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AICPA CPA Regulation Sample Questions:

1. Under the uniform capitalization rules applicable to taxpayers with property acquired for resale, which of
the following costs should be capitalized with respect to inventory if no exceptions have been met?

A) Option D
B) Option A
C) Option C
D) Option B

2. An individual had the following capital gains and losses for the year:

What will be the net gain (loss) reported by the individual and at what applicable tax rate(s)?

A) Short-term loss of $3,000 at the ordinary rate and long-term capital gain of $86,000 at the 15% rate.
B) Long-term gain of $16,000 at the 15% rate.
C) Short-term loss of $3,000 at the ordinary rate, long-term capital gain of $10,000 at the 15% rate,
collectibles gain of $10,000 at the 28% rate, and Section 1250 gain of $56,000 at the 25% rate.
D) Long-term capital gain of $3,000 at the 15% rate, collectibles gain of $10,000 at the 28% rate, and
Section 1250 gain of $56,000 at the 25% rate.

3. Among which of the following related parties are losses from sales and exchanges not recognized for tax
purposes?

A) Ancestors, lineal descendants, and all in-laws.
B) Grandfather and granddaughter.
C) Father-in-law and son-in-law.
D) Brother-in-law and sister-in-law.

4. Which of the following statements is the best definition of real property?

A) Real property is all tangible property including land.
B) Real property is land and everything permanently attached to it.
C) Real property is land and intangible property in realized form.
D) Real property is only land.

5. Smith made a gift of property to Thompson. Smith's basis in the property was $1,200. The fair market
value at the time of the gift was $1,400. Thompson sold the property for $2,500. What was the amount of
Thompson's gain on the disposition?

A) $1,300
B) $1,100
C) $0
D) $2,500

Solutions:

Question # 1 Answer: B

Question # 2 Answer: B

Question # 3 Answer: B

Question # 4 Answer: B

Question # 5 Answer: A