The 2017 Tax Cuts and Jobs Act (TCJA) will have a major impact on the Regulation section of the CPA exam, starting in January 2019. If you’re planning to take REG in 2019, you need to know the ins-and-outs of the specific changes and how Becker has already revised content to keep you up-to-speed on this section of the exam.
First, what’s changing?
| Area Name | Percentage of REG | Groups Changing |
| Area III – Federal Taxation of Property Transactions | 12-22% | Group B – Cost Recovery (depreciation, depletion and amortization) |
| Area IV – Federal Taxation of Individuals | 15-25% | Group C – Adjustments and deductions to arrive at adjusted gross income and taxable income Group F – Filing status and exemptions |
| Area V – Federal Taxation of Entities | 28-38% | Group C – C Corporations Group E – Partnerships |
How is Becker tackling these changes to be sure that I’m fully prepared for REG in 2019?
At a high level, we moved tax forms from the physical textbooks to our software to ensure more timely updates and video walkthroughs. We also updated the rates and amounts for all indexed numbers.
Here’s a detailed look at revisions to each section of Becker’s Regulation review.
REG 1 & 2 Individual Taxation:
- Elimination of personal exemptions
- Increased standard deduction amounts
- Changes in tax brackets and tax rates
- Elimination of miscellaneous (in excess of 2% AGI) deductions
- Entertainment expenses no longer deductible
- Alimony paid or received is no longer deductible or includable in income
- Elimination of domestic production activities deduction
- Moving expenses only deductible for military moves
- Home equity loan interest is no longer deductible
- Changes to child tax credit
- Additional excess business loss limitation
- New Section 199A Qualified Business Income (QBI) deduction for pass-through entities
REG 3 Property Taxation:
- Changes to qualifying property for life-kind exchanges
- Changes to carryback and carryforward rules for net operating losses
REG 4 Corporate Taxation:
- Elimination of corporate AMT
- Elimination of domestic production activities deduction
- Entertainment expenses no longer deductible
- Changes to carryback and carryforward rules for net operating losses
- New corporate flat tax rate of 21 percent
REG 5 Flow-through Entity Taxation and Multi-jurisdictional Tax Issues:
- New Section 199A Qualified Business Income (QBI) deduction for pass-through entities
- Additional excess business loss limitation
- Elimination of technical termination of a partnership
- Addition of a new module on international tax issues covering BEAT, FDII, GILTI, and more
REG 6 Other Entity Taxation:
- New lifetime combined exclusion for gifts and estates
REG 7 & 8 Business Law:
- Elimination of individual penalty for failure to comply with the Affordable Care Act
If you’re planning to take the Regulation Exam in 2019, don’t wait – start preparing now! We’ve already updated our material to reflect changes from the Tax Cuts and Jobs Act. Visit our web page to jump-start your exam preparation.
