CPA REG case studies
CPA REG · Put your knowledge to work in context.
The CPA Regulation (REG) section is one of the four core sections of the Uniform CPA Examination, the licensing exam that candidates must pass to become a licensed Certified Public Accountant in the United States. REG focuses on the rules that govern how tax and legal professionals actually work: federal tax procedures and ethical responsibilities, business law, federal taxation of property transactions, federal taxation of individuals, and federal taxation of entities. The CPA REG case studies are 5 cases and about 3,288 words.
1The Amended Return and the Preparer's Circular 230 Exposure
Dana, a CPA, prepared the 2023 Form 1040 for her client Marcus, a cash-basis sole proprietor. Marcus gave Dana a summary spreadsheet showing gross receipts of 310,000 and expenses of 180,000.
719 words, about 4 min2Installment Sale, Related-Party Resale, and the Second Disposition
Priya sells a parcel of investment land to her wholly owned corporation, Priya Holdings Inc., for 600,000 on an installment basis: 100,000 down in year 1 and 100,000 in each of the next five years. Priya's adjusted basis in the land is 200,000, so her gross profit is 400,000 and her gross profit percentage is 400,000 / 600,000 = 66.67%.
596 words, about 3 min3S Corporation Reasonable Compensation and the Distribution Trap
Ridgeway Design LLC elected S corporation status three years ago. It has two equal shareholders: Alan, who works full-time as the lead designer and manages operations, and Beth, a passive investor who does no work for the company.
667 words, about 3 min4Like-Kind Exchange with Boot, Assumed Debt, and a Related-Party Twist
Trent exchanges a warehouse he held for productive use in his business for a smaller retail building also to be held for business use. The warehouse has an adjusted basis of 300,000 and a fair market value of 900,000.
698 words, about 3 min5Estimated Tax, Safe Harbor, and the Underpayment Penalty
Karen is a single filer, age 45, with a mix of W-2 wages and significant self-employment income from consulting. For 2024 her total tax liability is 62,000.
608 words, about 3 min