Taxation and Regulation (REG)

REG tests more than recall of tax rules. The section depends on recognizing which authority applies, what the transaction does to basis or character, and how legal and procedural constraints shape the answer. This guide is arranged so you can move from professional responsibilities into business law and then through the major federal tax areas.

Chapter Map

• Part I: Introduction and Exam Overview for the section structure and the broad logic of REG study.
• Part II: Ethics, Professional Responsibilities, and Federal Tax Procedures for Circular 230, responsibilities to clients and the IRS, and procedural foundations.
• Part III: Business Law for contracts, agency, debtor-creditor issues, and legal relationships that drive REG reasoning.
• Part IV: Federal Taxation of Property Transactions for basis, gain or loss recognition, nonrecognition rules, and transaction consequences.
• Part V: Federal Taxation of Individuals for gross income, deductions, credits, and individual-return logic.
• Part VI: Federal Taxation of Entities for corporations, partnerships, S corporations, and entity-level rules.
• Part VII: Advanced Topics in Tax Planning and Strategy for higher-order planning considerations.
• Part VIII: Property Dispositions and Special Transactions for additional transaction patterns that candidates commonly confuse.
• Part IX: Practical Insights and Additional Resources for later-stage review support.

How to Use This Guide

• Read Parts II through VI as the core REG spine.
• Use Parts VII and VIII after the main framework is stable so planning and special-transaction rules have context.
• Return to Part IX near review phase, not as a substitute for the main tax and law lessons.

In this section

• REG Introduction and Exam Overview
  REG orientation to section scope, exam structure, authority foundations, and study approach.
  • REG Section Scope and Exam Design
    REG overview of section scope, test design, skill allocation, and study planning.
    • REG Scope, Content Areas, and Professional Role
      REG overview of the exam subject boundaries, major content areas, and newly licensed CPA responsibilities.
    • REG Exam Format, Testlets, and Scoring Logic
      REG exam structure for testlets, time allocation, scoring, and pacing decisions.
    • REG Skill Allocation and Cognitive Demand
      REG overview of remembering, application, and analysis demands across tax and law questions.
    • REG as a Core Section in the CPA Discipline Model
      How REG fits within the CPA core-and-discipline structure and how it connects to BAR, ISC, and TCP.
    • REG Study Strategy and Exam-Day Approach
      Practical REG study planning, pacing, research use, and exam-day decision rules.
  • Tax and Legal Foundations for REG
    REG background on tax authorities, court structure, sources of law, and recurring legal terms.
    • U.S. Tax Authority Framework and Source Hierarchy
      Foundational REG treatment of tax authority layers, from the Code and regulations to IRS guidance and courts.
    • Tax Litigation Forums and Court Structure
      REG foundation on Tax Court, refund forums, appeal paths, and forum-choice consequences.
    • Business and Tax Law Sources and Authority Weight
      How statutes, regulations, IRS guidance, and case law interact in business and tax analysis.
    • Essential Legal Terms for REG Fact Patterns
      Recurring legal vocabulary and concepts that change how REG fact patterns are read and answered.
• REG Ethics, Professional Responsibilities, and Tax Procedures
  REG coverage of tax-practice ethics, licensing systems, IRS procedure, and civil liability.
  • Tax Practice Ethics and Professional Standards
    Circular 230, preparer duties, SSTS, penalty exposure, and independence standards for REG.
    • Circular 230 Duties, Restrictions, and OPR Enforcement
      Rules for practice before the IRS, including due diligence, conflicts, fees, and sanctions.
    • Tax Practitioner Duties, Restrictions, and Conflict Rules
      Signing, confidentiality, conflicts, disclosure limits, and core conduct rules for tax practitioners.
    • Tax Return Preparer Status and Penalty Exposure
      Who counts as a preparer, how signing and nonsigning roles differ, and which penalties can apply.
    • AICPA Tax Standards and Return-Position Rules
      How the SSTS guide return positions, error handling, estimates, and tax advice.
