Differences between book and tax income (loss) on the REG CPA Exam
Last reviewed
Differences between book and tax income (loss) is tested on the REG section of the CPA Exam as blueprint group REG.V.A, in REG Area V, Federal Taxation of Entities (including tax preparation), which carries 23 to 33% of the section.
- Section
- REG, Regulation
- Area
- REG.V, Federal Taxation of Entities (including tax preparation), 23 to 33% of the section
- Group
- REG.V.A, Differences between book and tax income (loss)
- Sources mapped
- 27
Which law is tested under differences between book and tax income (loss) on REG?
On the REG section, differences between book and tax income (loss) is tested against 27 sources: IRC Sec. 11 (Tax imposed); IRC Sec. 63 (Taxable income defined); IRC Sec. 101 (Certain death benefits); IRC Sec. 103 (Interest on State and local bonds); IRC Sec. 162 (Trade or business expenses); IRC Sec. 166 (Bad debts); IRC Sec. 168 (Accelerated cost recovery system); IRC Sec. 170 (Charitable, etc., contributions and gifts); IRC Sec. 179 (Election to expense certain depreciable business assets); IRC Sec. 195 (Start-up expenditures); IRC Sec. 243 (Dividends received by corporations); IRC Sec. 246 (Rules applying to deductions for dividends received); IRC Sec. 248 (Organizational expenditures); IRC Sec. 263A; IRC Sec. 264 (Certain amounts paid in connection with insurance contracts); IRC Sec. 265 (Expenses and interest relating to tax-exempt income); IRC Sec. 267 (Losses, expenses, and interest with respect to transactions between related taxpayers); IRC Sec. 274 (Disallowance of certain entertainment, etc., expenses); IRC Sec. 275 (Certain taxes); IRC Sec. 291 (Special rules relating to corporate preference items); IRC Sec. 404; IRC Sec. 451 (General rule for taxable year of inclusion); IRC Sec. 453 (Installment method); IRC Sec. 461 (General rule for taxable year of deduction); IRC Sec. 1211 (Limitation on capital losses); IRC Sec. 1363 (Effect of election on corporation); Treasury Regulations.
| Source | What it covers | Also tested in |
|---|---|---|
| IRC Sec. 11 | Tax imposed | REG.V.B, TCP.II.A, TCP.III.B |
| IRC Sec. 63 | Taxable income defined | REG.IV.C |
| IRC Sec. 101 | Certain death benefits | REG.II.B, REG.IV.A, REG.IV.E, TCP.I.D |
| IRC Sec. 103 | Interest on State and local bonds | REG.II.B, REG.IV.A, REG.IV.E |
| IRC Sec. 162 | Trade or business expenses | REG.IV.C, TCP.II.A, TCP.III.B |
| IRC Sec. 166 | Bad debts | Only here |
| IRC Sec. 168 | Accelerated cost recovery system | REG.III.B, TCP.IV.B |
| IRC Sec. 170 | Charitable, etc., contributions and gifts | REG.IV.C, REG.V.B, TCP.I.D, TCP.II.A |
| IRC Sec. 179 | Election to expense certain depreciable business assets | REG.III.B, REG.IV.B, TCP.IV.B |
| IRC Sec. 195 | Start-up expenditures | Only here |
| IRC Sec. 243 | Dividends received by corporations | REG.V.B, TCP.II.A, TCP.III.B |
| IRC Sec. 246 | Rules applying to deductions for dividends received | REG.V.B, TCP.II.A |
| IRC Sec. 248 | Organizational expenditures | REG.V.B |
| IRC Sec. 263A | Only here | |
| IRC Sec. 264 | Certain amounts paid in connection with insurance contracts | Only here |
| IRC Sec. 265 | Expenses and interest relating to tax-exempt income | Only here |
| IRC Sec. 267 | Losses, expenses, and interest with respect to transactions between related taxpayers | REG.III.A, REG.IV.D, TCP.I.C, TCP.IV.A, TCP.IV.B, TCP.IV.C |
| IRC Sec. 274 | Disallowance of certain entertainment, etc., expenses | Only here |
| IRC Sec. 275 | Certain taxes | TCP.I.A, TCP.III.B |
| IRC Sec. 291 | Special rules relating to corporate preference items | REG.III.B |
| IRC Sec. 404 | Only here | |
| IRC Sec. 451 | General rule for taxable year of inclusion | Only here |
| IRC Sec. 453 | Installment method | REG.III.B, TCP.I.A, TCP.IV.C |
| IRC Sec. 461 | General rule for taxable year of deduction | REG.IV.D, TCP.I.B, TCP.IV.B |
| IRC Sec. 1211 | Limitation on capital losses | REG.IV.D, REG.IV.F, REG.V.B, TCP.IV.B |
| IRC Sec. 1363 | Effect of election on corporation | REG.II.E, REG.IV.B, TCP.III.B, TCP.III.C |
| Treasury Regulations | REG.II.D, REG.IV.D, REG.V.D, REG.V.E, REG.V.F, TCP.II.D |
Is differences between book and tax income (loss) also tested outside REG?
Yes. 15 of the 27 sources behind REG.V.A are also tested in TCP: IRC Sec. 11 (Tax imposed) in TCP.II.A, TCP.III.B; IRC Sec. 101 (Certain death benefits) in TCP.I.D; IRC Sec. 162 (Trade or business expenses) in TCP.II.A, TCP.III.B; IRC Sec. 168 (Accelerated cost recovery system) in TCP.IV.B; IRC Sec. 170 (Charitable, etc., contributions and gifts) in TCP.I.D, TCP.II.A; IRC Sec. 179 (Election to expense certain depreciable business assets) in TCP.IV.B; IRC Sec. 243 (Dividends received by corporations) in TCP.II.A, TCP.III.B; IRC Sec. 246 (Rules applying to deductions for dividends received) in TCP.II.A; IRC Sec. 267 (Losses, expenses, and interest with respect to transactions between related taxpayers) in TCP.I.C, TCP.IV.A, TCP.IV.B, TCP.IV.C; IRC Sec. 275 (Certain taxes) in TCP.I.A, TCP.III.B; IRC Sec. 453 (Installment method) in TCP.I.A, TCP.IV.C; IRC Sec. 461 (General rule for taxable year of deduction) in TCP.I.B, TCP.IV.B; IRC Sec. 1211 (Limitation on capital losses) in TCP.IV.B; IRC Sec. 1363 (Effect of election on corporation) in TCP.III.B, TCP.III.C; Treasury Regulations in TCP.II.D.
Area, group and weight are the AICPA published blueprint. Pass rates are the AICPA published candidate pass rates for 2026 through Q2, read from AICPA & CIMA on 2026-09-30. The AICPA publishes them quarterly. Which Code sections, rules and standards each group is tested against is PocketCPA's own mapping, built from the citations in its lessons and its blind-verified questions. Section captions are the US Code's own headings, from the Legal Information Institute.
Every REG blueprint group · What is tested on REG · Which standards the CPA Exam tests
Common questions
Is differences between book and tax income (loss) tested on the CPA Exam?
Differences between book and tax income (loss) is tested on the REG section of the CPA Exam as blueprint group REG.V.A, in REG Area V, Federal Taxation of Entities (including tax preparation), which carries 23 to 33% of the section.