United States
Hong KongTax Planning: 14%, and the domain that touches every other answer
Fourteen per cent of the exam, about 24 of the 170 questions on our derived counts. It covers the income tax calculation, business entity taxation, basis, capital gains and losses, reduction techniques, AMT, property transactions and charitable deductions.
Fourteen per cent directly, and a presence in almost every other domain's questions.
Retirement distributions are taxed. Investment returns are taxed. Insurance proceeds are sometimes taxed. Estates are taxed. A case study asking about any of those is asking a tax question in another costume.
What is in it
- Fundamental tax law and the calculation of income tax.
- Characteristics and income taxation of business entities.
- Basis, including the step-up at death.
- Capital gains and losses.
- Tax reduction and management techniques.
- The alternative minimum tax.
- Tax consequences of property transactions.
- Charitable contributions and deductions.
The calculation is the spine
Gross income, less adjustments, gives adjusted gross income. Less the standard or itemized deduction, and any qualified business income deduction, gives taxable income. Apply the rates, then subtract credits, then add other taxes.
Knowing where an item enters that sequence answers a great many questions. An adjustment above the line reduces AGI and therefore several phase-outs; an itemized deduction below the line does not.
Adjusted gross income drives medical expense floors, charitable limits, IRA deductibility, education credits, the net investment income tax and Medicare surcharges. Reducing AGI is worth more than reducing taxable income by the same amount.
What changed recently
The 2025 reconciliation act made several provisions permanent that had been scheduled to expire, raised the estate and gift exclusion sharply, and altered the state and local tax cap.
Study material written before it is wrong in specific and important ways - particularly anything describing a 2026 sunset of the higher exclusion, which did not happen. That is a useful currency check on any source.
How to study it
Learn the structure and the rules; hold the numbers loosely. The exam is written against a specific tax year and it is testing whether you know that a capital loss offsets capital gains and then a limited amount of ordinary income, not whether you remember the exact limit under pressure.
Where a number is genuinely fixed by statute rather than indexed - the wash sale period, the holding period for long-term treatment, the capital loss carryforward rules - those are worth memorizing exactly.
Dollar limits and rate thresholds here are indexed annually and several were changed by the 2025 reconciliation act. Confirm the current figure against the IRS before relying on it, and expect the exam to test the rule rather than the number.
Common questions
How much of the CFP exam is tax?
Fourteen per cent directly, about 24 of the 170 questions on our derived counts, plus a presence in retirement, investment, insurance and estate questions.
What is the income tax calculation sequence?
Gross income less adjustments gives adjusted gross income; less the standard or itemized deduction and any qualified business income deduction gives taxable income; apply rates, subtract credits, add other taxes.
Why does adjusted gross income matter so much?
It drives medical expense floors, charitable limits, IRA deductibility, education credits, the net investment income tax and Medicare surcharges. Reducing AGI is worth more than reducing taxable income by the same amount.
What changed with recent legislation?
The 2025 reconciliation act made several expiring provisions permanent, raised the estate and gift exclusion sharply, and altered the state and local tax cap. Material describing a 2026 sunset of the higher exclusion is out of date.
Should you memorize the dollar figures?
Hold indexed figures loosely and learn the rules exactly. Statutory numbers that do not change - the wash sale period, the long-term holding period, capital loss carryforward rules - are worth memorizing precisely.