    • Integrity, Objectivity, and Independence in Tax Practice
      Professional standards for unbiased judgment, conflict control, and defensible tax advice.
  • Licensing Oversight and Disciplinary Systems
    Accountancy board authority, discipline triggers, sanctions, and corrective actions tested in REG.
    • State Board Authority Over CPA Licensing and Discipline
      How state boards license CPAs, enforce standards, and coordinate discipline.
    • Investigations, Sanctions, and Disciplinary Proceedings
      Complaint intake, investigation, hearings, and sanctions in CPA discipline matters.
    • Common CPA Violations and Likely Remedies
      Typical misconduct patterns and the remedies or sanctions they commonly trigger.
  • Federal Tax Procedure and Authority
    REG procedure coverage for audits, substantiation, deadlines, penalties, and research authority.
    • IRS Examination, Appeals, and Procedural Escalation
      How IRS exams move from audit to appeals and how taxpayers respond at each stage.
    • Substantiation, Disclosure, and Recordkeeping Duties
      Documentation, disclosure rules, and recordkeeping duties that support tax positions.
    • Assessment Periods, Refund Windows, and Filing Deadlines
      The time limits that govern assessment, refund claims, extensions, and filing obligations.
    • Civil Versus Criminal Tax Penalties
      When tax noncompliance stays civil, when it becomes criminal, and what penalties apply.
    • Tax Authority Hierarchy for Research and Support
      How to rank Code, regulations, rulings, and other authorities when supporting a tax conclusion.
  • Legal Duties, Privilege, and Civil Liability
    REG legal-responsibility coverage for duty of care, privilege, confidentiality, malpractice, and contract claims.
    • Common Law Duties Owed to Clients and Third Parties
      Negligence, privity, foreseeability, and third-party exposure in CPA work.
    • Privilege, Confidentiality, and Taxpayer Information Protection
      Attorney-client privilege, IRC Section 7525, confidentiality duties, and privacy limits.
    • Malpractice Exposure and Engagement Contract Claims
      How malpractice and breach-of-contract claims arise in tax engagements and how firms reduce exposure.
• REG Business Law Foundations and Legal Relationships
  REG business-law coverage for agency, contracts, debtor-creditor rules, federal law, and entity structure.
  • Agency Relationships, Authority, and Termination
    REG agency-law coverage for formation, authority, duties, liability, and termination.
    • Agency Formation and Relationship Types
      How agency relationships arise and which types of agency matter for REG fact patterns.
    • Actual, Apparent, and Ratified Agent Authority
      How actual authority, apparent authority, and ratification bind principals in agency law.
    • Agent and Principal Duties, Liability, and Remedies
      Fiduciary duties, liability exposure, and remedies within principal-agent relationships.
    • Agency Termination, Notice, and Third-Party Effects
      How agency ends and how notice affects third-party reliance and lingering liability.
  • Contract Law for REG
    REG contract-law coverage for formation, defenses, performance, remedies, and special contract types.
    • Offer, Acceptance, and Consideration in Contract Formation
      The elements required to form an enforceable contract and the common traps around them.
    • Fraud, Mistake, Duress, and Illegality as Contract Defenses
      The main defenses that can make an apparent agreement void, voidable, or unenforceable.
    • Contract Performance, Discharge, and Breach Remedies
      How contract duties are performed, discharged, breached, and remedied.
    • Sales, Employment, and Online Contract Rules
      How contract law changes in UCC sales, employment agreements, and online contracting.
  • Debtor-Creditor Law, Bankruptcy, and Security Interests
    REG debtor-creditor coverage for guarantor liability, bankruptcy basics, secured transactions, and priority rules.
    • Rights and Liability of Debtors, Creditors, and Guarantors
      The legal relationships, duties, and recourse rights among debtors, creditors, and guarantors.
    • Bankruptcy Basics, Automatic Stay, and BAPCPA
      Core bankruptcy concepts for REG, including chapters, priority claims, the automatic stay, and BAPCPA.
