federal income tax purposes
4. Transactions between a partner and the partnership (including services performed by a partner and loans)
• Analyze the tax implications of a partner transaction with the partnership (such as services performed by a partner or loans) to determine the impact on the partner’s tax basis for federal income tax purposes
5. Impact of partnership liabilities on a partner’s interest in a partnership
• Analyze the impact of partnership liabilities as they relate to the general partners and limited partners for federal income tax purposes
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