Taxation and Regulation (REG)

In this section

• PART I: Introduction and Exam Overview
  • Chapter 1: About the REG Section of the Uniform CPA Examination
    • Purpose and Scope of the REG Section
      Discover the objectives, primary content areas, and essential tasks assessed in the Regulation (REG) Section of the CPA Exam, including ethics, tax law, and business legal frameworks.
    • Exam Structure, Format, and Scoring
      Detailed insights on the 2025 CPA REG exam structure, question types, time allocation, testlets, and scoring strategies for successful exam performance.
    • Skills and Content Allocation (Remembering, Understanding, Application, Analysis)
      A comprehensive exploration of how each skill level—Remembering, Understanding, Application, and Analysis—applies to the REG exam tasks, featuring practical examples, diagrams, and strategies for success.
    • Core vs. Discipline Concepts Within the CPA Exam
      Explore how REG fits within the three Core sections of the new CPA Exam framework and how it differs from the advanced Discipline exams (BAR, ISC, TCP). Understand the fundamentals of the Core-Plus-Discipline approach, exam structures, and how these sections interrelate to shape a CPA candidate’s licensure path.
    • Study Strategies and Exam-Taking Techniques
      Discover powerful, time-tested methods for acing the CPA REG exam section, from strategic pacing to effective guessing and leveraging your tax and business law foundations.
  • Chapter 2: Foundational Tax and Legal Concepts Beyond the Blueprint
    • Overview of the U.S. Tax System and Authorities
      Explore the constitutional foundations of U.S. taxation, the Internal Revenue Code, and the hierarchy of legislative, administrative, and judicial authorities governing federal tax law.
    • Structure of the U.S. Court System for Tax Litigation
      Learn how tax disputes progress through the U.S. Courts, from the Tax Court and District Courts to the Court of Federal Claims, Circuit Courts of Appeals, and beyond.
    • Sources of Law in Business and Tax (Statute, Regulation, Case Law)
      Gain a solid understanding of how statutory authority, Treasury regulations, and judicial precedents shape the legal and tax landscape for businesses and individuals. Explore key examples, hierarchies, and practical implications to build a holistic view essential for CPA exam readiness.
    • Essential Legal Terminology and Concepts
      A comprehensive overview of fundamental legal vocabulary and principles for CPA REG candidates, covering contract law, agency, liability, statutory interpretation, and more.
• PART II: Ethics, Professional Responsibilities, and Federal Tax Procedures (Area I)
  • Chapter 3: Ethics and Responsibilities in Tax Practice
    • Treasury Department Circular 230
      Explore key ethical obligations, due diligence requirements, and sanctions under Treasury Department Circular 230, the cornerstone regulation governing tax practitioners’ conduct before the IRS.
    • Duties and Restrictions for Tax Practitioners
      Explore core ethical obligations, mandatory return-signing protocols, confidentiality requirements, and avoidance of conflicts of interest for tax practitioners. Learn about Circular 230, real-world scenarios, and best practices to uphold professional integrity.
    • Identification of a “Tax Return Preparer” and Related Penalties
      Comprehensive exploration of the legal definition of tax return preparers, their responsibilities, potential penalties, and notable exceptions.
    • AICPA Statements on Standards for Tax Services (SSTS)
      Discover the scope, rationale, and practical application of the AICPA Statements on Standards for Tax Services (SSTS) and learn how they guide tax practitioners' ethical and compliance responsibilities.
    • Maintaining Integrity, Objectivity, and Independence
      Learn essential principles of ethical conduct, unwavering integrity, unbiased objectivity, and the importance of independence when preparing tax returns and communicating with tax authorities.
  • Chapter 4: Licensing and Disciplinary Systems
    • State Boards of Accountancy: Authority and Responsibilities
      Discover the vital role of state boards in overseeing CPA licensing, enforcement, and disciplinary measures to safeguard public interest and uphold professional standards.
    • Investigations, Sanctions, and Grounds for Disciplinary Action
      Learn how State Boards of Accountancy investigate alleged CPA misconduct, the disciplinary processes that follow, and the range of potential sanctions for violations of professional standards.
    • Common Violations and Typical Remedies
      Explore the most frequent violations committed by CPAs and other tax professionals and learn about the disciplinary actions and remedies enforced by State Boards of Accountancy and other regulatory bodies. Understand how to avoid these pitfalls and maintain professional integrity.