    • Secured Versus Unsecured Transactions Under the UCC
      How secured and unsecured creditor positions differ under UCC Article 9.
    • Perfection, Priority, and Enforcement of Security Interests
      How security interests are perfected, ranked, and enforced after default.
  • Federal Laws Affecting Business Operations
    REG coverage of worker classification, ACA rules, anti-bribery law, and other business requirements.
    • Worker Classification and Employment Tax Consequences
      How employee versus contractor status changes payroll tax and compliance obligations.
    • ACA Mandates, Qualified Plans, and Tax Credits
      The ACA rules in REG that affect employer coverage, qualified plans, and health-related tax credits.
    • FCPA Anti-Bribery and Recordkeeping Rules
      The anti-bribery and accounting-control rules that matter under the FCPA.
    • Other Federal Business Statutes and Compliance Rules
      Additional federal statutes and industry rules that can change legal or compliance outcomes in REG scenarios.
  • Business Structures and Internal Governance
    REG entity-law coverage for legal characteristics, formation, governance, authority, and compliance.
    • Legal Characteristics of Sole Proprietorships, Partnerships, Corporations, and LLCs
      How the major entity forms differ in liability, formation, governance, and tax posture.
    • Entity Formation, Operation, and Termination
      How business entities are formed, operated, maintained, and dissolved.
    • Owner and Management Rights, Duties, and Authority
      How owners, directors, managers, and partners allocate control and authority inside business entities.
    • Governing Documents, Internal Rules, and Compliance
      Operating agreements, shareholder documents, recordkeeping, and compliance controls across entity forms.
• REG Property Transactions, Basis, and Cost Recovery
  Basis and cost-recovery rules for property acquired, converted, improved, depreciated, or transferred.
  • Asset Basis Rules for REG
    REG property-tax coverage for original basis, adjusted basis, gifts, inheritances, conversions, and special basis rules.
    • Original Basis and Adjusted Basis Calculations
      How acquisition costs, capital improvements, depreciation, and other events establish and change tax basis.
    • Gift and Inheritance Basis Rules
      Carryover, double-basis, and date-of-death basis rules for property transferred by gift or inheritance.
    • Personal-to-Business Conversion Basis
      The lower-of-cost-or-FMV rule for depreciation when personal property is converted to business use.
    • Wash Sales and Related-Party Basis Adjustments
      Loss deferral and basis-adjustment rules for wash sales and related-party property transactions.
  • Cost Recovery, Depreciation, and Amortization
    REG cost-recovery coverage for MACRS, Section 179, bonus depreciation, amortization, and compliance issues.
    • MACRS Recovery Periods and Depreciation Conventions
      How MACRS class lives, recovery periods, and timing conventions determine depreciation deductions.
    • Section 179 and Bonus Depreciation Rules
      Eligibility, ordering, annual limits, phaseouts, and listed-property constraints for accelerated cost recovery.
    • Tax Amortization of Intangible Costs
      Amortization rules for Section 197 intangibles, start-up expenditures, and organizational costs.
    • Cost Recovery Planning and Compliance
      How to coordinate cost-recovery elections, substantiation, recapture awareness, and compliance controls.
• REG Individual Taxation and Return Computation
  Individual-tax rules for income, deductions, credits, loss limits, and owner-level pass-through reporting.
  • Individual Gross Income and Exclusions
    REG individual-tax coverage for gross income, exclusions, capital gains, and kiddie-tax issues.
    • Wages, Dividends, Pensions, and Gross Income Inclusions
      How common compensation, investment, and retirement items enter individual gross income.
    • Taxable and Tax-Exempt Interest and Dividends
      Tax treatment for interest, municipal bond income, ordinary dividends, and qualified dividends.
    • Short-Term and Long-Term Capital Gains and Losses
      Holding-period classification, netting, annual loss limits, and carryforward mechanics for individuals.
    • Gross Income Exclusions for Gifts, Insurance, Scholarships, and Fringe Benefits
      Major statutory exclusions from individual gross income and the facts that can make them taxable.
