This course discusses the cash vs. the accrual methods of accounting. It then moves into an examination of the characteristics of the various forms of business, with an eye toward the selection of the most appropriate form of business. The course concludes with a discussion of the rules and calculations involved in the home-office expense deduction, including the relatively new simplified safe harbor method.

2-1 Identify characteristics, advantages and disadvantages of the cash or accrual method of accounting.
2-2 Evaluate a situation to select the most appropriate method of tax accounting to use.
2-3 Identify an advantage or disadvantage of a particular method of inventory valuation.
2-4 Explain characteristics, advantages, or disadvantages of a business form.
2-5 Identify requirements for a valid S corporation election.
2-6 Evaluate a situation to recommend the most appropriate business form.
2-7 Analyze a situation to calculate the allowable home-office deduction.

Author: Michael B. Cates, MS, CRPS®, CFP®

Michael B. Cates, MS, CRPS®, CFP® joined the College in 1986, and is the professor for the Income Tax Planning course of the CFP Certification Professional Education Program. He received his CFP® certification in 1995, and completed the College’s Master of Science degree program in 1997. Mike is also the lead professor for the introductory Income Tax Planning course in the College’s master’s program. In addition to his responsibilities at the College, Mike also maintains a tax planning and preparation firm in Aurora, Colorado. You can reach Mike at

Complexity Level: Intermediate