  • Chapter 5: Federal Tax Procedures
    • IRS Audit and Appeals Process
      Learn how the IRS initiates audits, how to handle information requests, and how to navigate the Appeals process to resolve tax disputes effectively.
    • Substantiation and Disclosure Requirements
      Discover essential substantiation and disclosure obligations for federal tax procedures, including recordkeeping best practices, documentation standards, specialized forms, and strategies to avoid underreporting penalties.
    • Statute of Limitations and Filing Deadlines
      Learn the intricacies of the tax statute of limitations, key filing deadlines, and exceptions for fraud or nonfiling to ensure accurate and timely compliance.
    • Civil and Criminal Penalties Imposed on Taxpayers
      Discover key distinctions among negligence, fraud, and accuracy-related penalties—plus insights on potential criminal charges—for a comprehensive understanding of civil and criminal tax penalties.
    • Authoritative Hierarchy: Code, Regulations, Rulings
      Explore the ranking of federal tax authorities and how to research them effectively, from the Internal Revenue Code to Treasury regulations and IRS rulings.
  • Chapter 6: Legal Duties and Responsibilities
    • Common Law Duties to Clients and Third Parties
      Explore negligence, gross negligence, foreseeability, and privity issues in tax engagements, highlighting CPA responsibilities under common law.
    • Privileged Communications, Confidentiality, and Privacy Acts
      In-depth exploration of attorney-client privilege vs. CPA-client confidentiality, legal frameworks, and Privacy Acts affecting tax practice and client data protection.
    • Malpractice and Breach of Contract in Tax Engagements
      Explore the essentials of CPA malpractice and breach of contract within tax engagements, including common exposures, damage claims, and crucial risk mitigation strategies.
• PART III: Business Law (Area II)
  • Chapter 7: Agency
    • Formation and Types of Agency Relationships
      Delve into how principal-agent relationships are formed, including express, implied, and apparent authority, with practical case studies and diagrams that illustrate key elements of agency law.
    • Authority of Agents and Principals (Actual, Apparent, Ratification)
      Explore the fundamentals of actual, apparent, and ratified authority in agency relationships, ensuring CPA candidates understand how principals can become legally bound by agent actions.
    • Duties and Liabilities of Agents and Principals
      Comprehensive exploration of fiduciary duties, liabilities, and remedies in principal-agent relationships, enabling CPA candidates to understand and apply key agency law concepts.
    • Termination of Agency and Impact on Third Parties
      Explore how agency relationships end through revocation, renunciation, and events by law, plus the crucial notice requirements for protecting third-party rights and reducing liability risks.
  • Chapter 8: Contracts
    • Elements of Contract Formation (Offer, Acceptance, Consideration)
      Explore how valid contracts are formed through essential elements: offer, acceptance, and consideration. Learn the nuances of the mirror image rule, mailbox rule, and common pitfalls to ensure you’re well-prepared for exam and real-world scenarios.
    • Defenses to Formation (Fraud, Mistake, Duress, Illegality)
      A comprehensive exploration of core contract defenses under business law, featuring real-world examples, insights into fraud, mistake, duress, and illegality, and best practices for CPA exam success.
    • Performance, Discharge, and Remedies for Breach
      Explore contract performance requirements, substantial performance doctrines, discharge principles (impossibility and frustration), and legal vs. equitable remedies in breach of contract situations—all crucial for the CPA REG Exam.
    • Special Types of Contracts (Sales, Employment, Online Contracts)
      Explore the unique legal frameworks and practical considerations governing sales contracts under the UCC, employment agreements, and electronic contracts in the digital age.
  • Chapter 9: Debtor-Creditor Relationships
    • Rights, Duties, and Liabilities of Debtors, Creditors, and Guarantors
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    • Bankruptcy Basics and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
      Discover the essentials of Bankruptcy under Chapters 7, 11, and 13, explore the concept of priority claims, learn about the automatic stay, and understand the impact of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 on dischargeable debts.
    • Secured and Unsecured Transactions under the Uniform Commercial Code (UCC)
      Explore the principles of secured and unsecured transactions under the UCC, including attachment, perfection, lien priority, and best practices for lenders and borrowers.
    • Priorities, Perfection, and Enforcement of Security Interests
      Discover the essentials of secured transactions under UCC Article 9, focusing on priority rules, perfection methods, and creditor enforcement, complete with illustrative timelines and real-world examples.