    • Kiddie Tax on Minor Children's Unearned Income
      When a child's unearned income is taxed using the parent-rate framework.
  • Individual Deductions, Credits, and Filing Rules
    REG individual-tax coverage for AGI adjustments, itemized deductions, credits, QBI, and filing-status issues.
    • AGI Adjustments for Self-Employment, IRAs, and HSAs
      Above-the-line deductions that reduce adjusted gross income before itemized deductions or credits.
    • Itemized Deduction Categories and Limits
      Medical, tax, interest, charitable, and casualty deductions with their key thresholds and limitations.
    • Refundable and Nonrefundable Tax Credits
      How individual tax credits reduce liability and when a credit can generate a refund.
    • Qualified Business Income Deduction Rules
      Section 199A QBI deduction eligibility, SSTB limits, wage limits, UBIA factors, and taxable-income thresholds.
    • Filing Status and Estimated Tax Payment Rules
      How filing status affects individual tax computation and when estimated-payment safe harbors apply.
  • Individual Loss Limitation Rules
    REG coverage of at-risk rules, passive-loss limits, suspended losses, hobby losses, and related disallowances.
    • At-Risk and Material Participation Rules
      How at-risk amounts and participation facts limit individual loss deductions.
    • Passive Losses and Rental Real Estate Activities
      Passive activity loss limits, rental real estate exceptions, real estate professional rules, and suspended losses.
    • Suspended Losses Released on Disposition
      When complete taxable disposition releases passive or at-risk suspended losses.
    • Hobby Losses and Other Nondeductible Items
      Profit-motive factors, hobby loss limits, and other individual deductions that may be disallowed.
  • Pass-Through Income Reporting for Individuals
    REG pass-through reporting coverage for K-1 items, separate statements, basis, and loss utilization.
    • Partnership and S Corporation Flow-Through Items
      How partnership and S corporation items pass to individual owners and preserve tax character.
    • Separately Stated Items and Ordinary Income
      How pass-through entities separate items that must keep their tax character on owner returns.
    • Owner Basis Calculations and Loss Utilization
      How partner and shareholder basis limits individual deductions from pass-through entities.
    • Schedule K-1 Reporting and Compliance
      How individual owners read, classify, and report Schedule K-1 items from pass-through entities.
• PART VI: Federal Taxation of Entities (Area V)
  REG entity-tax coverage for book-tax differences, corporations, S corporations, partnerships, trusts, and exempt entities.
  • Chapter 18: Differences Between Book and Tax Income
    REG coverage of book-tax differences, M-1 and M-3 adjustments, and common corporate reconciliation errors.
    • Permanent vs. Temporary Differences (M-1, M-3 Schedules)
      A comprehensive guide to reconciling GAAP net income to taxable income, exploring permanent and temporary differences, and understanding the M-1 and M-3 schedules.
    • Adjustments for Charitable Contributions, Depreciation, NOLs
      Explore key book-to-tax differences for charitable contributions, depreciation methods, and net operating losses (NOLs). Learn how corporations reconcile these items on M-1 or M-3 schedules, understand multi-year carryovers, and master best practices to ensure compliance.
    • Reporting Requirements and Common Errors
      Learn the critical reporting requirements for reconciling book and tax income for entities, including frequently overlooked items like meals, fines, or life insurance proceeds, and discover best practices to avoid costly mistakes.
  • Chapter 19: C Corporations
    REG C corporation coverage for taxable income, credits, shareholder transactions, losses, consolidation, and international concepts.
    • Computation of Taxable Income and Tax Liability
      A comprehensive exploration of how C corporations compute taxable income and tax liability under the Internal Revenue Code, including gross income, deductions, and Earnings & Profits (E&P) considerations.
    • Allowable Credits and Deductions
      Explore key corporate tax deductions and credits, including R&D and the foreign tax credit, and learn about typical credit ordering rules for C corporations.
    • Capital Structure and Transactions Between Corporation and Shareholders
      Explore how dividends, redemptions, stock basis adjustments, and debt vs. equity rules affect taxation for C corporations and their shareholders.
