ExpertCPA®
CPA REG Practice Exam
72 free questions · No sign-up required to browse
Comprehensive practice exam for the CPA Regulation (REG) section, covering Ethics, Business Law, and Federal Taxation (Individual, Entity, Property). Designed to simulate complex exam scenarios.
72
Questions
Hard
Difficulty
75%
Pass mark
Difficulty breakdown
Easy(1)
Medium(36)
Hard(35)
Topics covered
Browse all topics →Area 1: Ethics & ProceduresArea 1: Ethics & ProceduresArea 1: Ethics & ProceduresArea 1: Ethics & ProceduresArea 1: Ethics & ProceduresArea 1: Ethics & ProceduresArea 2: Business LawArea 2: Business LawArea 2: Business LawArea 2: Business LawArea 2: Business LawArea 2: Business LawArea 3: Individual TaxationArea 3: Individual TaxationArea 3: Individual TaxationArea 3: Individual TaxationArea 3: Individual TaxationArea 3: Individual TaxationArea 3: Individual TaxationArea 4: Entity TaxationArea 4: Entity TaxationArea 4: Entity TaxationArea 4: Entity TaxationArea 4: Entity TaxationArea 5: Property TransactionsArea 5: Property TransactionsArea 5: Property TransactionsArea 5: Property TransactionsArea 5: Property TransactionsArea 5: Property TransactionsArea 5: Property TransactionsArea 5: Property Transactions
Sample questions
Q01Hard1 mark
Under Circular 230, which of the following scenarios represents a permissible contingent fee arrangement for a practitioner representing a client before the IRS?
Q02Medium1 mark
A CPA is preparing a tax return for a client who wishes to take a position that the CPA believes has a 'reasonable basis' but does not meet the 'substantial authority' standard. To avoid a preparer penalty for an understatement of liability due to an unreasonable position, which of the following actions must the CPA take?
Q03Hard1 mark
Regarding the retention of client records under Circular 230, which of the following statements is correct when a client requests the return of their records but has not paid the practitioner's fees?
Q04Medium1 mark
Under the Ultramares rule regarding accountant liability to third parties for negligence, which of the following parties would most likely be able to recover damages from an accountant who negligently prepared a financial statement?
Q05Medium1 mark
Taxpayer A filed their Year 1 tax return on April 15, Year 2. The return omitted ,000 of gross income, which exceeded 25% of the gross income stated on the return. No fraud was involved. What is the latest date the IRS can assess additional tax?
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All questions (72)
Free to browse · no sign-up requiredQ01Under Circular 230, which of the following scenarios represents a permissible contingent fee arrangement for a practi...HardQ02A CPA is preparing a tax return for a client who wishes to take a position that the CPA believes has a 'reasonable ba...MediumQ03Regarding the retention of client records under Circular 230, which of the following statements is correct when a cli...HardQ04Under the Ultramares rule regarding accountant liability to third parties for negligence, which of the following part...MediumQ05Taxpayer A filed their Year 1 tax return on April 15, Year 2. The return omitted ,000 of gross income, which exceeded...MediumQ06A taxpayer owes ,000 in taxes on a return filed 2 months late. They also paid the tax 2 months late. Assuming no exte...HardQ07Which of the following defenses would be most effective for a CPA accused of common law fraud by a client?MediumQ08Under Section 11 of the Securities Act of 1933, which of the following must a plaintiff prove to hold a CPA liable fo...HardQ09A CPA is auditing a client's financial statements. The client refuses to provide a representation letter. The CPA dec...MediumQ10Regarding the Statements on Standards for Tax Services (SSTS), when may a tax preparer use a client's estimates to pr...MediumQ11Patterson (Principal) hired Aris (Agent) to manage an apartment complex. The employment contract explicitly stated Ar...MediumQ12Under the doctrine of Respondeat Superior, which of the following acts by an employee would most likely result in the...MediumQ13On June 1, Offeror mailed an offer to Offeree. On June 3, Offeror mailed a revocation. On June 4, Offeree received th...MediumQ14Under the Statute of Frauds, which of the following oral contracts is legally enforceable?HardQ15Seller (a merchant in Chicago) sells goods to Buyer (in New York) with shipping terms 'F.O.B. Chicago'. The goods are...MediumQ16Under UCC Article 2, the 'Perfect Tender Rule' allows a buyer to reject goods if they fail to conform to the contract...HardQ17A surety pays a debt owed by the principal debtor to the creditor. Which right allows the surety to now 'step into th...MediumQ18Creditors want to file an involuntary Chapter 7 bankruptcy petition against Debtor Corp. Debtor Corp has 15 creditors...HardQ19A bankruptcy trustee may set aside a 'preferential transfer' made by the debtor. Which of the following payments made...MediumQ20Which of the following debts is generally dischargeable in a Chapter 7 bankruptcy?MediumQ21Which of the following is a key advantage of a Limited Liability Company (LLC) over an S Corporation?HardQ22Under Regulation D, Rule 506 of the Securities Act of 1933, which of the following statements is correct regarding th...HardQ23A taxpayer's spouse died in Year 1. The taxpayer has a dependent child (age 10) living at home. The taxpayer did not ...MediumQ24An employee receives ,000 of non-discriminatory group term life insurance coverage from their employer. The cost of t...MediumQ25A single taxpayer redeemed Series EE savings bonds in Year 1. The total proceeds were ,000 (,000 principal + ,000 int...HardQ26A self-employed consultant had net earnings from self-employment of 0,000 in Year 1. The self-employment tax rate