  • Chapter 10: Federal Laws and Regulations Affecting Business
    • Employment Taxes and Worker Classification (Employee vs. Independent Contractor)
      Explore the key criteria for worker classification, discover how to navigate employment taxes, and learn best practices for payroll tax compliance in CPA exam contexts.
    • Qualified Health Plans, Mandates, and Credits under the Affordable Care Act
      Explore employer mandates, qualified health plans, and the small-business health care tax credits introduced by the ACA, and understand how they affect large and small businesses’ tax and compliance obligations.
    • The Foreign Corrupt Practices Act and Anti-Bribery Regulations
      Explore FCPA anti-bribery provisions, accounting requirements, and compliance best practices to help businesses maintain integrity in foreign transactions.
    • Other Federal Statutes and Industry-Specific Rules
      This article provides a comprehensive overview of key federal statutes and specialized industry regulations relevant to business operations and CPA candidates preparing for Area II of the REG Exam. Gain insights into statutory frameworks and compliance issues across banking, healthcare, environmental, telecommunications, and more.
  • Chapter 11: Business Structures
    • Legal Characteristics of Sole Proprietorships, Partnerships, Corporations, LLCs
      Explore the foundational legal characteristics, liability protection, formation requirements, and tax implications of sole proprietorships, partnerships, corporations, and LLCs.
    • Formation, Operation, and Termination of Various Entities
      A detailed guide on how to form, manage, and dissolve different types of business entities, including step-by-step outlines for articles of incorporation, partnership agreements, and compliance requirements.
    • Rights, Duties, and Authority of Owners and Management
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    • Governing Documents, Internal Regulations, and Compliance
      Explore the essentials of operating agreements, shareholder agreements, and recordkeeping obligations across various business structures. Learn best practices, internal controls, and key compliance requirements to ensure efficient and lawful enterprise operations.
• PART IV: Federal Taxation of Property Transactions (Area III)
  • Chapter 12: Basis of Assets
    • Calculation of Original Basis and Adjustments
      Discover how to determine an asset’s original cost basis, including acquisition costs and capital improvements, and learn how to accurately adjust for depreciation and other reductions.
    • Basis of Assets Received by Gift or Inheritance
      Learn the key rules for determining the basis of property acquired via gift or inheritance, including the carryover basis rules, stepped-up basis at death, gift tax implications, and relevant holding periods.
    • Impact of Conversion from Personal to Business Use
      Learn how to determine the basis of property when converting from personal to business use, including the key lower-of-cost-or-FMV rule for depreciation and cost recovery.
    • Special Basis Issues (Wash Sales, Related-Party Transactions)
      Explore in-depth rules and practical applications of basis adjustments in wash sale transactions and related-party dealings. Learn how disallowed losses, partial carryovers, and deferred losses affect tax outcomes, illustrated through examples and case studies.
  • Chapter 13: Cost Recovery (Depreciation and Amortization)
    • MACRS, Recovery Periods, and Conventions
      A comprehensive exploration of the Modified Accelerated Cost Recovery System (MACRS), including recovery periods, half-year, mid-quarter, and mid-month conventions, with practical examples and best practices.
    • Section 179 Expensing and Bonus Depreciation
      Maximize your tax benefits with Section 179 expensing and Bonus Depreciation rules. Explore eligibility requirements, annual limits, phase-out thresholds, listed property constraints, and strategic applications.
    • Amortization of Intangibles (Start-Up, Organization, Other)
      Learn how to identify and properly amortize various intangible costs, including start-up and organizational expenditures, under the relevant IRC provisions, typical amortization periods, and special elections.
    • Strategic Implications and Compliance Considerations
      Explore how to optimize cost recovery deductions, coordinate Section 179 with bonus depreciation, and avoid pitfalls to maintain compliance under U.S. tax laws.
• PART V: Federal Taxation of Individuals (Area IV)
  • Chapter 14: Gross Income (Inclusions and Exclusions)
    • Items Included in Gross Income (Wages, Dividends, Pensions)
      Deep dive on how wages, dividends, and pension income must be included in gross income for individual taxation, including ordinary vs. qualified dividends and practical wage reporting insights.
    • Interest Income and Dividends (Taxable vs. Non-Taxable)
      Discover the tax implications of interest income and dividend payments, including municipal vs. corporate bonds, qualified dividends, and partial exclusions, with practical examples and best practices.