    • State and Local Tax Considerations, Nexus, Apportionment
      Explore how C corporations establish nexus, apply state apportionment formulas, navigate throwback rules, and comply with PL 86-272.
    • Net Operating and Capital Losses (Carryback/Carryforward)
      Learn the rules for carrying back and carrying forward net operating and capital losses for C corporations, including distinctions between pre-2018 and post-2017 losses, special elections, and practical examples.
    • Consolidated Returns: Eligibility, Elections, and Intercompany Transactions
      A comprehensive overview of consolidated filing procedures, group membership rules, and intercompany eliminations under U.S. federal tax law. Learn how affiliated groups elect, maintain, and optimize consolidated returns while navigating complex intercompany transactions.
    • International Tax Concepts (Foreign Branch vs. Subsidiary, GILTI, FDII, BEAT)
      Learn the key distinctions and strategies for operating internationally through a foreign branch or subsidiary, and delve into core U.S. international tax provisions like GILTI, FDII, and BEAT.
  • Chapter 20: S Corporations
    REG S corporation coverage for eligibility, elections, basis, built-in gains, passive income, and distributions.
    • Ordinary Business Income (Loss) and Separately Stated Items
      Explore how S corporations handle ordinary income, separately stated items, Section 179 deductions, charitable contributions, and distributions, including real-life examples and best-practice strategies.
    • S Corporation Eligibility, Election Requirements, Revocation, and Termination
      Comprehensive coverage of S corporation eligibility and election procedures, avoidance of inadvertent terminations, and pathways to regain S corp status.
    • Shareholder Basis: Stock and Debt Adjustments
      Explore step-by-step basis adjustments for income, losses, distributions, and loan repayments in S corporations. Understand ordering rules, real-life examples, and best practices.
    • Built-In Gains Tax, Passive Investment Income, and AAA vs. E&P
      A comprehensive guide on the built-in gains tax, passive investment income rules, and navigating AAA vs. E&P balances in S corporations—all with practical insights and real-world examples.
    • Distributions (Liquidating vs. Nonliquidating)
      Explore how shareholders of S corporations manage stock basis in nonliquidating vs. final liquidating distributions, including practical examples, diagrams, and key strategies.
  • Chapter 21: Partnerships
    REG partnership coverage for flow-through items, elections, basis, liabilities, partner transactions, and ownership changes.
    • Ordinary Business Income (Loss) and Separately Stated Items
      Explore the fundamentals of partnership taxation focusing on ordinary business income (loss) versus separately stated items, including practical examples of guaranteed payments, capital gains, and interest allocations.
    • Partnership and Partner Elections (Tax Year, Basis Adjustments)
      A comprehensive guide to partnership- vs. partner-level tax elections, including the selection of a tax year and Section 754 basis adjustments in U.S. partnerships.
    • Partner’s Basis Computations, Recourse & Nonrecourse Debt
      Explore comprehensive insights on partner’s outside basis computations in partnerships, focusing on how recourse and nonrecourse debt allocations affect a partner’s tax basis, referencing key Treasury Regulations.
    • Transactions Between a Partner and Partnership (Services, Sales, Property)
      Explore critical rules, practical scenarios, and tax consequences surrounding partner-partnership transactions, including disguised sales, compensatory partnership interests, and self-employment tax.
    • Ownership Changes and Allocation of Liabilities
      Explore partnership ownership changes, including new partner admissions, partial-year allocations, and Section 704(c) considerations. Learn how to properly allocate liabilities and maintain compliance with federal tax regulations.
  • Chapter 22: Tax-Exempt Entities and Trusts
    REG coverage of exempt organizations, UBTI, trust types, DNI, and fiduciary tax allocation rules.
    • Qualifying as a Tax-Exempt Organization (501(c)(3))
      Explore how to form and maintain a 501(c)(3) tax-exempt organization, including the required organizing documents, filing obligations, and the operational tests imposed by the IRS.
