REG CPA Exam 2026: Syllabus, Pass Rates & Study Plan

What is the CPA REG exam?

REG is the Core CPA exam section that tests US ethics and professional responsibilities in tax practice, US business law, and US federal tax compliance for individuals and entities. The full name is Taxation and Regulation. Alongside Auditing and Attestation (AUD) and Financial Accounting and Reporting (FAR), it is one of the three Core sections that every CPA candidate must pass, regardless of which Discipline they choose.

The 2026 Blueprint frames REG around the work an entry-level CPA actually does: preparing and reviewing tax returns built on routine, recurring transactions. That framing matters. The exam does not ask you to be a tax strategist — it asks you to apply the Internal Revenue Code correctly to ordinary facts, verify source data, and use authoritative materials such as Treasury Regulations to resolve issues. Aggressive planning and complex structuring belong to the TCP Discipline, not REG.

What is tested on REG? The five Blueprint areas and weights

REG is tested across five content areas, each given a percentage range in the 2026 Blueprint. The two entity- and individual-tax areas dominate; ethics and property transactions are the lightest. The ranges below are the official AICPA allocations effective 1 January 2026.

What topics are in REG?

The substance of REG is the Internal Revenue Code applied to individuals and entities, framed by ethics and business law. The list below is what you must be able to compute and apply — not just recognise.

Tax — the core of the exam

For individuals: the build from gross income to adjusted gross income to taxable income, inclusions and exclusions, filing status, the role of credits, loss limitations, and reporting pass-through income on Form 1040. The alternative minimum tax (AMT) is in scope as a concept you must understand structurally, though you will not be tested on inflation-indexed amounts.

For entities: separating ordinary business income from separately stated items for S corporations and partnerships, tracking partnership basis and shareholder basis through current-year transactions, computing taxable income for C corporations, book-to-tax adjustments, limited liability company classification elections, S-corporation eligibility, and types of tax-exempt organisation.

For property: asset basis, conversion of personal to business use, intangibles, and cost recovery through depreciation and MACRS. The like-kind exchange under §1031 is examinable but — post-TCJA — applies only to real property, a distinction examiners test directly.

Ethics, procedures and law

Area I rests on Treasury Department Circular 230 and the standards for tax return preparers — for example, the position-and-disclosure standards under §10.34. You must know federal tax procedures (audits, appeals, statute of limitations, the authoritative hierarchy) and taxpayer penalties as they apply to both clients and preparers. Area II covers business law: agency, contracts, debtor–creditor relationships and the UCC.

How many MCQs are on REG? The exam format

REG contains 72 multiple-choice questions and 8 task-based simulations, delivered across five testlets in a four-hour sitting. MCQs and TBSs are each worth 50% of your score, so simulations are not a side dish — they decide half your result.

Is REG the hardest CPA section?

No. By pass rate, REG is the most passable Core section — above 63% in 2025, rising to 66.65% in Q1 2026, well ahead of AUD (around 48%) and FAR (around 43%). The reputation for difficulty is dated. Under CPA Evolution, much of REG's heaviest tax content moved into the TCP Discipline, leaving the Core section leaner and more compliance-focused.

What makes REG feel hard is not conceptual depth — it is the sheer volume of unfamiliar rules with no intuitive anchor. You can reason your way through an audit judgment in AUD. You cannot reason your way to the holding period for §1231 property; you simply have to know it. For the full picture across all six sections, see the REG pass rate in context.

How hard is REG for Indian CAs?

For Indian CAs, REG is the section with the steepest learning curve — even though it is statistically passable. The reason is specific: US federal tax is built on entirely different principles from the Indian Income-tax Act. There is no GST analogue, residency and source rules differ, entity taxation (especially S corporations and partnership basis) has no Indian counterpart, and the Internal Revenue Code's structure will feel alien for the first few weeks.

The good news is that none of this is conceptually beyond a CA. Your training in reading statute, reconciling book and tax figures, and working basis and depreciation schedules transfers directly — only the rules change. Expect the first three weeks to feel slow, then a sharp acceleration once the IRC's logic clicks. This is the section where structured, repeated question practice matters most, because recognition beats recall under exam pressure.

How long does REG take to study?

Plan REG study time by your background, not by a single average. ICAI-trained CAs need the fewest hours because exam technique and the accounting base transfer — only the rules are new. That is why REG can be a CA's steepest section and still demand less time than other backgrounds need.

Estimates, not guarantees — your hours depend on prior tax exposure and weekly consistency.

REG topics Indian candidates struggle with most

A handful of topics account for most of the difficulty Indian candidates report — almost all in entity tax and property, where no Indian analogue exists. Front-load practice here.

Should you take REG before July 2026?

If you can sit REG on or before 30 June 2026, you will be tested only on pre-OBBBA tax law. From 1 July 2026, provisions of the One Big Beautiful Bill Act (OBBBA, H.R. 1) become eligible for testing — and they affect only REG and TCP, not the other sections.

How should you approach REG, and where does it fit?

Start REG only after you have a working US-tax vocabulary, and give it real runway. A common, effective sequence is to slot REG after FAR but before your Discipline, especially if you plan to take TCP — REG builds the tax foundation that TCP then extends. The detailed logic is in our guide to where REG fits in your exam sequence.

Frequently asked questions about the REG CPA exam