Pass your actual test with our AICPA REG training material at first attempt
Last Updated: Aug 28, 2026
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| Section | Weight | Objectives |
|---|---|---|
| Federal Taxation of Individuals | 15–25% | - Individual income taxation
|
| Federal Taxation of Property Transactions | 12–22% | - Property transactions
|
| Federal Taxation of Entities | 18–28% | - Business entity taxation
|
| Ethics, Professional Responsibilities, and Federal Tax Procedures | 15–25% | - Federal tax procedures
|
| Business Law | 10–20% | - Business structure law
|
Question 1
Under a $150,000 insurance policy on her deceased father's life, May Green is to receive $12,000 per
year for 15 years. Of the $12,000 received in 1987, the amount subject to income tax is:
A. $1,000
B. $2,000
C. $12,000
D. $0
Question 2
Darr, an employee of Sorce C corporation, is not a shareholder. Which of the following would be included
in a taxpayer's gross income?
A. The fair market value of land that the taxpayer inherited from an uncle.
B. The dividend income on shares of stock that the taxpayer received for services rendered.
C. Employer-provided medical insurance coverage under a health plan.
D. A $10,000 gift from the taxpayer's grandparents.
Question 3
Hall, a divorced person and custodian of her 12-year old child, filed her 1990 federal income tax return as
head of a household. She submitted the following information to the CPA who prepared her 1990 return:
. In 1990, Hall sold an antique that she bought in 1980 to display in her home. Hall paid $800 for the
antique and sold it for $1,400, using the proceeds to pay a court ordered judgment.
The $600 gain that Hall realized on the sale of the antique should be treated as:
A. An involuntary conversion.
B. Long-term capital gain.
C. A nontaxable antiquities transaction.
D. Ordinary income.
Question 4
Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
In 1994, Joan received $3,500 as beneficiary of the death benefit, which was provided by her brother's
employer. Joan's brother did not have a nonforfeitable right to receive the money while living.
A. $10,000
B. $25,000
C. $2,500
D. $1,000
E. $2,000
F. $3,000
G. $900
H. $50,000
I. $75,000
J. $55,000
K. $1,500
L. $0
M. $1,300
N. $500
O. $1,250
Question 5
Smith made a gift of property to Thompson. Smith's basis in the property was $1,200. The fair market
value at the time of the gift was $1,400. Thompson sold the property for $2,500. What was the amount of
Thompson's gain on the disposition?
A. $1,100
B. $2,500
C. $0
D. $1,300
Solutions:
| Question 1 Answer: B | Question 2 Answer: B | Question 3 Answer: B | Question 4 Answer: L | Question 5 Answer: D |
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