# employment expenses, include HST?



## joncnca (Jul 12, 2009)

for expenses related to business use (of a vehicle), it seems to me that the for the CCA calculation, you use the price of the vehicles excluding HST. however, when you enter the amount for deductible expenses like fuel, this includes HST...is that right? i'm looking through the guide T4044 but haven't found the answer.

also, for registration cost...let's say you bought a new (preowned) car and the the registration was not itemized...do you use the usual posted registration cost and subtract that from the price of acquisition?

thanks, any insight is appreciated


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## KRIS_KROSS (Jan 28, 2014)

1) Make sure you have a signed Form T2200 from your employer stating that you meet the conditions to deduct your employment expenses.
2) CCA is supposed to include HST and all other costs of the vehicle when acquired (ie. the registration costs). Enter this total amount as additions to CCA, however there is a max of $30k + HST for Class 10.1 vehicles. You will be Class 10 if the total amount of costs < $30k, and Class 10.1 if > $30k + HST. The differences for each class are in Guide T4044.
3) For the HST, enter the amounts including HST on your T777. You can then fill out form GST370 if certain criteria are met. See Chapter 10 of T4044 for a detailed, understandable explanation.


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## joncnca (Jul 12, 2009)

thanks!

what about proceeds of disposition in T777? let's say i sold a car and bought a different one? would the disposition include HST as well? (considering the cost of acquisition would include HST). and if it's the first year claiming, would the undepreciated captial cost at beginning of year also include HST?

let's say i bought a car for 15,000+HST = about $17,000. at the same time, selling an older car for $5000. wold the numbers entered be $17,000 and $5,000, or $17,000 and $5,000+HST (about $5600) including HST in both, even though I personally only received $5000?


another thing, page 21 of guide T4044 says 

"If you owned property for personal use and then started
using it for employment in 2013, there is a change in use.
In most cases when this happens, the amount you will enter
in column 3 is the fair market value of the property."

do i need to add HST onto the fair market value? the guide isn't explicit about including HST, maybe it's such a basic concept that they take it for granted that everyone already knows, but it's a first for me.


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## KRIS_KROSS (Jan 28, 2014)

You should already have the car you sold recorded on your T777 from last year, correct? If so, enter the total amount you sold the car for (approx $5k) in the proceeds of disposition box (Box 4) for this year.
For the car you purchased this year, enter the total amount paid on a separate line (Box 3) for the appropriate CCA class (10 or 10.1 depending on the total value of the car, as described above). This $ amount should be on your receipt of purchase.
If you did not purchase your new car this year, and instead transferred it from personal to business use, you will be required to estimate the FMV of the car (not including HST), and include that in Box 3 as an acquisition. This is because transferring the car from personal to business-use deems a sale for tax purposes. To estimate the FMV, go onto autotrader.com and look up and print off a similar car with similar km and features for support in case CRA questions the $ amount used.


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## joncnca (Jul 12, 2009)

for simplicity, let's say i didn't use my older car for business at the beginning of 2013 (i did way before but that's a whole other discussion). as such, i didn't fill out T777 for 2012 because i didn't claim expenses for business use.

my existing car, i changed from personal to business use, so estimate FMV, and then sell for let's say about $5k. as you said, this would be proceeds of disposition in Box 4. so you're saying that for this FMV estimate, DO NOT include HST? if i receive $5k, the buyer would then need to pay HST on $5k when he registers the car, but I only indicate the $5k and not $5k + HST, right?

for the other car i bought, cost about $17000 including HST, which would go into box 3 for cost of acquisitions...from what i've read, both of these vehicles would be class 10 and not 10.1, so all vehicles in the class are lumped together and not entered on separate lines, as they would be with class 10.1.


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## KRIS_KROSS (Jan 28, 2014)

1) Was your older car entered for CCA on your past T777's? Did you ever dispose of your older car on your T777?
2) For your existing car, you should record the proceeds in Box 4 proceeds of dispositions. The amount should include HST, as you should have charged HST on the sale. If you did not charge HST on the sale, do not include HST in the proceeds amount. You may be assessed by CRA for not charging HST on the sale if they ask you for support for the proceeds, but that's a further discussion.
3) For your new car, you would record the full purchase amount (ie. 17k) on Box 3 cost of acquisitions, on the same Class 10 line.


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## joncnca (Jul 12, 2009)

my older car was used for business a little bit way in the past, but i didn't claim any tax deductions because it was minimal, so did not claim any CCA or fill out T777.

that car was sold in 2013 after actually being used for business. half way through the year, that car was sold privately and another car was purchased at a dealer, where HST was charged (i.e. 17k). 

i didn't charge HST on the private sale of the car, it was my understanding that i would not charge HST and that the new owner would have to pay HST when he registers the vehicle..that's what i've had to do on private purchase of a car...wouldn't people think i was trying to swindle them if i tried to hit them up for another 13%? anyway, i'll put the actual proceeds of disposition without HST in Box 4.


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