• Exam Code: REG
  • Exam Name: CPA Regulation
  • Certification Provider: AICPA
  • Corresponding Certification:AICPA Certification
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AICPA REG Exam Syllabus Topics:

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

                                AICPA CPA Regulation Sample Questions:

                                Question 1

                                On December 1, 1997, Krest, a self-employed cash basis taxpayer, borrowed $200,000 to use in her
                                business. The loan was to be repaid on November 30, 1998. Krest paid the entire interest amount of
                                $ 24,000 on December 1, 1997. What amount of interest was deductible on Krest's 1997 income tax return?

                                A. $0
                                B. $22,000
                                C. $24,000
                                D. $2,000


                                Question 2

                                Doris and Lydia are equal partners in the capital and profits of Agee & Nolan, but are otherwise unrelated.
                                The following information pertains to 300 shares of Mast Corp. stock sold by Lydia to Agee & Nolan:

                                The amount of long-term capital loss that Lydia realized in 1988 on the sale of this stock was:

                                A. $5,000
                                B. $2,500
                                C. $3,000
                                D. $0


                                Question 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.
                                The Moores received a $500 security deposit on their rental property in 1994. They are required to return
                                the amount to the tenant.

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


                                Question 4

                                Clark bought Series EE U.S. Savings Bonds after 1989. Redemption proceeds will be used for payment of
                                college tuition for Clark's dependent child. One of the conditions that must be met for tax exemption of
                                accumulated interest on these bonds is that the:

                                A. Bonds must be bought by the owner of the bonds before the owner reaches the age of 24.
                                B. Purchaser of the bonds must be the sole owner of the bonds (or joint owner with his or her spouse).
                                C. Bonds must be bought by a parent (or both parents) and put in the name of the dependent child.
                                D. Bonds must be transferred to the college for redemption by the college rather than by the owner of the
                                bonds.


                                Question 5

                                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 short-term loss.
                                B. $0
                                C. $5,000 long-term loss.
                                D. $5,000 long-term gain.


                                Solutions:

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

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