REG topic guide

Individual tax for REG CPA candidates.

Individual tax questions reward rule memory, but they also punish candidates who skip taxpayer facts such as filing status, dependency, timing, and deduction limits.

Practice REG individual tax questions CPA sections

By World of Accountants editorial team. Last reviewed August 23, 2026. World of Accountants is independent and not affiliated with the AICPA, NASBA, Becker, NINJA, UWorld, Gleim, or other CPA review providers.

REG sample question

Test the rule before you leave this REG guide.

Read the topic explanation, then use this real REG question to check whether the controlling fact is sticking.

REG-000006REG-VEntity taxation

A partner begins the year with outside basis of $70,000. During the year, the partner's share of partnership liabilities increases $20,000, the partner is allocated $25,000 of ordinary income, and the partner receives a $15,000 cash distribution. What is the partner's ending outside basis under these facts?

A.$60,000
B.$80,000
C.$100,000
D.$130,000

Answer: C. $100,000

Ending basis is $70,000 + $20,000 liability increase + $25,000 income - $15,000 cash distribution = $100,000.

Why the other answers are wrong

A. This treats the liability increase or income as a reduction rather than an increase, and does not apply the full roll-forward.
B. This omits one of the basis increases or applies the distribution before all increases are considered.
D. The choice "$130,000" does not satisfy the controlling entity taxation requirement. The correct result is "$100,000" because Ending basis is $70,000 + $20,000 liability increase + $25,000 income - $15,000 cash distribution = $100,000.

Core idea

Individual tax starts with gross income, then moves through exclusions, adjustments, deductions, credits, and tax liability. The facts usually tell you which layer matters.

What REG likes to test

Expect filing status, dependents, wages, interest, dividends, capital gains, itemized deductions, self-employment tax, credits, penalties, and timing rules.

Common miss

Candidates often compute a tax result before identifying the taxpayer, tax year, filing status, and whether the amount is an income item, deduction, or credit.

How to practice

Mark each fact as income, exclusion, adjustment, deduction, credit, or limitation before solving. That keeps the individual tax framework visible.

How to use this guide

Turn individual tax for reg cpa candidates into a short practice loop.

Read the core idea first, then answer a small set while the rule is still active in your head. The goal is to see whether you can recognize the tested fact without rereading the guide.

Spot the tested fact

Before choosing an answer, name the one fact that should control the result. REG questions often become easier once the controlling fact is separated from background detail.

Explain the distractor

When an answer is wrong, say why it is wrong in one sentence. That habit turns answer review into durable exam judgment instead of memorizing a letter.

Retest later

Bookmark misses and revisit them after another study session. A topic is stronger when you can recover it after time has passed.

REG topic guides

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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.

REGCorporation tax for REG CPA candidates

C corporations, S corporations, distributions, shareholder basis, book-tax differences, and loss limits.

REGMACRS depreciation for REG CPA candidates

Recovery periods, conventions, bonus depreciation, Section 179, and basis adjustments.

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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 individual tax questions