Loss limitations on the REG CPA Exam
Last reviewed
Loss limitations is tested on the REG section of the CPA Exam as blueprint group REG.IV.D, in REG Area IV, Federal Taxation of Individuals, which carries 22 to 32% of the section.
- Section
- REG, Regulation
- Area
- REG.IV, Federal Taxation of Individuals, 22 to 32% of the section
- Group
- REG.IV.D, Loss limitations
- Sources mapped
- 14
Which law is tested under loss limitations on REG?
On the REG section, loss limitations is tested against 14 sources: IRC Sec. 172 (Net operating loss deduction); IRC Sec. 183 (Activities not engaged in for profit); IRC Sec. 267 (Losses, expenses, and interest with respect to transactions between related taxpayers); IRC Sec. 461 (General rule for taxable year of deduction); IRC Sec. 465 (Deductions limited to amount at risk); IRC Sec. 469 (Passive activity losses and credits limited); IRC Sec. 542 (Definition of personal holding company); IRC Sec. 752 (Treatment of certain liabilities); IRC Sec. 1091 (Loss from wash sales of stock or securities); IRC Sec. 1211 (Limitation on capital losses); IRC Sec. 1212 (Capital loss carrybacks and carryovers); IRC Sec. 1244 (Losses on small business stock); IRC Sec. 1366 (Pass-thru of items to shareholders); Treasury Regulations.
| Source | What it covers | Also tested in |
|---|---|---|
| IRC Sec. 172 | Net operating loss deduction | REG.V.B, TCP.II.A, TCP.III.B |
| IRC Sec. 183 | Activities not engaged in for profit | Only here |
| IRC Sec. 267 | Losses, expenses, and interest with respect to transactions between related taxpayers | REG.III.A, REG.V.A, TCP.I.C, TCP.IV.A, TCP.IV.B, TCP.IV.C |
| IRC Sec. 461 | General rule for taxable year of deduction | REG.V.A, TCP.I.B, TCP.IV.B |
| IRC Sec. 465 | Deductions limited to amount at risk | REG.IV.B, REG.V.E, TCP.I.B, TCP.IV.B |
| IRC Sec. 469 | Passive activity losses and credits limited | REG.IV.B, REG.V.E, TCP.I.B, TCP.IV.B |
| IRC Sec. 542 | Definition of personal holding company | REG.V.B, TCP.III.B |
| IRC Sec. 752 | Treatment of certain liabilities | REG.V.D, REG.V.E, TCP.II.C, TCP.III.A, TCP.III.C, TCP.III.D, TCP.IV.A, TCP.IV.B, TCP.IV.C |
| IRC Sec. 1091 | Loss from wash sales of stock or securities | REG.III.A, TCP.IV.A |
| IRC Sec. 1211 | Limitation on capital losses | REG.IV.F, REG.V.A, REG.V.B, TCP.IV.B |
| IRC Sec. 1212 | Capital loss carrybacks and carryovers | REG.V.B, TCP.II.A, TCP.IV.B |
| IRC Sec. 1244 | Losses on small business stock | TCP.III.B |
| IRC Sec. 1366 | Pass-thru of items to shareholders | REG.IV.B, REG.V.C, TCP.I.B, TCP.II.B, TCP.III.C |
| Treasury Regulations | REG.II.D, REG.V.A, REG.V.D, REG.V.E, REG.V.F, TCP.II.D |
Is loss limitations also tested outside REG?
Yes. 13 of the 14 sources behind REG.IV.D are also tested in TCP: IRC Sec. 172 (Net operating loss deduction) in TCP.II.A, TCP.III.B; 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. 461 (General rule for taxable year of deduction) in TCP.I.B, TCP.IV.B; IRC Sec. 465 (Deductions limited to amount at risk) in TCP.I.B, TCP.IV.B; IRC Sec. 469 (Passive activity losses and credits limited) in TCP.I.B, TCP.IV.B; IRC Sec. 542 (Definition of personal holding company) in TCP.III.B; IRC Sec. 752 (Treatment of certain liabilities) in TCP.II.C, TCP.III.A, TCP.III.C, TCP.III.D, TCP.IV.A, TCP.IV.B, TCP.IV.C; IRC Sec. 1091 (Loss from wash sales of stock or securities) in TCP.IV.A; IRC Sec. 1211 (Limitation on capital losses) in TCP.IV.B; IRC Sec. 1212 (Capital loss carrybacks and carryovers) in TCP.II.A, TCP.IV.B; IRC Sec. 1244 (Losses on small business stock) in TCP.III.B; IRC Sec. 1366 (Pass-thru of items to shareholders) in TCP.I.B, TCP.II.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 loss limitations tested on the CPA Exam?
Loss limitations is tested on the REG section of the CPA Exam as blueprint group REG.IV.D, in REG Area IV, Federal Taxation of Individuals, which carries 22 to 32% of the section.