REG CPA Exam 2026: Syllabus, Pass Rates & Study Plan
REG CPA Exam 2026: Syllabus, Format and How Indian Candidates Pass It
REG is the Core CPA section that tests US federal taxation, business law and ethics. Every CPA candidate must pass it. For ICAI-trained candidates it carries the steepest learning curve — not because it is the hardest to pass, but because US tax law shares almost nothing with the Indian Income-tax Act. This guide maps the 2026 Blueprint, the OBBBA update now in effect, and gives you a structure to start from scratch.
Updated July 2026 · Eduyush CPA Team · 12 min read
The REG CPA exam is the Core section that tests US federal taxation, business law and professional ethics. The 2026 version contains 72 multiple-choice questions and 8 task-based simulations across five Blueprint areas, scored 50% MCQ and 50% TBS over a four-hour sitting. REG is the most passable Core section (above 63% in 2025, 66.65% in Q1 2026), but it has the steepest unfamiliar-content curve for Indian CAs because US federal tax differs fundamentally from Indian tax. Since 1 July 2026, REG also tests provisions of the One Big Beautiful Bill Act (OBBBA).
| REG at a glance | Detail |
|---|---|
| Duration | 4 hours |
| MCQs | 72 |
| TBSs | 8 |
| Pass rate (Q1 2026) | 66.65% — most passable Core section |
| Core / Discipline | Core (one of three every candidate must pass) |
| Difficulty | Medium — high volume, low ambiguity |
| Best taken after | FAR |
| Main focus | US federal taxation |
- REG is one of three Core sections every candidate must pass — see the six CPA sections for how it fits the full exam.
- Five Blueprint areas: Ethics & Federal Tax Procedures, Business Law, Property Transactions, Taxation of Individuals, and Taxation of Entities.
- Taxation of Individuals (22–32%) and Entities (23–33%) together make up the bulk of the exam — master these before anything else.
- The hard part for Indian CAs is volume of unfamiliar rules, not conceptual difficulty. The Internal Revenue Code is learnable; your ICAI tax knowledge will not transfer.
- Since 1 July 2026, REG tests One Big Beautiful Bill Act (OBBBA) provisions. If you are sitting REG now, this already applies to you.
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.
REG is entirely US-jurisdiction. Nothing from the Income-tax Act 1961, GST, or the Companies Act 2013 applies. Treat it as a new subject, not a translation of what you already know. The structure transfers; the rules do not. If you are coming straight from ICAI, read the CPA-after-CA path for Indian CAs first.
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.
| Blueprint area | Weight | What it covers |
|---|---|---|
| I — Ethics, Professional Responsibilities & Federal Tax Procedures | 10–20% | Circular 230, preparer rules and penalties, licensing and discipline, audits and appeals, authoritative hierarchy, legal duties of the CPA |
| II — Business Law | 15–25% | Agency, contracts, debtor–creditor relationships, UCC, business structure, federal regulation of business |
| III — Federal Taxation of Property Transactions | 5–15% | Basis, depreciation and MACRS, cost recovery, gains and losses on the sale of assets |
| IV — Federal Taxation of Individuals | 22–32% | Gross income, adjusted gross income, taxable income, filing status, credits, loss limitations, pass-through income on Form 1040 |
| V — Federal Taxation of Entities | 23–33% | C corporations, S corporations, partnerships, partnership and shareholder basis, LLC classification, tax-exempt organisations, book-to-tax adjustments |
Roughly half of REG sits in Areas IV and V combined. If your study time is constrained, weight it the way the Blueprint does — individual and entity taxation first, ethics and property transactions last. Do not over-invest in business law: at 15–25% it is meaningful, but it is rote and rewards memorisation, not weeks of study.
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.
Candidates routinely confuse tax-preparer rules with the general CPA ethics tested on AUD. REG ethics is specifically Circular 230 and preparer conduct; AUD ethics is the AICPA Code of Professional Conduct and auditor independence. Test which framework a question is invoking before you answer — the standards differ, and the examiner is checking whether you know which one applies.
