What TCP tests
TCP focuses on tax compliance and planning. Candidates need rule recall, but they also need to apply tax planning logic to individuals, entities, basis, property transactions, losses, and compliance decisions.
Free TCP CPA practice
Free TCP CPA practice questions for tax compliance and planning.
World of Accountants includes 575 draft TCP practice questions with explanations, bookmarks, flashcards, and progress tracking. Use this free beta bank for extra reps on tax compliance, planning, basis, loss limits, individual tax, entity tax, and property-related tax topics.
Last reviewed June 5, 2026. World of Accountants is independent and not affiliated with the AICPA, NASBA, Becker, NINJA, UWorld, Gleim, or other CPA review providers.
What is included?
The TCP beta bank currently includes 575 multiple-choice questions. Each question includes the correct answer explanation and wrong-answer reasoning.
How to use this page
Identify the taxpayer, the tax year, the transaction, and the limiting rule. That keeps review practical instead of abstract.
Current beta status
TCP is the expanded discipline beta bank. Use it for extra practice, and send feedback if a question or explanation feels unclear.
Sample questions
Try a few TCP examples before opening the full bank.
These are real questions from the current beta bank. The practice app includes more questions, filters, explanations, bookmarks, and progress tracking.
During individual tax planning, a taxpayer can either claim the standard deduction or itemize deductions. What should drive the decision?
- A.The taxpayer generally chooses the option producing the greater allowable deduction.
- B.The taxpayer must itemize if any deductible expense exists
- C.The standard deduction is always lower
- D.The choice has no effect on taxable income
Answer: A. The taxpayer generally chooses the option producing the greater allowable deduction.
The taxpayer generally chooses the option producing the greater allowable deduction.
Why the other answers are wrong
- B. The choice "The taxpayer must itemize if any deductible expense exists" misses the issue because taxpayers generally compare standard and itemized deductions.
- C. The choice "The standard deduction is always lower" misses the issue because the standard deduction may be higher for some taxpayers.
- D. The choice "The choice has no effect on taxable income" misses the issue because the deduction choice affects taxable income.
During individual tax planning, owners are choosing between partnership and corporate form for a new business. What is a major tax consideration?
- A.Entity choice never affects tax planning
- B.They should consider the timing and level of taxation to the entity and owners.
- C.Only the business logo matters for taxes
- D.All entities are taxed exactly the same way
Answer: B. They should consider the timing and level of taxation to the entity and owners.
They should consider the timing and level of taxation to the entity and owners.
Why the other answers are wrong
- A. The choice "Entity choice never affects tax planning" misses the issue because entity choice can significantly affect tax treatment.
- C. The choice "Only the business logo matters for taxes" misses the issue because branding is not the tax consideration.
- D. The choice "All entities are taxed exactly the same way" misses the issue because different entity forms have different tax consequences.
During individual tax planning, a taxpayer exchanges business real property for other qualifying real property. What treatment may be relevant?
- A.The entire exchange is always taxable in full
- B.The rule applies to all personal-use property
- C.Like-kind exchange nonrecognition may apply if the requirements are met.
- D.The taxpayer can ignore basis tracking
Answer: C. Like-kind exchange nonrecognition may apply if the requirements are met.
Like-kind exchange nonrecognition may apply if the requirements are met.
Why the other answers are wrong
- A. The choice "The entire exchange is always taxable in full" misses the issue because qualifying real property exchanges may receive nonrecognition.
- B. The choice "The rule applies to all personal-use property" misses the issue because personal-use property generally does not qualify.
- D. The choice "The taxpayer can ignore basis tracking" misses the issue because basis tracking remains necessary.
During individual tax planning, a partner receives cash exceeding outside basis. What is the general result?
- A.The excess cash is always tax-free
- B.The partner recognizes an ordinary deduction
- C.The partnership increases the partner's basis for the excess
- D.The partner recognizes gain to the extent cash exceeds outside basis.
Answer: D. The partner recognizes gain to the extent cash exceeds outside basis.
The partner recognizes gain to the extent cash exceeds outside basis.
Why the other answers are wrong
- A. The choice "The excess cash is always tax-free" misses the issue because cash above outside basis generally triggers gain.
- B. The choice "The partner recognizes an ordinary deduction" misses the issue because excess cash distributions do not create a deduction.
