CTA Cheat Sheet 2026

The 30 highest-yield CTA facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What is the primary benefit of tax deferral strategies? → Moving taxable income to a later period, allowing current funds to grow
2. Which planning strategy is used by high-income taxpayers to shift business income to a lower-bracket child through employment in a family business? → Family employment strategy
3. Which of the following is considered ordinary income for federal tax purposes? → Wages and salaries
4. What is the tax treatment of a Roth IRA qualified distribution? → Tax-free and penalty-free
5. Which retirement plan allows the highest annual contribution limit for self-employed individuals in 2024? → Solo 401(k)
6. Which of the following business entities provides limited liability protection to all owners while being taxed as a partnership by default? → Limited liability company (LLC)
7. Which type of trust is used to reduce estate taxes by making an irrevocable gift of appreciating assets while retaining an income stream? → Grantor retained annuity trust (GRAT)
8. The statute of limitations for the IRS to assess additional tax on a return is generally: → 3 years from the due date or filing date, whichever is later
9. Alimony received under a divorce agreement finalized after December 31, 2018 is treated how for federal income tax purposes? → Tax-exempt
10. Which of the following is a valid strategy to avoid the 10% early withdrawal penalty from a retirement account? → Taking substantially equal periodic payments (SEPP) under Rule 72(t)
11. Portability of the estate tax exemption allows a surviving spouse to: → Use the deceased spouse's unused estate tax exemption in addition to their own
12. What is the standard for a 'more likely than not' tax position in tax practice? → The position has greater than a 50% chance of being sustained on the merits
13. Which of the following is a non-refundable tax credit? → Foreign Tax Credit
14. Which IRS program allows taxpayers to voluntarily disclose previously unreported foreign financial accounts and assets? → IRS Voluntary Disclosure Program
15. Under IRC Section 6662, the civil fraud penalty for tax underpayments attributable to fraud is: → 75% of the portion attributable to fraud
16. Qualified education loan interest is deductible up to what maximum amount per year? → $2,500
17. What is the corporate alternative minimum tax (CAMT) rate introduced by the Inflation Reduction Act? → 15%
18. What is the net operating loss (NOL) carryforward rule under the Tax Cuts and Jobs Act? → No carryback, indefinite carryforward limited to 80% of taxable income
19. Which of the following Social Security benefits are potentially taxable? → Up to 85% of benefits if combined income exceeds thresholds
20. The state and local tax (SALT) deduction is currently capped at what amount for most taxpayers? → $10,000
21. The 'bunching' strategy for charitable contributions involves: → Concentrating multiple years' donations into one year to exceed the standard deduction
22. An Offer in Compromise (OIC) based on 'Doubt as to Collectibility' is appropriate when: → The taxpayer's assets and future income are insufficient to fully pay the liability
23. The AICPA Statements on Standards for Tax Services (SSTS) provide guidance for CPAs on: → Professional standards for tax practice, including recommendations and return positions
24. Which tax form reports a self-employed individual's business income and expenses? → Schedule C
25. A tax preparer who recklessly or intentionally disregards IRS rules and regulations on a return may face a preparer penalty of: → $1,000 per return or 75% of income from the return, whichever is greater
26. A 'reportable transaction' that must be disclosed to the IRS on Form 8886 includes which of the following? → Listed transactions and other transactions with defined tax avoidance characteristics
27. Tax-loss harvesting is a strategy that involves: → Selling securities at a loss to offset capital gains
28. The generation-skipping transfer (GST) tax applies to transfers to: → Grandchildren and other skip persons
29. Unreimbursed partnership expenses paid by a partner are reported on: → Schedule E, with a notation
30. Which trust strategy is designed to last multiple generations and benefit descendants indefinitely, often avoiding estate taxes at each generation? → Dynasty trust (perpetual trust)