    • Capital Gains and Losses (Short-Term vs. Long-Term) - Key Rules for Netting and Carryover
      A comprehensive guide to short-term vs. long-term capital gains, their distinct holding periods, netting processes, and strategic carryover rules for individuals under U.S. tax law.
    • Exclusions (Gifts, Inheritances, Life Insurance Proceeds, Scholarships)
      Comprehensive coverage of statutory exclusions from gross income including gifts, inheritances, life insurance proceeds, scholarships, and fringe benefits for the REG CPA exam.
    • Kiddie Tax (Unearned Income of Minor Children)
      Explore the Kiddie Tax, including the threshold for unearned income, child’s standard deduction, and parental rate calculations under U.S. tax law.
  • Chapter 15: Adjustments, Deductions, and Credits
    • Adjustments to Arrive at Adjusted Gross Income (Self-Employed Expenses, IRAs, HSAs)
      Learn how to reduce taxable income through common above-the-line adjustments, including self-employed expenses, traditional IRA deductions, and Health Savings Accounts (HSAs). Explore definitions, eligibility criteria, phaseouts, and real-world examples.
    • Itemized Deductions (Medical, Taxes, Interest, Charity, Casualty)
      Maximize tax benefits by understanding the thresholds, AGI limitations, SALT caps, and other special rules for itemized deductions, including medical expenses, taxes, interest, charitable contributions, and casualty losses.
    • Tax Credits (Refundable vs. Nonrefundable)
      Learn the differences between refundable and nonrefundable tax credits, including critical qualifications, calculations, and best practices for major credits such as the Child Tax Credit, Earned Income Tax Credit, and Education Credits.
    • Qualified Business Income Deduction (QBI)
      In-depth exploration of QBI deduction thresholds, specified service trades, W-2 wage limits, and UBIA factors for CPA exam success.
    • Filing Status and Estimated Tax Payments
      Discover how to choose the optimal filing status—including Head of Household, Single, or Married Filing Jointly—and learn about estimated tax safe harbors, payment schedules, and best practices for avoiding underpayment penalties.
  • Chapter 16: Loss Limitations (At-Risk, Passive Activity, and Other)
    • At-Risk Rules and Material vs. Non-Material Participation
      Explore in-depth at-risk basis computations, the significance of material participation under IRS rules, and practical strategies for limiting losses in individual taxation.
    • Passive Activity Loss Limitations and Rental Real Estate Activities
      Discover how rental real estate activities are treated under passive activity loss limitations, including real estate professional exceptions, material participation rules, and the $25,000 offset.
    • Utilization of Suspended Losses upon Disposition
      Learn how suspended passive losses are freed up upon the complete disposition of an activity, and discover strategies for optimal tax outcomes.
    • Hobby Losses and Other Non-Deductible Items
      Explore critical insights into hobby loss rules, key distinguishing factors, and partial deductions to maintain accurate compliance under IRS guidelines.
  • Chapter 17: Reporting of Income from Pass-Through Entities
    • Partnership and S Corporation Flow-Through Items
      Explore how Partnerships and S Corporations report ordinary vs. separately stated items and understand the self-employment tax implications for owners in these dynamic pass-through structures.
    • Separately Stated Items vs. Ordinary Income (Loss)
      Learn how partnerships and S corporations classify, compute, and distribute ordinary income and separately stated items to their owners, including guidance on Section 179 deductions, charitable contributions, and special allocations.
    • Basis Calculations and Loss Utilization
      Explore partner and shareholder basis, outside basis adjustments, debt allocations, and their critical role in limiting losses for pass-through entities.
    • Schedule K-1 Compliance Considerations
      A comprehensive guide on interpreting, classifying, and ensuring compliance with pass-through entity Schedule K-1 forms, including line-by-line insights, common errors, and best practices.
• PART VI: Federal Taxation of Entities (Area V)
  • Chapter 18: Differences Between Book and Tax Income
    • 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
    • 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
    • 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
    • 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
    • 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
  • Chapter 23: Entity Formation and Liquidation Planning
    • 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
    • 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
    • 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
    • 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
    • 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
  • Chapter 28: Nontaxable Exchanges and Involuntary Conversions
    • 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
    • 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
    • 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
  • Chapter 31: Complex Problem Dissections
    • 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
    • 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.