How long should I study for REG?

Most candidates need 80-110 hours for REG. At about 20 hours per week, plan for roughly 4-6 weeks. REG requires memorizing tax rules and understanding how they interact.

What is the REG pass rate?

REG has a pass rate around 63%, the highest among core sections. However, candidates often struggle with the breadth of tax topics and business law concepts.

Is REG mostly about taxes?

Federal taxation makes up the majority of REG content, covering individual, business, and property transactions. Business law and ethics represent a smaller but important portion. The tax content requires significant memorization of rules and phase-outs.

Should I study REG before or after TCP?

REG covers foundational tax concepts that TCP builds upon. Most candidates benefit from taking REG before TCP, as the advanced tax planning concepts in TCP assume familiarity with basic tax rules covered in REG.

What are the hardest topics on REG?

Basis calculations, property transactions (including like-kind exchanges under Section 1031), and partnership taxation are commonly cited as the most challenging REG topics. These areas require understanding complex interactions between multiple tax rules.

REG

CPA Exam Section Guide

Regulation

REG covers federal taxation for individuals, entities, and property transactions, along with business law and ethics. This section requires both calculation skills and conceptual understanding.

REGSection Code

Moderate-HighDifficulty

80-110 hoursAvg. Study Time

37+Topics Covered

What This Section Tests

The REG section covers the following key topics:

✓Regulations governing practice before the Internal Revenue Service

✓Internal Revenue Code and Regulations related to tax return preparers

✓Licensing and disciplinary systems

✓Audits, appeals and the judicial process

✓Substantiation and disclosure

✓Taxpayer penalties

✓Authoritative hierarchy

✓Common law duties and liabilities to clients and third parties

✓Privileged communications, confidentiality and privacy acts

✓Authority of agents and principals

✓Duties and liabilities of agents and principals

✓Formation

✓Performance and discharge

✓Breach and remedies

✓Debtor-creditor relationships

✓Federal laws and regulations

✓Selection and formation of business entity and related operation and termination

✓Rights, duties, legal obligations and authority of owners and management

✓Basis of assets

✓Cost recovery (depreciation and amortization)

✓Gross income (inclusions and exclusions)

✓Reporting of items from pass-through entities

✓Adjustments and deductions to arrive at AGI and taxable income

✓Loss limitations

✓Filing status

✓Computation of tax and credits

✓Differences between book and tax income (loss)

✓C corp computations of taxable income, tax liability and allowable credits

✓State and local tax issues

✓S corp eligibility and election

✓S corp determination of ordinary business income (loss) and separately stated items

✓S corp basis of shareholder's interest

✓Partnership determination of ordinary business income (loss) and separately stated items

✓Partnership basis of partner's interest

✓Limited liability companies

✓Tax-exempt organizations

✓Foundational tax concepts (beyond enumerated blueprint)

Why Candidates Commonly Struggle with REG

Trying to memorize tax rates and thresholds that change annually
Not understanding basis concepts - these flow through every topic
Underestimating business law - it's tested more heavily than most expect
Getting lost in the details of complex entity transactions like like-kind exchanges
Poor calculation accuracy on tax computation simulations

What to Prioritize

1
Master basis calculations - original basis, adjusted basis, and basis in property received
2
Understand individual tax calculation flow from gross income to taxable income to tax
3
Focus on entity taxation differences - when income is taxed and how it flows to owners via partnership taxation
4
Don't skip business law - contracts and agency are frequently emphasized and often more approachable
5
Practice property transaction calculations including like-kind exchanges until they're automatic

Effective Study Strategies

REG is best taken after FAR if you have tax experience, or can be taken early if you're fresh from a tax class. See our best exam order guide for more.

Create a flowchart for each entity type showing how income flows from the entity to the owner's return. Understanding this flow is more important than memorizing specific rules.

Basis is the most important concept in REG. If you understand basis, you can work through almost any property or entity transaction. Make this your foundation.

Business law topics follow common sense more than you'd expect. Think about what's fair and reasonable - contract law and agency often follow intuitive principles.

Build a personalized study plan and use free practice materials to supplement. Understanding how a real 1040 or 1065 works helps you answer exam questions.

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What's Included

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Other CPA Sections

FAR

Financial Accounting

AUD

Auditing & Attestation

REG