Accelerated CCA for farm statement

825752 · ‎April 20, 2023

A farm statement, has a motor vehicle ( determined that it is not a passenger vehicle), which I think qualifies for the accelerated CCA. When I do this, I override all of the other CCA, and also have limited the CCA on this addition to the net income on the farm statement, as the CCA would otherwise create a loss. This has created a Canada Workers Benefit. Is this correct? The farmer did have employment income but it is less than 20% of his gross farm income, so it is not a restricted loss.

Any advice on whether or not claiming the accelerated rate of CCA would be appreciated, along with clarification on the Canada Workers Benefit. I'm just not sure if creating a loss, or making a larger one by claiming all of the CCA that is possible is right.

Thank you

(sorry - I see that my previous post got cut off)

janisbossenberry · ‎April 21, 2023

The Workers Benefit is available if there is earned income (in your case, the employment income) and if the taxpayer overall has low income. That is not a problem. Also, there are no restrictions on claiming CCA to create or increase a loss on farm income. Claiming the CCA would be beneficial if you have farm income in the last few years that you paid tax on, or if you expect to have positive farm income in the future that you can carry the loss forward to offset. The problem with not claiming it is it does not double the amount you can claim in the next year. So, it all depends on what your tax planning is for this taxpayer.

825752 · ‎April 22, 2023

Ok. Yes, long term, there is the expectation to make a profit. It was a combination of the accelerated CCA, and the creation of the working benefit. I just was not expecting the benefit to be generated, as the taxpayer has had higher employment income in the past. I will check to see if I can carry the loss back too.

Thank you for your prompt response during a busy time!