    • Loss of Tax-Exempt Status and Ongoing Compliance
      Explore how tax-exempt organizations risk losing their status through noncompliant activities, such as excessive political involvement, lobbying, or private inurement, and discover strategies for maintaining ongoing compliance and safeguarding their exempt classification.
    • Unrelated Business Taxable Income (UBTI): Key Determinations, Exceptions, and Netting Rules
      A comprehensive guide to UBTI, covering its core definition, major exceptions, netting rules, and best practices for tax-exempt entities.
    • Types of Trusts (Simple, Complex, Grantor) and Their Taxation
      Discover the fundamentals of simple, complex, and grantor trusts, covering distributions, DNI, and key differences from estates.
    • Allocation of Income and Corpus; Distributable Net Income (DNI)
      Discover how fiduciary accounting income interacts with trust tax rules and beneficiary distributions, including classification of trust income vs. corpus and the pivotal concept of Distributable Net Income (DNI).
• PART VII: Advanced Topics in Tax Planning and Strategy
  REG planning coverage for entity formation, owner planning, estate and gift issues, and personal financial strategy.
  • Chapter 23: Entity Formation and Liquidation Planning
    REG entity-planning coverage for formation, stock-for-property exchanges, liquidations, mergers, and comparative tax effects.
    • Contributions of Property, Stock-for-Property Exchanges
      In-depth analysis of Section 351 transactions, corporate control requirements, and boot considerations for tax-deferred property contributions to corporations.
    • Corporate Liquidations vs. Sales of Shares
      Explore the tax implications, gain or loss recognition, and strategic planning considerations for corporate liquidations versus the sale of shares, highlighting the perspectives of both corporations and shareholders.
    • Partnership Liquidations and Mergers
      Explore comprehensive strategies and tax implications for complete and partial partnership liquidations, including built-in gain calculations and merger considerations.
    • Comparison of Tax Implications Across Different Entities
      Explore how tax outcomes differ for C corporations, S corporations, and partnerships in identical transactions, including formation, operations, distributions, and liquidation.
  • Chapter 24: Planning for S Corporations and Partnerships
    REG planning coverage for S corporation and partnership timing, basis, asset-disposition, and financing strategies.
    • Built-In Gains and Planning for Asset Dispositions
      Discover key strategies to reduce or defer built-in gains tax for S corporations transitioning from C status, including recognition period rules, valuation considerations, and advanced tax planning techniques.
    • Timing of Income and Elections to Optimize Tax Benefits
      Explore strategic timing of income, short tax year elections, and accounting method opportunities for S Corporations and Partnerships, enhanced by forecasting scenarios to optimize tax benefits.
    • Shifting Income and Maximizing Basis Recovery
      Discover effective strategies to allocate partnership or S corporation income through guaranteed payments, special allocations, and thoughtful ownership changes, while ensuring optimal basis recovery for tax benefits.
    • Partner and Shareholder Loans; Strategic Structuring
      Discover how partner and shareholder loans can enhance basis planning, overcome at-risk limitations, and optimize tax positions in S corporations and partnerships.
  • Chapter 25: Estate and Gift Tax Planning for Owners and Individuals
    REG transfer-tax planning coverage for estate tax, gift tax, unified credit, GST issues, and charitable strategies.
    • Estate vs. Gift Tax Systems and the Unified Credit
      Explore the dynamic relationship between estate and gift tax systems, annual exclusions, and portability of the unified credit, with practical examples and best practices.
    • Lifetime Gifting Strategies; Valuation Discounts
      Explore family limited partnerships, valuation discounts, and philanthropic giving in lifetime gift tax planning, leveraging strategies to reduce tax burdens and transfer wealth efficiently.
    • Marital Deductions, QTIP Trusts, and GST Considerations
      Explore how spousal bequests and generation-skipping transfers can strategically minimize estate taxes, with practical insights on QTIP trusts and GST considerations.
    • Charitable Giving and Philanthropic Strategies
      Discover strategies for tax-efficient charitable giving including the use of charitable remainder trusts (CRTs) and donor-advised funds to maximize both philanthropic impact and personal financial benefits.
