REG topic guide

MACRS depreciation for REG CPA candidates.

MACRS questions are not only formula questions. They test whether you can identify the asset, timing, convention, expensing election, and depreciable basis.

Practice REG depreciation 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

Depreciation starts with the depreciable basis of qualifying property, then applies the correct recovery period, convention, and permitted expensing rules.

What REG likes to test

Watch for placed-in-service date, listed property, real property versus personal property, Section 179, bonus depreciation, conventions, and limitations.

Common miss

Candidates often calculate depreciation without first checking whether the asset qualifies, when it was placed in service, or whether an expensing limitation applies.

How to practice

Use a fixed order: asset type, placed-in-service date, basis, Section 179, bonus depreciation, regular MACRS, and any limitations.

How to use this guide

Turn macrs depreciation 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.

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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 depreciation questions