When to Claim Capital Cost Allowance

By QuickBooks Canada Team

0 min read

Capital cost allowance is a tax deduction you claim over a span of several years for your depreciable property’s cost. This property is a long-term asset that becomes obsolete over time, such as furniture, buildings, or equipment, that you utilize in your professional or business activities. It is illegal to deduct the total cost of depreciable property when you compute your professional or net business income for the year that you bought the property.

Instead, you are able to deduct the total cost of these business properties over the lifetime of the equipment as a capital expense. Keep in mind the differences between current and capital expenses. Unlike capital expenses, current expenses refer to short-term, ordinary maintenance expenses, while capital expenses add considerable value in relation to property.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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