Which Sections of the Regulation Exam Are Changing with TCJA?

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. December 10, 2018 is the last day the REG Exam will be administered without content related to the TCJA. If you’re planning to wait to take the REG section of the exam in 2019, you need to know the ins-and-outs of these changes.

So, what exactly is changing on the REG Exam?

At a high level, revisions to the REG Exam include:

  • Modifications in terminology to address obsolescence resulting from TCJA
  • Adding representative task statements to address significant new concepts introduced by TCJA

It’s important to know which specific areas of the REG Exam are affected by the TCJA. Area I, Ethics, Professional Responsibilities and Federal Tax, and Area II, Business Law, will have no changes. The areas that will be most impacted by the new changes are Area III, Federal Taxation and Property Transactions, Area IV, Federal Taxation of Individuals, and Area V, Federal Taxation of Entities.

Let’s dive deeper – here are the groups that are changing within each REG area:

  • Area III – Federal Taxation of Property Transactions (12-22% of REG)
    • Group B – Cost Recovery (depreciation, depletion and amortization)
  • Area IV – Federal Taxation of Individuals (15-25% of REG)
    • 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% of REG)
    • Group C – C Corporations
    • Group E – Partnerships

Now that you know what’s specifically changing on the REG exam, you should consider when to take the exam. We can help with that! Stay tuned to the Becker Pinnacle for an understanding of whether to take the exam in 2018 or 2019.

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