Weekly Tax Tips
Purchase Assets Eligible for CCA Before Year-End
2 Oct 2009
Employment Income - Employees are entitled to claim tax depreciation called Capital Cost Allowance (CCA) on only three types of assets — automobiles, aircraft and musical instruments — if conditions are met. If you’re entitled to deduct CCA and you’re considering purchasing a new asset, you should do so prior to the end of the year. This will accelerate CCA claims by one year. The asset must actually be available for your use to qualify for a CCA claim. In addition, tradespersons can qualify for a tax deduction of up to $500 for eligible tools they purchase, and a deduction for tools purchased by qualified apprentices is also available. There are conditions that must be met for both deductions.
Business Income - If you are carrying on a business and are planning to purchase capital assets for your business in the near future, consider doing so before the end of your fiscal year. If the assets are acquired and in use before year-end, you can claim one-half the usual CCA rate. Even if you’re in a loss position this year, purchasing the asset now will allow a full year’s CCA claim next year. Bear in mind that title to the asset must be acquired and it must be available for use in order to claim CCA.
This tax tip is a publication of BDO Dunwoody LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of 2 Oct 2009.
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