- C. The choice "The partnership increases the partner's basis for the excess" misses the issue because cash distributions generally reduce basis before gain recognition.
During individual tax planning, a taxpayer has passive losses but no passive income. What limitation may apply?
- A.Passive losses may be suspended unless an exception applies.
- B.Passive losses always offset salary without limitation
- C.The losses are converted to tax credits
- D.The losses increase gross income
Answer: A. Passive losses may be suspended unless an exception applies.
Passive losses may be suspended unless an exception applies.
Why the other answers are wrong
- B. The choice "Passive losses always offset salary without limitation" misses the issue because passive activity rules can limit offsets.
- C. The choice "The losses are converted to tax credits" misses the issue because passive losses are not automatically credits.
- D. The choice "The losses increase gross income" misses the issue because losses do not increase gross income.
During individual tax planning, a donor makes a present-interest gift within the annual exclusion amount. What is the likely gift tax effect?
- A.The recipient reports wage income
- B.The gift may be sheltered by the annual exclusion.
- C.Gift tax is always due immediately
- D.The donor receives a business deduction
Answer: B. The gift may be sheltered by the annual exclusion.
The gift may be sheltered by the annual exclusion. The tested issue is Gift tax planning, so the best answer must match that rule and respond directly to the facts in the stem.
Why the other answers are wrong
- A. The choice "The recipient reports wage income" misses the issue because a gift is not compensation merely because received.
- C. The choice "Gift tax is always due immediately" misses the issue because exclusions and credits can prevent current gift tax.
- D. The choice "The donor receives a business deduction" misses the issue because personal gifts are not business expenses.
During individual tax planning, a taxpayer contributes to a qualified retirement plan. What is a common tax benefit?
- A.The contribution is always fully taxable immediately
- B.Qualified plans eliminate all future tax
- C.A current deduction or income exclusion may be available, subject to limits.
- D.The contribution creates a capital loss
Answer: C. A current deduction or income exclusion may be available, subject to limits.
A current deduction or income exclusion may be available, subject to limits.
Why the other answers are wrong
- A. The choice "The contribution is always fully taxable immediately" misses the issue because qualified plans may provide deferral benefits.
- B. The choice "Qualified plans eliminate all future tax" misses the issue because retirement distributions may be taxable later.
- D. The choice "The contribution creates a capital loss" misses the issue because retirement contributions are not capital losses.
During individual tax planning, a taxpayer earns significant income not subject to withholding. What compliance issue should be considered?
- A.No payment is required until a notice arrives
- B.Withholding from other income always solves the issue
- C.Estimated payments apply only to tax-exempt entities
- D.Estimated tax payments may be needed to avoid underpayment penalties.
Answer: D. Estimated tax payments may be needed to avoid underpayment penalties.
Estimated tax payments may be needed to avoid underpayment penalties.
Why the other answers are wrong
- A. The choice "No payment is required until a notice arrives" misses the issue because tax may need to be paid during the year.
- B. The choice "Withholding from other income always solves the issue" misses the issue because withholding may or may not be enough.
- C. The choice "Estimated payments apply only to tax-exempt entities" misses the issue because individuals and businesses may need estimated payments.
High-value TCP topics
Individual tax planning, entity tax compliance, basis, distributions, loss limitations, property transactions, retirement planning, gift and estate basics, and tax procedure.
Best study rhythm
Identify the taxpayer, the tax year, the transaction, and the limiting rule. That keeps review practical instead of abstract.
TCP topic guides
Build TCP strength with focused topic guides.
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Quick answers
Common questions before you start practicing.
Are the TCP CPA practice questions free?
Yes. World of Accountants currently offers the TCP practice bank free during beta.
How many TCP questions are included?
The TCP beta bank currently includes 575 practice questions with explanations.
Do the TCP questions include explanations?
Yes. Each TCP MCQ includes a correct-answer explanation and wrong-answer reasoning so you can review why the distractors fail.
Can I save TCP progress?
Yes. You can use local progress in the browser, and signing in lets progress sync across devices where account sync is configured.
Should this replace a full CPA review course?
No. This free beta is best used for extra practice, explanations, bookmarks, flashcards, and weak-area review alongside your main CPA study plan.
Free beta