CCA on class 10.1 vehicle upon disposition

825752 · ‎August 22, 2023

I have a client who has a business - so am using T2125 and the automotive expenses form. In 2021, he had a vehicle that was entered into Class 10.1 at $ 31,500. ($30,000+GST in Alberta) In 2022, he had an accident and his vehicle was a write off. He uses it 50% for business. He replaced this with another vehicle, that I have entered at $35,700 ($34,000+GST). My problem is that how do you determine the disposal value? He actually paid over $50,000 new and he received that much for it. Is it disposed of at UCC?

Thanks

janisbossenberry · ‎September 12, 2023

There is no recapture or terminal loss on a Class 10.1 vehicle so it really doesn't matter much. You record it at the lower of proceeds and cost, so just put the original cost in for the proceeds on disposal.

825752 · ‎September 12, 2023

Thank you. That's what I did. I knew there was no recapture or terminal loss. I guess I was thinking of it from a bookkeeping point of view, where it is all capitalized and amortized, forgeting that the tax treatment is different, much like 50% of meals is only allowed for tax purposes.