AICPA REG : CPA Regulation

  • Exam Code: REG
  • Exam Name: CPA Regulation
  • Updated: Oct 16, 2026
  • Q & A: 70 Questions and Answers

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AICPA REG Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Business Law15-25%- Agency, contracts, and debtor-creditor relationships
- Business structures and federal business regulations
- Legal duties and responsibilities in business transactions
Topic 2: Federal Taxation of Property Transactions5-15%- Gains and losses on disposition of assets
- Basis, cost recovery (depreciation and amortization)
Topic 3: Ethics, Professional Responsibilities and Federal Tax Procedures10-20%- Licensing and disciplinary systems for CPA practice
- Federal tax procedures, disclosures, penalties, and appeals
- Ethics and responsibilities in tax practice (Treasury Department Circular 230)
Topic 4: Federal Taxation of Individuals22-32%- Tax filing requirements and procedures
- Adjustments, deductions, exemptions and credits
- Individual taxable income and tax compliance
Topic 5: Federal Taxation of Entities23-33%- Tax compliance for corporations, partnerships, LLCs, and S corporations
- Entity-level tax planning and reporting requirements

AICPA CPA Regulation Sample Questions:

Question #1

Conner purchased 300 shares of Zinco stock for $30,000 in 1980. On May 23, 1994, Conner sold all the
stock to his daughter Alice for $20,000, its then fair market value. Conner realized no other gain or loss
during 1994. On July 26, 1994, Alice sold the 300 shares of Zinco for $25,000.
What was Alice's recognized gain or loss on her sale?

  • A. $5,000 long-term gain.
  • B. $5,000 long-term loss.
  • C. $0
  • D. $5,000 short-term loss.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Question #2

In evaluating the hierarchy of authority in tax law, which of the following carries the greatest authoritative
value for tax planning of transactions?

  • A. IRS regulations.
  • B. IRS agents' reports.
  • C. Internal Revenue Code.
  • D. Tax court decisions.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Question #3

Which of the following statements is the best definition of real property?

  • A. Real property is land and intangible property in realized form.
  • B. Real property is all tangible property including land.
  • C. Real property is land and everything permanently attached to it.
  • D. Real property is only land.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

Question #4

The uniform capitalization method must be used by:
I. Manufacturers of tangible personal property.
II. Retailers of personal property with $2 million dollars in average annual gross receipts for the 3
preceding years.

  • A. Both I and II.
  • B. II only.
  • C. I only.
  • D. Neither I nor II.
Reveal Solution  Discussion  0

Correct Answer: C  🗳️

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Question #5

Hall, a divorced person and custodian of her 12-year old child, filed her 1990 federal income tax return as
head of a household. She submitted the following information to the CPA who prepared her 1990 return:
. In 1990, Hall sold an antique that she bought in 1980 to display in her home. Hall paid $800 for the
antique and sold it for $1,400, using the proceeds to pay a court ordered judgment.
The $600 gain that Hall realized on the sale of the antique should be treated as:

  • A. Long-term capital gain.
  • B. An involuntary conversion.
  • C. Ordinary income.
  • D. A nontaxable antiquities transaction.
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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