Claiming equipment cost
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Thread: Claiming equipment cost

  1. #1
    Junior Member
    Join Date
    May 2017

    Claiming equipment cost

    I have a solo entertainment act that I started last year. I use some equipment (e.g. guitar, pa system) that I already owned and some that I bought specifically for this purpose. Some of it was purchased used but even for the equipment that I bought new, I don't have all of the receipts. The cost overall was significant compared to the income so far. Some of this equipment is also use for other purposes so I can only charge a % of the value for those items to this business.

    Can I use a reasonable estimate of the cost / value when I first got started and depreciate the cost based on that? Is there some other approach that is better (but realistic given the situation)?

  2. #2
    Senior Member
    Join Date
    May 2009
    A. You need to learn to keep receipts. I'm afraid I don't have an answer on how you can value your equipment in a way that would satisfy CRA if you have no proof of purchase. Perhaps some other posters know.

    B. Technically, you don't deduct the cost of equipment. You deduct depreciation or Capital Cost Allowance, which is a specified portion of the value, per year. There is some equipment, such as hand tools, with a 100% CCA rate, so the cost can be deducted in one year. But musical instruments, for example, have a maximum CCA of 20%.

    C. Learning the ins and outs of bookkeeping for a small self-employment business is not easy, yet it can be hard to justify the cost of a bookkeeper/accountant on minimal income. Read the CRA guides on the subject; see if there is a course you can take at your local college; or pay someone to do it to get you started in the right direction.

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