is ...MediumQ27Taxpayer (AGI 0,000) incurred the following medical expenses: Doctor bills ,000; Cosmetic surgery (elective) ,000; Pr...HardQ28A taxpayer (AGI 0,000) donated cash of ,000 to a public charity and long-term capital gain stock (FMV ,000, Basis ,00...HardQ29Taxpayer paid ,000 in investment interest expense. They had ,000 in interest income and ,000 in qualified dividends. ...HardQ30A married couple filing jointly paid the following taxes in Year 1: State income tax ,000; Real estate tax on primary...EasyQ31A single taxpayer has taxable income of 00,000 (before QBI deduction). Their sole source of income is a law practice ...MediumQ32Taxpayer (AGI 30,000) actively participates in a rental real estate activity that produced a ,000 loss. They have no ...HardQ33A taxpayer invested ,000 in a partnership (passive activity). In Year 1, their share of the loss was ,000. They had n...HardQ34A taxpayer has 2 qualifying children (under age 17). Their tax liability before credits is 0. Their earned income is ...HardQ35Taxpayer has ,000 of U.S. source income and ,000 of foreign source income. Total taxable income is ,000. The U.S. tax...MediumQ36Which of the following items is added back to regular taxable income to calculate Alternative Minimum Taxable Income ...MediumQ37A taxpayer had AGI of 60,000 in Year 1 and tax liability of 0,000. In Year 2, they expect a tax liability of 0,000. T...HardQ38Shareholder A contributes property (Basis ,000, FMV 0,000) to a newly formed C Corporation for 60% of the stock. Shar...HardQ39A C Corporation has taxable income of 0,000 before the charitable contribution deduction and dividends received deduc...MediumQ40Corp A owns 25% of Corp B. Corp A received ,000 in dividends from Corp B. Corp A's taxable income before the DRD is ,...HardQ41A C Corporation has a Net Operating Loss (NOL) carryforward of 0,000 from Year 2 arising after the TCJA. In Year 3, t...MediumQ42A C Corporation has Accumulated E&P of (,000) (deficit) at the beginning of the year. Current E&P for the year is ,00...HardQ43A C Corporation redeems 50% of Shareholder X's stock for 0,000. Shareholder X's basis in the redeemed stock was ,000....HardQ44A C Corporation distributes an asset (FMV 0,000, Basis ,000) to its sole shareholder in a complete liquidation. The s...MediumQ45Which of the following would terminate an S Corporation election?MediumQ46An S Corp shareholder has a beginning stock basis of ,000. During the year, the following occurred (pro-rata share): ...HardQ47A C Corp elected S status effective Jan 1, Year 1. At that time, it had an asset with FMV 0,000 and Basis ,000. In Ye...HardQ48An S Corporation has an Accumulated Adjustments Account (AAA) of ,000 and Accumulated E&P (from C Corp years) of ,000...HardQ49Partner A provides services worth ,000 in exchange for a 20% capital interest in a partnership. The partnership has n...MediumQ50A general partnership is formed. Partner A contributes cash of ,000 for a 50% interest. The partnership borrows ,000 ...MediumQ51Partner X has an outside basis of ,000. In a non-liquidating distribution, X receives cash of ,000 and property with ...HardQ52Partner Y has an outside basis of ,000. In a complete liquidation of the partnership interest, Y receives cash of ,00...HardQ53Partner Z sells their 30% interest in a partnership for ,000 cash. Z's outside basis was ,000. The partnership has no...HardQ54A partner is entitled to a Guaranteed Payment of ,000. The partnership has ,000 of ordinary income before the guarant...MediumQ55A partner has a ,000 passive loss from a partnership. Their outside basis is ,000. Their at-risk amount is ,000. They...HardQ56Which of the following members of an LLC is most likely subject to self-employment tax on their share of LLC ordinary...MediumQ57Which of the following characteristics distinguishes a 'Simple Trust' from a 'Complex Trust'?MediumQ58A trust has the following activity: Interest Income ,000; Dividends ,000; Capital Gains (allocable to corpus) ,000; T...HardQ59A decedent established a revocable trust 5 years before death, funding it with million. At the date of death, the tru...MediumQ60In Year 1, a married couple (US citizens) gives ,000 cash to their son. They elect gift splitting. The annual exclusi...MediumQ61A tax-exempt university operates a coffee shop open to the public. The shop generates ,000 in profit. The university ...MediumQ62Which of the following organizations is most likely to be classified as a Private Foundation rather than a Public Cha...MediumQ63Uncle gives Niece stock with a Basis of ,000 and FMV of ,000. Niece sells the stock later for ,000. What is Niece's r...HardQ64Decedent died on Jan 1. Estate elects Alternate Valuation Date (AVD). Asset A: Date of Death (DOD) Value 0k, 6-month ...MediumQ65Taxpayer has the following capital gains/losses: LTCG (15% rate) ,000; LTCL (28% rate collectibles) (,000); STCG ,000...HardQ66In Year 5, a business sells a machine (Section 1231 asset) for a ,000 gain. In Years 1-4, the business had net Sectio...MediumQ67A business purchased ,000 of office furniture (7-year property) on Feb 1 and ,000 of machinery (5-year property) on D...MediumQ68In Year 1, Company X purchased equipment for .2 million. The Section 179 limit is .16 million and the phase-out thres...HardQ69Investor exchanges a building (FMV 0,000, Basis 0,000) for another building (FMV 0,000) and ,000 cash. What is the re...HardQ70A warehouse (Basis 0,000) was destroyed by fire. Insurance paid 0,000. The taxpayer purchased a replacement warehouse...HardQ71A single taxpayer lived in a home for 1 year, rented it out for 2 years, then moved back in and lived there for 2 yea...HardQ72Father sells stock (Basis ,000) to Daughter for ,000 (FMV). Daughter later sells the stock to an unrelated party for ...Medium