# CCA and UCC for Rental Property for co-owners



## MorningCoffee (May 8, 2013)

Hi all,

Lets say husband and wife buy an income property - co-owners, 50-50.

Building costs $100,000

My question: on tax form T776 (statement of real estate), what amount is entered under each co-owner's area B, "New additions" : $50K or $100K ?

Thanks


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## davidjean (Mar 27, 2014)

Should be $50k each.


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## MorningCoffee (May 8, 2013)

Thanks davidjean. We're using Stuidiotax for the first time this year, and claiming CCA for the first time as well. The properties in question were bought several years ago, and Studiotax seems to calculate the CCA properly (area A), but only 50% of the total goes into the actual T776 calculations. But UCC is already half. So now it's 25% each, instead of 50%, so it's wrong.

Anyone know where to find documentation or online examples? I'm only getting the "right" numbers if I enter the entire building value for each person - which I thought was wrong.


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## CPA Candidate (Dec 15, 2013)

I wouldn't depreciate an income property because it's not likely actually depreciating. When you sell you will pay it all back, all at once, in CCA recapture.


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## Davis (Nov 11, 2014)

CPA Candidate said:


> I wouldn't depreciate an income property because it's not likely actually depreciating.


I'm guessing you haven't been a landlord. You wouldn't believe how some tenants can depreciate a rental property. :upset:

When I was a landlord in the 1990s I had to weigh a number of factors: claiming CCA means you deduct from income now, and pay more in capital gains later, so paying less tax later is generally better. You'd have to have a whopping great capital gain to be bumped up in income high enough to have the higher rates offset the earlier tax savings, I think. 

Has anyone done the math recently?


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## balexis (Apr 4, 2009)

Davis: AFAIK, CCA deductions lowers your fully taxable property income now, but at CCA recapture time, it is also treated as property income, not as a capital gain.


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## MorningCoffee (May 8, 2013)

Yes, from my understanding, counts as income at recapture time, not capital gains. So when you sell, you can owe both income taxes on the recapture amount plus capital gains. This article explains it well i think:

http://www.thebluntbeancounter.com/2015/11/should-you-claim-capital-cost-allowance.html


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