Browse papers
LevelCPA — Regulation
SubjectCPA — Regulation
Year2025 BS
Exam sessionModel questions
Full marks99
Time allowed240 minutes
Questions10, all with step-by-step solutions
A

Regulation

Select the best answer.

10 questions·1 mark each
1Multiple choice1 mark

For the 2024 tax year, a single taxpayer has adjusted gross income (AGI) of 95,000.Thestandarddeductionforasinglefileris95,000. The standard deduction for a single filer is 14,600. What is the taxpayer's taxable income, assuming no itemized deductions exceed the standard deduction?

  • a

    $80,400

  • b

    $95,000

  • c

    $82,050

  • d

    $75,000

Correct answer: a

$80,400

Taxable income = AGI - Standard Deduction = 95,00095,000 - 14,600 = $80,400. Under IRC §63, a taxpayer's taxable income is AGI minus the greater of the standard deduction or itemized deductions.

federal-taxation
2Multiple choice1 mark

Under the Uniform Commercial Code (UCC) Article 2, the statute of frauds requires a written agreement for the sale of goods priced at or above:

  • a

    $250

  • b

    $500

  • c

    $1,000

  • d

    $5,000

Correct answer: b

$500

UCC §2-201 provides that a contract for the sale of goods for $500 or more is not enforceable unless evidenced by a writing signed by the party against whom enforcement is sought.

business-law
3Multiple choice1 mark

Under Treasury Department Circular 230, a CPA who prepares a tax return is required to:

  • a

    Audit the taxpayer's books before signing the return

  • b

    Exercise due diligence in preparing the return

  • c

    Guarantee the accuracy of all client-provided information

  • d

    Represent the client before the Tax Court

Correct answer: b

Exercise due diligence in preparing the return

Circular 230 §10.22 requires practitioners to exercise due diligence in preparing tax returns. The CPA need not audit the books or guarantee client-provided information but must make reasonable inquiries.

ethics
4Multiple choice1 mark

A taxpayer receives a 30-day letter from the IRS proposing a deficiency. If the taxpayer does not respond within 30 days, the IRS will next issue:

  • a

    A criminal referral

  • b

    A 90-day letter (statutory notice of deficiency)

  • c

    An automatic levy on bank accounts

  • d

    A refund check

Correct answer: b

A 90-day letter (statutory notice of deficiency)

If the taxpayer does not respond to the 30-day letter, the IRS issues a 90-day letter (statutory notice of deficiency) under IRC §6212, which gives the taxpayer 90 days to petition the Tax Court.

tax-procedures
5Multiple choice1 mark

A taxpayer sells a rental property held for 5 years for 400,000.Theadjustedbasisis400,000. The adjusted basis is 250,000, and accumulated depreciation is $60,000. What amount of gain is subject to IRC §1250 depreciation recapture (taxed at a maximum rate of 25%)?

  • a

    $150,000

  • b

    $90,000

  • c

    $60,000

  • d

    $0

Correct answer: c

$60,000

Under IRC §1250, unrecaptured depreciation on real property is taxed at a maximum rate of 25%. The accumulated depreciation of $60,000 is subject to this recapture.

property-transactions
6Multiple choice1 mark

Which of the following types of income is not subject to self-employment tax?

  • a

    Net earnings from a sole proprietorship

  • b

    Guaranteed payments to a general partner

  • c

    Rental income from real estate (non-dealer)

  • d

    Net earnings from a single-member LLC

Correct answer: c

Rental income from real estate (non-dealer)

Under IRC §1402(a)(1), rental income from real estate is specifically excluded from self-employment income unless the taxpayer is a real estate dealer.

individual-taxation
7Multiple choice1 mark

A C corporation has taxable income of $350,000 for 2024. Under the Tax Cuts and Jobs Act (TCJA), the federal corporate tax rate is a flat:

  • a

    15%

  • b

    21%

  • c

    28%

  • d

    35%

Correct answer: b

21%

The TCJA established a flat 21% corporate tax rate under IRC §11(b), replacing the prior graduated rate structure. The tax liability is 350,000×21350,000 × 21% = 73,500.

federal-taxation
8Multiple choice1 mark

In a general partnership, which of the following statements is correct regarding a partner's liability?

  • a

    Partners are liable only up to their capital contributions

  • b

    Partners have joint and several liability for partnership obligations

  • c

    Only the managing partner has personal liability

  • d

    Partners are never personally liable if the partnership has assets

Correct answer: b

Partners have joint and several liability for partnership obligations

Under the Revised Uniform Partnership Act (RUPA) §306, all partners are jointly and severally liable for all obligations of the partnership.

business-law
9Multiple choice1 mark

The general statute of limitations for the IRS to assess additional tax is:

  • a

    1 year from the filing date

  • b

    3 years from the later of the filing date or the due date

  • c

    5 years from the filing date

  • d

    7 years from the due date

Correct answer: b

3 years from the later of the filing date or the due date

Under IRC §6501(a), the IRS generally has 3 years from the later of the date the return was filed or the due date of the return to assess additional tax.

tax-procedures
10Multiple choice1 mark

Under IRC §1031, which of the following properties qualifies for a like-kind exchange?

  • a

    A personal residence exchanged for a vacation home

  • b

    Inventory held for sale exchanged for other inventory

  • c

    An office building exchanged for undeveloped land held for investment

  • d

    Stock in a corporation exchanged for stock in another corporation

Correct answer: c

An office building exchanged for undeveloped land held for investment

Under IRC §1031 (post-TCJA), like-kind exchanges are limited to real property held for productive use in a trade or business or for investment.

property-transactions

Frequently asked questions

Where can I find the CPA — Regulation CPA — Regulation question paper 2025?
The full CPA — Regulation CPA — Regulation 2025 (Model questions) question paper is available free on Kekkei. You can read every question online and attempt the paper under timed exam conditions.
Does the CPA — Regulation 2025 paper come with solutions?
Yes. Every question on this CPA — Regulation past paper includes a step-by-step solution, plus instant AI feedback when you attempt it on Kekkei.
How many marks is the CPA — Regulation CPA — Regulation 2025 paper?
The CPA — Regulation CPA — Regulation 2025 paper carries 99 full marks and is meant to be completed in 240 minutes, across 10 questions.
Is practising this CPA — Regulation past paper free?
Yes — reading and attempting this CPA — Regulation past paper on Kekkei is completely free.