  • Chapter 26: Individual Tax Planning Opportunities
    REG individual-planning coverage for timing strategies, AMT management, tax-advantaged accounts, and capital-gain planning.
    • Timing Strategies: Deferral vs. Acceleration of Income
      Learn how to strategically defer or accelerate income by analyzing changing tax rates and evolving standard deductions, optimizing your annual tax liabilities and maximizing financial flexibility.
    • Mitigating AMT Effects Through Tax Preference Management
      Explore strategies to reduce Alternative Minimum Tax liabilities by identifying major preference items and recalibrating deductible expenses, deferrals, and timing of transactions.
    • Use of Tax-Advantaged Accounts (HSAs, FSAs, Retirement)
      Comprehensive guide to leveraging tax-advantaged accounts—including HSAs, FSAs, and retirement plans—to reduce taxable income, maximize savings, and strategize for long-term financial growth.
    • Harvesting Capital Gains or Losses
      Discover strategies for effectively harvesting capital gains or losses, including the netting approach, short-term vs. long-term considerations, and year-end triggers to optimize tax outcomes.
  • Chapter 27: Personal Financial Planning Strategies
    REG personal-financial-planning coverage for retirement, education funding, insurance, and investment allocation.
    • Qualified Retirement Plans (401(k), IRA, Roth IRA), Distributions
      Explore comprehensive guidance on Qualified Retirement Plans, including 401(k), Traditional and Roth IRAs, and their distribution rules. Learn about withdrawal sequencing, penalties, and required minimum distributions under evolving tax legislation.
    • Education Funding (529 Plans, Tax Credits, Savings Bonds)
      Discover comprehensive strategies for financing education costs, from 529 Plans and their gift tax interplay to maximizing the American Opportunity Tax Credit, Lifetime Learning Credit, and leveraging Savings Bonds.
    • Risk Management Through Insurance (Life, Disability, LTC)
      Explore comprehensive strategies for financial security through life, disability, and long-term care insurance, covering contract provisions, tax implications, and risk mitigation best practices.
    • Investment Selection and Asset Allocation
      Explore the fundamentals of portfolio construction, asset diversification, and the impact of taxes on investment returns within personal financial planning strategies.
• PART VIII: Property Dispositions and Special Transactions
  REG transaction coverage for nonrecognition, gain or loss character, and related-party transaction rules.
  • Chapter 28: Nontaxable Exchanges and Involuntary Conversions
    REG property-transaction coverage for Section 1031 exchanges, Section 1033 conversions, deferred gain, and replacement basis.
    • Like-Kind Exchanges (Section 1031): Requirements and Limitations
      Learn how Section 1031 exchanges enable tax deferral through like-kind property replacement, including timelines, qualified intermediaries, partial exchanges with boot, and key compliance strategies.
    • Involuntary Conversions (Section 1033): Calculating Deferred Gains
      Explore Section 1033 involuntary conversions—covering condemnation, casualty, and theft scenarios—and learn how to calculate and defer gains by properly applying replacement rules.
    • Basis of Replacement Property
      Learn how newly acquired property’s basis is adjusted for deferred or partially recognized gains under Sections 1031 and 1033, complete with practical examples, diagrams, and key CPA Exam insights.
    • Planning Implications of Deferred Gains
      Learn how deferral can shift tax burdens and plan for future dispositions in Section 1031 exchanges, involuntary conversions, and more.
  • Chapter 29: Characterization of Gains and Losses
    REG property-tax coverage for Section 1231, recapture, installment sales, and gain-or-loss character analysis.
    • Section 1231 Netting Process: Capital vs. Ordinary
      Learn how Section 1231 property gains and losses are netted, apply lookback rules, and understand when capital gains are recharacterized as ordinary—complete with step-by-step diagrams and examples.
    • Depreciation Recapture (Sections 1245, 1250)
      Deep dive into the intricacies of depreciation recapture under Sections 1245 and 1250, including key computations, real-world examples, and lookback considerations for equipment and real property.
