CPA Tax Module 2026/2027 | 40+ Questions & Answers | CCA, Capital Gains, Taxable Income, Dividends & Property

This CPA Tax Module 2026/2027 study guide contains 40+ exam questions and correct answers covering core Canadian taxation concepts relevant to CPA tax preparation. Across 9 pages, the document concentrates on taxable income calculations, Income Tax Act divisions, employment and property income, Capital Cost Allowance (CCA), capital gains and losses, dividends, the Principal Residence Exemption (PRE), superficial losses, capital gains reserves and personal-use property. The question-and-answer format makes the material suitable for rapid exam revision and testing of technical tax rules. The opening section examines the important distinction between capital property and inventory, explaining how a taxpayer's primary and secondary intentions can influence whether a disposition generates a capital gain or business income. It identifies practical factors used when assessing intention, including the relationship of a transaction to the taxpayer's business, the nature of the asset, transaction frequency, period of ownership, feasibility of the stated intention and the extent to which that intention was actually carried out. The document provides a structured review of taxable income and the Income Tax Act framework. Students work through the calculation of Division B net income and Division C taxable income while reviewing employment, business, property and other income, taxable capital gains, allowable capital losses, ABILs and other deductions. It also distinguishes the functions of Divisions A, B, C and E and identifies the Income Tax Regulations as a source for prescribed rates and CCA information. A particularly detailed portion covers Capital Cost Allowance, making the guide useful for candidates who need to memorize or distinguish major CCA classes. The material discusses Classes 1, 3, 8, 10, 10.1, 12, 13, 14, 14.1, 17, 43.1, 43.2, 44, 50 and 53, alongside available-for-use rules and assets maintained in separate CCA classes. It also addresses tax adjustments involving CCA, recapture, terminal losses, amortization, financing expenses, reserves, contingent liabilities, warranties, unpaid remuneration and non-deductible meals and entertainment. The investment and property-income section reviews eligible and non-eligible Canadian dividends, capital dividends and foreign dividends, together with carrying charges, soft costs and interest deductions associated with income-producing property. Students also review the calculation of capital gains and losses using proceeds of disposition, adjusted cost base and disposition expenses, as well as the moving weighted-average approach for determining the ACB of identical properties. Capital-property planning receives additional attention through superficial losses, capital gains reserves and the Principal Residence Exemption. The document explains the PRE formula and how designation decisions may be approached when a taxpayer owns two properties. It also identifies events that can cause a deemed disposition, including a change in property use, death, ceasing Canadian residency and gifting property. The final portion covers Personal-Use Property (PUP) and Listed Personal Property (LPP), including minimum cost/proceeds rules and the treatment of gains and losses. It also discusses the interaction between a terminal loss on a building and a capital gain on the associated land, convention-expense deductions, the tax treatment of dividends and the stage at which tax credits are applied. These topics make the resource useful for candidates who need a concise but technically broad review of Canadian income and property taxation. Relevant students: This document is most relevant for CPA PEP Taxation candidates, Canadian CPA students, accounting and taxation students, public accounting trainees, junior tax professionals and learners preparing for Canadian income-tax examinations. It is particularly useful for students reviewing CCA classes, taxable-income calculations, capital versus income treatment, capital gains and losses, dividend taxation, property income, PRE, PUP/LPP and common accounting-to-tax adjustments. 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