Lumenary Prep

Uniform CPA Examination, Taxation and Regulation (Core section)

CPA Exam: Taxation and Regulation (REG)

Federal taxation, ethics and business law, from the Code, the regulations and the IRS's own publications.

AI-drafted · awaiting expert reviewWritten for REG under the Uniform CPA Examination Blueprints effective January 1, 2026, and those effective January 1, 2027 (which change REG only by clarifying a digital-assets example in Area IV). Tax law: the Internal Revenue Code as amended by Public Law 119-21 of July 4, 2025 (H.R. 1, the One Big Beautiful Bill Act). The AICPA tests a federal tax change from the calendar quarter beginning six months after its effective or enactment date, whichever is later; as a planned exception, its Board of Examiners decided on September 18, 2025, that the Act's provisions with 2024 and 2025 effective dates, including those for taxable years beginning after December 31, 2025, became eligible for testing on July 1, 2026, with the Act's later provisions following the six-month rule. The course therefore treats 2026 as the current tax year. REG does not test inflation-indexed amounts from memory; where the course shows one, it is the 2026 figure from Rev. Proc. 2025-32 (or a labelled 2025 figure). Tax laws enacted after Public Law 119-21 that touch REG topics (Public Laws 119-108 and 119-111 of September 2026) are not yet eligible for testing under the six-month rule and are only flagged. Exam facts verified on aicpa-cima.com and nasba.org, and the law on uscode.house.gov, ecfr.gov and irs.gov, on 9 November 2026.

A complete, original course for the Taxation and Regulation (REG) Core section of the Uniform CPA Examination, organised by the five content areas of the AICPA's current REG blueprint and weighted like it: ethics, professional responsibilities and federal tax procedures (Circular 230, preparer and taxpayer penalties, audits, appeals and the courts, licensing and a CPA's legal duties); business law (agency, contracts, debtors and creditors, secured transactions, bankruptcy, federal employment-tax, health-care and anti-bribery rules, and business structures); basis and cost recovery; federal taxation of individuals; and federal taxation of C corporations, S corporations, partnerships, LLCs and exempt organizations, including book-to-tax reconciliation and state apportionment. Each lesson teaches the rules from the Internal Revenue Code, the Treasury regulations, Title 11 and the IRS's own publications, with worked computations, common traps and a self-check, and is followed by practice questions and simulation-style cases with full explanations. A full-length practice exam mirrors REG's five testlets, its 72 multiple-choice questions and 8 task-based simulations, and its blueprint weights. Use it alongside the AICPA's blueprints and online sample test.

About the exam

Syllabus

26 lessons, 286 practice questions and 1 timed practice exam.

Getting Started

  1. How the CPA Exam and REG work

    The Core-plus-Discipline structure of the CPA Exam, REG's five testlets and four-hour clock, scoring and score release, the blueprint's five content areas and weights, the AICPA's rule for when new tax law is tested (including Public Law 119-21), and how to use this course.

    1. How the CPA Exam and REG workFree sample25 min

Area I: Ethics, Professional Responsibilities and Federal Tax Procedures (10–20%)

  1. Ethics, professional responsibilities and federal tax procedures

    Circular 230 and practice before the IRS; who is a tax return preparer and the preparer and taxpayer penalties; audits, appeals, the courts, disclosure, substantiation and the hierarchy of tax authority; state boards of accountancy, a CPA's common-law liability, privilege and confidentiality.

    1. Circular 230 and practice before the IRS(included with the course)45 min
    2. Return preparers and tax penalties(included with the course)50 min
    3. Audits, appeals and tax procedure(included with the course)50 min
    4. Licensing, liability, privilege and confidentiality(included with the course)45 min

Area II: Business Law (15–25%)

  1. Agency and contracts

    How agency relationships form, the kinds of authority, and the duties and liabilities of principals and agents; how contracts are formed, performed and discharged, what counts as breach, and the remedies, with the UCC's rules for sales of goods explained in our own words.

