Ch. 8 Business Income CCA

Question 1

What is Class 1

Answer 1

Buildings (gen), non-residental, m&p facilities

Question 2

Class 8

Answer 2

funitures, fixtures and office equipment

Question 3

10

Answer 3

passenger vehicles costign up to $30,000, delivery cvans and other vehicles

Question 4

10.1

Answer 4

passenger vehicles greater than 30,000

Question 5

12

Answer 5

tools under $500, application software

Question 6

14.1

Answer 6

intnagibel capital assets, incorporation costs in excess of 3000

Question 7

50

Answer 7

computer hardware and systems software

Question 8

53

Answer 8

m&p equipment (AII - 100%

Question 9

13

Answer 9

leasehold improvements

Question 10

14

Answer 10

limited life intangibles

Question 11

17

Answer 11

roads, sidewalks, runways, parking areas

Question 12

44

Answer 12

patents acwuired after 1993

Question 13

When can you begin to claim CCA on buildings?

Answer 13

when it is consdiered to be avaliable for us, or substantially (90% or more) of the building is used for the purpose it is acquired for.

If it is being constructed or renovated, it is avaliable for use at the earlier of the time construction or renovation is complete, or the building is used for the purpose intended.

For public companies - it is when it is avaliable for use and recorded under GAAP

Question 14

When can you claim CCA on vehicles?

Answer 14

When the licences, permits or certiciates required to operate the vehicles have been obtained.

Question 15

What happens if you have a non-length transaction with depreciable property?

Answer 15

It is not avaliable under the accelearated incentive property, and therefore, the half-year rule should apply but if it is owned for not less than a year, then it was used to earn business or poerty income, the half-year rule does not apply.

Question 16

What happens if the selling price is greater than the original cost in a non-arms length depreciable transaction?

Answer 16

UCC is limited, and the gain taxable cpaitla gain is added to UCC.

This results in recapture.

The purpose of this is to prevent CCA claims on a portion of the asset that was tax-free

Question 17

What happens if the selling price is less than the original cost?

Answer 17

Deemed loss would be considered CCA taken. This will result in recapture up to the original capital cost during the sale of the property.

Question 18

What happens if you dispose of depreciable property at a loss to another affiliated person?

Answer 18

The terminal loss is denied, and the transfror is deemed to still own the property with a capital cost equal tot he termianl loss denied. They may continue to deduct CCA until the asset that was transfered is sold.

The transferee is deeemd to have acquired the property at capital cost, and the difference between the capital cost and proceeds is deemed CCA taken.