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AICPA AICPA Certification REG

REG

Exam Code: REG

Exam Name: CPA Regulation

Updated: Jul 27, 2026

Q & A: 70 Questions and Answers

REG Free Demo download:

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AICPA REG Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Ethics, Professional Responsibilities, and Federal Tax Procedures15–25%- Federal tax procedures
  • 1. Tax return filing, penalties, and statute of limitations
    • 2. IRS authority and procedures
      - Ethics and professional conduct
      • 1. Professional responsibilities and standards
        • 2. Ethical decision-making frameworks
          Topic 2: Federal Taxation of Individuals15–25%- Individual income taxation
          • 1. Deductions and credits
            • 2. Gross income and exclusions
              Topic 3: Federal Taxation of Entities18–28%- Business entity taxation
              • 1. Partnership taxation
                • 2. S corporations taxation
                  • 3. C corporations taxation
                    Topic 4: Federal Taxation of Property Transactions12–22%- Property transactions
                    • 1. Basis computation
                      • 2. Gains and losses recognition
                        Topic 5: Business Law10–20%- Contracts and agency
                        • 1. Agency relationships and liability
                          • 2. Contract formation and enforceability
                            - Business structure law
                            • 1. UCC principles
                              • 2. Secured transactions basics

                                AICPA CPA Regulation Sample Questions:

                                1. Starr, a self-employed individual, purchased a piece of equipment for use in Starr's business. The costs
                                associated with the acquisition of the equipment were:

                                What is the depreciable basis of the equipment?

                                A) $59,125
                                B) $59,425
                                C) $58,400
                                D) $55,000


                                2. Ryan, age 57, is single with no dependents. On July 1, 1997, Ryan's principal residence was sold for the
                                net amount of $500,000 after all selling expenses. Ryan bought the house in 1963 and occupied it until
                                sold. On the date of sale, the house had a basis of $180,000. Ryan does not intend to buy another
                                residence. What is the maximum exclusion of gain on sale of the residence that may be claimed in Ryan's
                                1 997 income tax return?

                                A) $250,000
                                B) $0
                                C) $125,000
                                D) $320,000


                                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.
                                Tom's 1994 wages were $53,000. In addition, Tom's employer provided group-term life insurance on
                                Tom's life in excess of $50,000. The value of such excess coverage was $2,000.

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


                                4. Smith, an individual calendar-year taxpayer, purchased 100 shares of Core Co. common stock for
                                $ 15,000 on December 15, 1992, and an additional 100 shares for $13,000 on December 30, 1992. On
                                January 3, 1993, Smith sold the shares purchased on December 15, 1992, for $13,000. What amount of
                                loss from the sale of Core's stock is deductible on Smith's 1992 and 1993 income tax returns?

                                A) Option A
                                B) Option D
                                C) Option C
                                D) Option B


                                5. In the current year Jensen had the following items:

                                What is Jensen's AGI for the current year?

                                A) $84,000
                                B) $44,000
                                C) $62,000
                                D) $59,000


                                Solutions:

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

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