    1. Agency(included with the course)40 min
    2. Contract formation(included with the course)50 min
    3. Contract performance, discharge and remedies(included with the course)50 min

  2. Debtors, creditors and bankruptcy

    The rights and duties of debtors, creditors and guarantors; secured transactions, attachment, perfection and priority under UCC Article 9 (in our own words); and bankruptcy under Title 11: the chapters, the estate, the order of distribution and discharge.

    1. Debtors, creditors, sureties and secured transactions(included with the course)45 min
    2. Bankruptcy(included with the course)50 min

  3. Federal regulation of business

    Employment taxes from the employer's and the employee's side, employee-or-contractor classification, the Affordable Care Act's employer mandate and premium tax credit, and the Foreign Corrupt Practices Act.

    1. Federal regulation of business(included with the course)50 min

  4. Business structures

    Forming, running and ending sole proprietorships, general and limited partnerships, LLPs, LLCs and corporations, and the rights, duties and authority of owners and managers.

    1. Business structures(included with the course)55 min

Area III: Federal Taxation of Property Transactions (5–15%)

  1. Basis and cost recovery

    The tax basis of purchased, converted, gifted, inherited and wash-sale property and of intangibles; MACRS depreciation, conventions, bonus depreciation, Section 179 and amortization; and reviewing a depreciation schedule.

    1. Basis of assetsFree sample50 min
    2. Depreciation and amortization(included with the course)55 min

Area IV: Federal Taxation of Individuals (22–32%)

  1. Gross income and capital gains

    What goes into an individual's gross income and what is excluded, income in the year of death, and capital gains and losses: holding periods, netting, the $3,000 limit and carryovers, gifts, inheritances, digital assets, wash sales and personal-use losses.

    1. Gross income — inclusions and exclusions(included with the course)60 min
    2. Capital gains and losses(included with the course)55 min

  2. Pass-through income, losses and deductions

    Reporting a Schedule K-1 and other pass-through items, basis limits on business losses, hobby losses and the qualified business income deduction; adjustments to income, the standard deduction and itemized deductions.

    1. Pass-through income, loss limits and the QBI deduction(included with the course)55 min
    2. Adjustments, the standard deduction and itemized deductions(included with the course)60 min

  3. Filing status, tax and credits

    Filing status and dependents; computing the tax, including preferential capital gain rates and the net investment income tax; refundable and nonrefundable credits; and the estimated-tax safe harbors.

    1. Filing status and dependents(included with the course)45 min
    2. Computing the tax, credits and estimated tax(included with the course)60 min

Area V: Federal Taxation of Entities (23–33%)

  1. C corporations and state taxation

    Book-to-tax reconciliation on Schedules M-1 and M-3; a C corporation's taxable income, losses and credits; and state and local taxation: nexus, Public Law 86-272, allocation and apportionment.

    1. Book-tax differences and Schedules M-1 and M-3(included with the course)40 min
    2. C corporations — taxable income, losses and credits(included with the course)50 min
    3. State and local taxation — nexus, allocation and apportionment(included with the course)35 min

  2. S corporations, partnerships and other entities

    S corporation eligibility, election and termination, ordinary income and separately stated items, the AAA and shareholder basis; partnership ordinary income, guaranteed payments and partner basis; LLC classification and the kinds of tax-exempt organizations.

    1. S corporations — eligibility, income, AAA and shareholder basis(included with the course)50 min
    2. Partnerships — ordinary income, guaranteed payments and partner basis(included with the course)45 min
    3. LLC classification and tax-exempt organizations(included with the course)30 min

Practice exams

  • REG Practice Exam 1 (full length)124 questions · 240 minutesIncluded with the course

Free official resources

Use these alongside the course. They are free, and they are the final word.

Lumenary Prep is not affiliated with or endorsed by the AICPA, NASBA or any state board of accountancy. Only a state board of accountancy grants the CPA license. The AICPA's blueprints and standards, and the FASB's, GASB's, PCAOB's and COSO's materials, are copyrighted: this course explains them in its own words and links to the official text. Every source this course cites.