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.
| Component | Count | Detail |
|---|---|---|
| Multiple-choice questions | 72 | Two MCQ testlets of 36 each |
| Task-based simulations | 8 | Three TBS testlets: 2 + 3 + 3 |
| Scoring weight | 50 / 50 | MCQs 50%, TBSs 50% |
| Total time | 4 hours | Passing score 75 on a scaled basis |
Since CPA Evolution (January 2024) the exam uses a linear design — every MCQ testlet is weighted equally, so difficulty does not ramp based on how you performed on the first testlet. There is no adaptive penalty for a strong start. Pace at roughly 1.25 minutes per MCQ to leave enough time for the eight simulations, where the other 50% of your score actually lives.
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 (47.80%) and FAR (43.46%). 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.
REG is high-volume, low-ambiguity. The candidates who fail it under-practise; the candidates who pass it drill questions until the rules become reflex.
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.
REG is the section adaptive prep is built for: a large syllabus, heavy memorisation, hundreds of rules with no intuitive anchor, and a constant need to find your weak areas fast. The Eduyush CPA course is built on Surgent's adaptive A.S.A.P. platform, which diagnoses where you are losing marks — say, partnership basis or AMT — and concentrates drilling there instead of making you re-grind topics you already know. Eduyush delivers it with India-specific pricing (₹32,000, roughly $330 at ₹97/USD) and a question bank of 9,000+ MCQs and 500+ simulations. For an ICAI-trained candidate starting US tax from zero, that targeting is the difference between 200 wasted hours and a focused pass. Read more on how Eduyush delivers Surgent in India.
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.
| Background | Estimated REG study hours |
|---|---|
| CA (ICAI) | 100–140 |
| ACCA | 120–160 |
| B.Com | 150–200 |
| Non-accounting | 180–250 |
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.
- Partnership basis — tracking inside and outside basis through contributions and distributions.
- S-corporation basis — stock and debt basis, and the order of loss limitations.
- Form 1040 structure — the build from gross income to AGI to taxable income.
- AMT — understood structurally; you are not tested on inflation-indexed amounts.
- Circular 230 — preparer duties, position-and-disclosure standards under §10.34.
- Like-kind exchanges (§1031) — post-TCJA, real property only.
- MACRS depreciation — conventions, recovery periods and cost recovery.
Does REG test the One Big Beautiful Bill Act (OBBBA)?
Yes. Since 1 July 2026, REG tests provisions of the One Big Beautiful Bill Act (OBBBA, H.R. 1) with 2024–2025 effective dates. This cutover has already happened — if you are sitting REG now, OBBBA content applies to your exam, and pre-OBBBA TCJA sunset scenarios are no longer testable. OBBBA affects only REG and TCP; the other four sections are unchanged.
| If you sat REG… | OBBBA tested? | What to study |
|---|---|---|
| Through 30 June 2026 | No | Pre-OBBBA tax law only |
| On / after 1 July 2026 | Yes | Pre-OBBBA law plus the OBBBA provisions added to REG |
The OBBBA provisions now in REG's testable universe include permanent TCJA tax rates and brackets, restored 100% bonus depreciation, the raised SALT cap of $40,000 (rising to $40,400 in 2026), and the termination of certain energy credits (§25C, §25D, §30D) that older study materials may still present as available. For the full breakdown, see the One Big Beautiful Bill Act and the CPA exam guide.
If you plan to take TCP as your Discipline, sit both REG and TCP on the same side of the 1 July 2026 cutoff. Splitting them means learning pre-OBBBA law for one and OBBBA for the other — the same tax content twice. Confirm your review course has fully rolled OBBBA content into its material, and verify the current Blueprint and OBBBA testing dates at aicpa-cima.com before you book.
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.
REG and the Enrolled Agent credential cover overlapping US-tax ground, but REG is broader (it adds business law and ethics) and is one part of a wider qualification. If you are weighing the two, the scope comparison in Enrolled Agent vs CPA shows exactly where REG's tax content stops and the CPA's wider mandate begins.
Where REG sits among the six CPA sections
REG is one of three Core sections; you also pass FAR and AUD, then choose one Discipline. Use the links below to move across the full cluster.
Frequently asked questions about the REG CPA exam
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