AICPA CPA Regulation : REG

REG real exams

Exam Code: REG

Exam Name: CPA Regulation

Updated: Jul 22, 2026

Q & A: 70 Questions and Answers

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AICPA REG Exam Syllabus Topics:

SectionWeightObjectives
Federal Taxation of Property Transactions12-22%- Basis and holding periods of assets
- Like-kind exchanges and involuntary conversions
- Cost recovery, depreciation, and amortization
- Recognition of gains and losses
- Capital vs ordinary asset classification
Federal Taxation of Entities28-38%- Book-tax differences and distributions
- C Corporations
- Partnerships and LLCs
- S Corporations
- Tax-exempt organizations
Business Law10-20%- Debtor-creditor relationships and bankruptcy
- Business structure legal framework
- Agency relationships
- Contracts and UCC Article 2
- Secured transactions (UCC Article 9)
Federal Taxation of Individuals15-25%- Filing status and exemptions
- Adjustments, deductions, and credits
- Pass-through entity income reporting
- Gross income inclusions and exclusions
- Loss limitations and tax computation
Ethics, Professional Responsibilities, and Federal Tax Procedures10-20%- IRS audit, appeals, and collection procedures
- Ethics and responsibilities in tax practice
- Treasury Department Circular 230 rules
- Licensing and disciplinary systems
- Tax preparer penalties and due diligence

AICPA CPA Regulation Sample Questions:

1. Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
In 1994, Joan received $1,300 in unemployment compensation benefits. Her employer made a $100
contribution to the unemployment insurance fund on her behalf.

A) $0
B) $2,000
C) $10,000
D) $55,000
E) $1,300
F) $2,500
G) $75,000
H) $1,000
I) $25,000
J) $500
K) $3,000
L) $50,000
M) $1,500
N) $1,250
O) $900


2. Rich is a cash basis self-employed air-conditioning repairman with 1993 gross business receipts of
$ 20,000. Rich's cash disbursements were as follows:

What amount should Rich report as net self-employment income?

A) $13,900
B) $14,900
C) $14,100
D) $15,100


3. Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
In 1994, Joan received $3,500 as beneficiary of the death benefit, which was provided by her brother's
employer. Joan's brother did not have a nonforfeitable right to receive the money while living.

A) $0
B) $2,000
C) $10,000
D) $55,000
E) $1,300
F) $2,500
G) $75,000
H) $1,000
I) $25,000
J) $500
K) $3,000
L) $50,000
M) $1,500
N) $1,250
O) $900


4. Wallace purchased 500 shares of Kingpin, Inc. 15 years ago for $25,000. Wallace has worked as an
owner/employee and owned 40% of the company throughout this time. This year, Kingpin, which is not an
S corporation, redeemed 100% of Wallace's stock for $200,000. What is the treatment and amount of
income or gain that Wallace should report?

A) $0
B) $175,000 ordinary income.
C) $175,000 long-term capital gain.
D) $200,000 long-term capital gain.


5. Farr made a gift of stock to her child, Pat. At the date of gift, Farr's stock basis was $10,000 and the
stock's fair market value was $15,000. No gift taxes were paid. What is Pat's basis in the stock for
computing gain?

A) $0
B) $10,000
C) $15,000
D) $5,000


Solutions:

Question # 1
Answer: E
Question # 2
Answer: D
Question # 3
Answer: A
Question # 4
Answer: C
Question # 5
Answer: B

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