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AICPA REG exam : CPA Regulation

REG Exam Questions
  • Exam Code: REG
  • Exam Name: CPA Regulation
  • Updated: Jul 24, 2026
  • Q & A: 70 Questions and Answers
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AICPA REG exam demo

AICPA REG Exam Syllabus Topics:

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

AICPA CPA Regulation Sample Questions:

1. 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) $0
B) $125,000
C) $250,000
D) $320,000


2. 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 1992, Joan received an acre of land as an inter-vivos gift from her grandfather. At the time of the gift,
the land had a fair market value of $50,000. The grandfather's adjusted basis was $60,000. Joan sold the
land in 1994 to an unrelated third party for $56,000.

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


3. DAC Foundation awarded Kent $75,000 in recognition of lifelong literary achievement. Kent was not
required to render future services as a condition to receive the $75,000. What condition(s) must have
been met for the award to be excluded from Kent's gross income?
I. Kent was selected for the award by DAC without any action on Kent's part.
II. Pursuant to Kent's designation, DAC paid the amount of the award either to a governmental unit or to a
charitable organization.

A) Both I and II.
B) I only.
C) II only.
D) Neither I nor II.


4. Smith made a gift of property to Thompson. Smith's basis in the property was $1,200. The fair market
value at the time of the gift was $1,400. Thompson sold the property for $2,500. What was the amount of
Thompson's gain on the disposition?

A) $1,300
B) $0
C) $2,500
D) $1,100


5. Which payment(s) is(are) included in a recipient's gross income?
I. Payment to a graduate assistant for a part-time teaching assignment at a university. Teaching is not a
requirement toward obtaining the degree.
II. A grant to a Ph.D. candidate for his participation in a university-sponsored research project for the
benefit of the university.

A) Both I and II.
B) I only.
C) II only.
D) Neither I nor II.


Solutions:

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

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