Capital cost for CCA

groobi · ‎April 30, 2021

I'm confused about capital cost addition.

1. If I purchase a rental property (real estate) with a mortgage, I can claim CCA on the total purchase price

since the title has passed to me, correct?

2. What if I purchase an equipment with financing (Total purchase price=$100,000, down payment=$40,000,

Monthly payments=$5,000)? Should I add whatever I have actually paid to capital cost or total purchase

price of $100,000?

Hasib-Ullah · ‎May 01, 2021

Take CCA on $100k, make sure to uncheck the acceleration of CCA, profile has acceleration checked by default. Don't miss out the interest on the financing portion.

dogilvie89 · ‎May 02, 2021

NEVER depreciate a building--going to get this guy stuck huge on Capital gains

Hasib-Ullah · ‎May 02, 2021

For some of my clients claiming CCA is the best options when considering CCB and income tested benefits. Yes, at some point there will be huge recapture but then we can have the client contribute heavily into RRSP that year.

dogilvie89 · ‎May 02, 2021

glad you are not doing my Taxes :)

Hasib-Ullah · ‎May 02, 2021

I pray you have better understanding of CCA and also glad I didn't go to the same school as you did.

groobi · ‎May 02, 2021

Thank you but where can I find the info about acceleration? I reviewed the restrictions of the acceleration

but couldn't find relevant info

groobi · ‎May 02, 2021

Hasib, I appreciate your input. What can't I claim acceleration for the equipment purchase?

This is not a rental property nor a rollover transaction.

Hasib-Ullah · ‎May 03, 2021

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partners...

groobi · ‎May 03, 2021

I already reviewed the contents but couldn't find the relevant info. Could you be more specific?