    • Unrecaptured Section 1250 Gain and Other Special Rules
      Discover how individuals incur a special 25% rate on real estate depreciation recapture, clarifying key considerations, calculations, and IRS rules for Section 1250 gains.
    • Installment Sales and Related-Party Sales
      Explore the comprehensive mechanics of installment sales, including the gross profit ratio method, imputed interest rules, and limitations affecting related-party transactions. Learn how these provisions govern the recognition of gains, ensure fair tax treatment, and prevent abuse, all supplemented with practical examples and diagrams.
  • Chapter 30: Related Party Transactions
    REG related-party coverage for attribution, loss disallowance, deferred gain, imputed interest, and family structures.
    • Attribution of Stock Ownership; Definition of Related Parties
      Explore the comprehensive rules for attributing stock ownership and defining related parties, including family and entity constructive ownership per the Internal Revenue Code.
    • Disallowance of Losses and Deferred Gains
      Explore how special IRS rules disallow losses and may defer gains in related-party transactions, preventing taxpayers from recognizing or deducting artificial losses and manipulating tax outcomes.
    • Imputed Interest and Below-Market Loans
      Explore comprehensive rules for imputed interest under IRC Section 7872, focusing on gift loans, corporate-shareholder loans, and how to calculate and report below-market interest.
    • Family Partnerships and Complex Structures
      Explore how family partnerships and complex structures present unique opportunities and challenges in tax planning, including property shifting, disguised gifts, and special allocations.
• PART IX: Practical Insights and Additional Resources
  REG late-stage review support for complex problem walkthroughs and additional reference material.
  • Chapter 31: Complex Problem Dissections
    REG integrated review chapter for multi-topic ethics, tax compliance, entity, planning, and property-transaction cases.
    • Ethics, Professional Responsibilities, and Tax Procedures
      Delve into real-life ethical dilemmas, professional responsibilities, and key tax procedures that CPAs must navigate, including deep dives into Circular 230 and IRS controversies.
    • Advanced Individual Tax Compliance and Planning
      Comprehensive strategies for multi-year planning, capital loss carryovers, and AMT considerations, empowering CPA candidates with advanced individual tax compliance insights.
    • Entity Tax Compliance (C Corps, S Corps, Partnerships)
      Discover comprehensive insights into complex multi-entity tax compliance for C Corporations, S Corporations, and Partnerships, including consolidated returns, flow-through basis calculations, and special elections.
    • Entity Tax Planning (Formation, Liquidation, Restructuring)
      Explore key strategies and tax implications for entity formation, liquidation, and corporate restructuring, including hypothetical examples, buy-sell arrangements, and key code sections.
    • Property Transactions, Nontaxable Exchanges, Depreciation Recapture
      Explore in-depth tax treatments for real estate, vehicle trade-ins, casualty losses, and depreciation recapture. Understand nontaxable exchanges (Sections 1031 & 1033), gain and loss computations, and recapture concerns for different property types.
  • Chapter 32: Additional Sources for Reference and Practice
    REG appendix chapter covering tax authorities, research tools, technology use, and legislative-change awareness.
    • Key Publications (IRC, Treasury Regulations, Rulings)
      Explore the key authoritative tax materials—Internal Revenue Code, Treasury Regulations, and IRS rulings—and learn how to use them effectively for compliant and strategic tax practice.
    • Technical Research Tools and Techniques
      Discover advanced tax research strategies, gain proficiency in using citators, and navigate online subscription platforms effectively to excel in complex CPA Examination queries.
    • Technology Applications for Tax Research and Practice
      Explore the essential software tools and modern solutions for e-filing, data analysis, and workflow management in professional tax practice.
    • Future Trends and Legislative Changes in Taxation and Regulation
      Explore upcoming changes in federal taxation, regulatory reforms, and emerging industry trends that shape the CPA profession. Stay ahead of the curve with guidance on analyzing legislative proposals, adopting new technologies, and maintaining compliance in a dynamic environment.