REG topic guide

Basis explained for REG CPA candidates.

Basis is the tax exam's running scorecard. It affects gain, loss, depreciation, distributions, deductions, and how much tax consequence remains after a transaction.

Practice REG questions CPA sections

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.

Core idea

Basis usually starts with cost or contributed value, then changes as tax events occur. The exam asks you to track those changes instead of treating basis as a fixed number.

What REG likes to test

Expect property sales, gifts, inherited property, partnership interests, shareholder stock basis, distributions, and loss limitations.

Common miss

Many candidates compute gain or loss before identifying adjusted basis, amount realized, and whether a nonrecognition rule applies.

How to practice

For every basis question, write beginning basis, increases, decreases, and ending basis before choosing an answer.

REG topic guides

Keep going with related REG topics.

REGTax basis for REG CPA candidates

Adjusted basis, property basis, entity basis, distributions, and loss-limit logic.

REGLike-kind exchanges for REG CPA candidates

Real-property nonrecognition, boot, deferred exchange facts, and carryover basis.

Practice loop

Use the topic, then answer questions while the idea is fresh.

Short practice sets are enough to expose whether the rule is sticking.

Practice REG questions