CPA REG: Book-tax differences and C corporations
Blueprint V.A, V.B · Area V, Federal Taxation of Entities · 23–33% of REG
Ten REG questions on book-tax differences and c corporations, untimed, with a reason for every answer option.
Or take the full REG mock examCorvus Corp. owns 30% of the stock of Delta Inc., a domestic corporation, and received a $100,000 dividend from Delta. Assuming the taxable income limitation does not apply, what is Corvus's dividends received deduction?
Book-tax differences and C corporations on CPA REG
Area V of REG (23–33%) covers federal taxation of entities. For C corporations, expect book-tax differences (Schedule M-1), the dividends received deduction, limits on deductions, distributions and earnings and profits.
- Blueprint groups
- V.A, V.B
- Share of the section
- Area V, Federal Taxation of Entities: 23–33%
- Our drill
- 10 questions from 12 on this topic, untimed, with a reason for every option; one free attempt, unlimited with a pass
What to know
- C corporations pay a flat 21% rate (IRC §11).
- The dividends received deduction is 50% (under 20% owned), 65% (20% to under 80%) or 100% (80% or more), subject to the taxable income limit (IRC §243).
- Schedule M-1 adds back federal income tax expense, nondeductible fines, key-person premiums and the nondeductible half of meals, and subtracts tax-exempt interest.
- Corporate capital losses offset only capital gains, with a 3-year carryback and 5-year carryforward.
- Up to $5,000 of organizational costs are deducted in the first year, reduced dollar for dollar above $50,000, with the rest amortized over 180 months (IRC §248).
- Distributions are dividends to the extent of E&P, then a tax-free return of basis, then capital gain (IRC §301).
Test yourself on book-tax differences and c corporations
Ten REG questions on book-tax differences and c corporations, untimed, with a reason for every answer option.
Or take the full REG mock examCommon questions
How much of the REG section is book-tax differences and c corporations?
It sits in Blueprint Area V (V.A, V.B). The AICPA weights whole areas, not single topics; see the area’s range on the REG page. Our 72-question mock draws each area at the middle of its range.
Are these real REG questions?
No. The AICPA does not release live exam questions. These are original practice questions written to the published 2027 CPA Exam Blueprints, with a reason for every answer option and the standard or code section behind the key.
More REG topics
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- Business law: agency, contracts, debtor-creditor, federal law and business structuresdrill
- Basis, cost recovery and property transactionsdrill
- Individual gross income and pass-through itemsdrill
- Individual deductions, loss limits, filing status and creditsdrill
- S corporations, partnerships, LLCs and exempt organizationsdrill
REG full mock exam: 4 hours, 5 testletsREG task-based simulations
Blueprint and exam facts checked November 2026: AICPA: Learn what is tested on the CPA Exam (Blueprints effective January 1, 2027) · AICPA: CPA Exam score release and testing windows · NASBA: CPA Exam FAQ · Virginia Board of Accountancy: CPA Exam fees.
Original independent practice questions written to the AICPA CPA Exam Blueprints. Not affiliated with or endorsed by the AICPA or NASBA.