# Home Business - CCA (Capital Cost Allowances)



## A320 (Sep 15, 2010)

Hey everyone, 

So I'm knee deep into my tax preparations and could use some insight. I have a fairly new business out of my home (last year was my first filing and I hired an accountant). This year I am tackling it on my own. My questions pertain to CCA's vs 'Business Expenses'. Last years filing was pretty simple (for the home business) as there were only 2 months of operation to file for (started late 2012). I recall my accountant asking me to compile a list of already possessed equipment that would be used for the business and bring it this year.

I'm assuming that I would be able to claim this already possessed equipment for my 2013 filing but wanted to ensure that I was doing it correctly. I have searched the forum, read numerous posts and have also referenced the CRA info here:

Classes of depreciable property - http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/cptl/dprcbl-eng.html
Personal use of property - http://www.cra-arc.gc.ca/tx/bsnss/tpcs/slprtnr/rprtng/cptl/prsnl-eng.html

So essentially my business is in electronic repairs. The majority of my work is in smartphone/tablet repairs and video game console repairs. *It is a sole-proprietorship.*

As an example I have an older TV that has been residing in my basement unused. Since the inception of my business I have setup a dedicated shop area in my home and am now utilizing this TV as test TV for handling all the video electronics I repair (game consoles and other video output devices). Am I assuming correctly that this TV would be a CCA?

I am using Ufile.ca (used them in the past). Below is a snapshot of the associated section:



Am I really only concerned with the first 5 lines in this case? Would this be a claim I only make once this year or do I continue to carry this forward until I replace or dispose of this TV?

Also for future reference where can I find a concise reference that clearly differentiates CCA'a vs Business Expenses?

Thanks everyone.


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## My Own Advisor (Sep 24, 2012)

Not a tax expert but if older TV, not sure you can count that as a depreciated asset. 

If you bought a TV within a last calendar year (2013), likely a different story.

You might want to call the small-business toll-free CRA number to discuss your issue with a tax associate at CRA.


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## OptsyEagle (Nov 29, 2009)

The way CRA depreciates an asset is to take the purchase price and subtract a percentage off that price for every year that has gone by the date of purchase, on a declining balance to come up with the fair market value for 2013.

For example. If the TV cost you $400 in 1997. That would be 15 years to the beginning of 2013. So on a declining balance we subtract 20%, each year. In 2013 the FMV of that TV is $14.07 (probably a little more then you could get for it on Kijiji).

Now you would take the $14.07 and multiply that by 20% and get $2.81. Since it is your first year of business CRA gives you 50% of that for a deduction. In this case $1.41. The undepreciated capital cost remaining for 2014 would be $12.66.

Obviously you can see here that unless you paid $4,000 for the TV or is was bought in the last 4 or 5 years, it probably is not worth your time to declare it as anything.


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## A320 (Sep 15, 2010)

Thanks for the info. So the percentages associated with the various classes are *annual depreciation rates* then. I can quickly see how some assets aren't worth the time inputting. I would say the most important one I have to file is my laptop that was specifically purchased for my business but it was purchased after Feb/2011 so from what I have read, if I understand correctly, I can only file it is a class 50 (vs 52) at 55% (vs 100%). And again, in these examples, would I simply just fill out the top 5 lines and ignore the rest? I could see where the additional fields are important for something that actually increases in value but otherwise these are simple claims.


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