AICPA CPA Regulation : REG

  • Exam Code: REG
  • Exam Name: CPA Regulation
  • Updated: Aug 22, 2026     Q & A: 70 Questions and Answers

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AICPA REG Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Ethics, Professional Responsibilities, and Federal Tax Procedures10-20%- Treasury Department Circular 230 rules
- IRS audit, appeals, and collection procedures
- Tax preparer penalties and due diligence
- Licensing and disciplinary systems
- Ethics and responsibilities in tax practice
Topic 2: Federal Taxation of Entities28-38%- Tax-exempt organizations
- S Corporations
- C Corporations
- Partnerships and LLCs
- Book-tax differences and distributions
Topic 3: Federal Taxation of Individuals15-25%- Filing status and exemptions
- Gross income inclusions and exclusions
- Pass-through entity income reporting
- Loss limitations and tax computation
- Adjustments, deductions, and credits
Topic 4: Business Law10-20%- Agency relationships
- Secured transactions (UCC Article 9)
- Debtor-creditor relationships and bankruptcy
- Business structure legal framework
- Contracts and UCC Article 2
Topic 5: Federal Taxation of Property Transactions12-22%- Basis and holding periods of assets
- Cost recovery, depreciation, and amortization
- Recognition of gains and losses
- Like-kind exchanges and involuntary conversions
- Capital vs ordinary asset classification

AICPA CPA Regulation Sample Questions:

1. In 19X4, Smith, a divorced person, provided over one half the support for his widowed mother, Ruth, and
his son, Clay, both of whom are U.S. citizens. During 19X4, Ruth did not live with Smith. She received
$ 9,000 in Social Security benefits. Clay, a 25 year-old full-time graduate student, and his wife lived with
Smith. Clay had no income but filed a joint return for 19X4, owing an additional $500 in taxes on his wife's
income. How many exemptions was Smith entitled to claim on his 19X4 tax return?

A) 1
B) 4
C) 3
D) 2


2. During 2001, Adler had the following cash receipts:

What is the total amount that must be included in gross income on Adler's 2001 income tax return?

A) $18,400
B) $19,500
C) $19,900
D) $18,000


3. 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) $15,100
B) $14,900
C) $14,100
D) $13,900


4. John and Mary were divorced in 1991. The divorce decree provides that John pay alimony of $10,000 per
year, to be reduced by 20% on their child's 18th birthday. During 1992, John paid $7,000 directly to Mary
and $3,000 to Spring College for Mary's tuition. What amount of these payments should be reported as
income in Mary's 1992 income tax return?

A) $8,600
B) $5,600
C) $8,000
D) $10,000


5. On February 1, 1993, Hall learned that he was bequeathed 500 shares of common stock under his
father's will. Hall's father had paid $2,500 for the stock in 1990. Fair market value of the stock on
February 1, 1993, the date of his father's death, was $4,000 and had increased to $5,500 six months later.
The executor of the estate elected the alternate valuation date for estate tax purposes. Hall sold the stock
for $4,500 on June 1, 1993, the date that the executor distributed the stock to him. How much income
should Hall include in his 1993 individual income tax return for the inheritance of the 500 shares of stock,
which he received from his father's estate?

A) $4,000
B) $2,500
C) $0
D) $5,500


Solutions:

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

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