Picture this – you have decided to start studying for the Regulation (REG) section. You’re beginning to feel confident, getting a handle on the material and then you start reading about taxation changes that are on the horizon. As stated in an earlier blog this year, the CPA exam is ever-evolving and it is important to keep up with changes to ensure that you’re studying the most up-to-date materials available. Luckily, you’re in good hands with Yaeger CPA Review as we rework and rewrite our books to the AICPA Blueprints. But I know you’re wondering – what is changing, and when is it happening?
Why is it changing?
The AICPA released new pronouncements in March 2018 for the REG content updates. Effective Quarter One 2019 the most significant overhaul of the U.S. tax code since the Tax Reform Act of 1986 will become testable. While the “Tax Cuts and Jobs Act 2017” (formally known as Public Law No. 115-97 An act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018) was signed in late 2017, there was a delay in implementation of the changes to allow everyone to get up to speed – including Yaeger CPA Review.
What is changing?
The AICPA releases summaries of revisions to the Uniform CPA Examination Blueprints after they are approved by the Board of Examiners (BOE). The revisions to REG “modify terminology in Groups, Topics and representative task statements to address obsolescence from P.L. 115-97 and add representative task statements to existing Groups/Topics to address significant new concepts.” Those significant concepts are listed:
- Compare the tax benefits of the different expensing options for tax depreciation for federal income tax purposes
- Calculate the qualifying business income (QBI) deduction for federal income tax purposes
- Recall relationships meeting the definition of dependent for purposes of determining taxpayer filing status
- Compute taxable income, tax liability and allowable credits under the new rates and rules
- Calculate the credits allowable as a reduction of tax for a C corporation
- Analyze the impact of net operating and/or capital losses during tax planning for a C corporation
- Identify situations where the base erosion and anti-abuse tax (BEAT) would apply
- Identify factors that would qualify income as Foreign Derived Intangible Income (FDII)
- Define the components of Global Intangible Low-Taxed Income (GILTI)
- Calculate the revised basis of partnership assets due to a transfer of a partnership interest for federal income tax purposes
What does this mean for me?
While the changes may seem overwhelming, especially if the material tested is different to that studied during your college classes, the Exam is testing the knowledge and skills that a newly licensed CPA must demonstrate. It is extremely important to gain a thorough understanding of the current tax legislation for the REG section so that you feel confident in applying the skills learned in your future position as a CPA.
The following table from the AICPA CPA Exam Blueprints effective January 2019 summarizes the content areas and the allocation of the content tested in the REG section of the Exam:
Note that the weight of each area has not changed for 2019, meaning that the structure of the Exam remains unchanged.
What is next?
Take a deep breath. While many people may have recommended trying to complete REG before the changes, sometimes that isn’t feasible. Remember – you have come this far in your CPA journey, some changes in tax law just mean that you’ll need to study a little harder and rely less on your previously gained knowledge. Feel confident in the fact that you have chosen, or are choosing, Yaeger CPA Review to help you gain the knowledge that you need to pass REG by focusing on the concepts listed in the AICPA Blueprints. We have done the work to have the materials ready for you for Quarter One 2019 and look forward taking the guess work out of the equation and teaching you to the test!