# Deposit on leased vehicle **URL:** \ **Category:** Tax Topics\ **Created:** [March 9, 2024, 7:34pm UTC](https://www.protaxcommunity.com/t/deposit-on-leased-vehicle/7998 "2024-03-09T19:34:11Z")\ **Posts on this page:** 3\ **Page:** 1
**Author:** ![gerry](https://avatars.discourse-cdn.com/v4/letter/g/c77e96/32.png) [@gerry](https://www.protaxcommunity.com/u/gerry)\ **Post date:** [March 9, 2024, 7:34pm UTC](https://www.protaxcommunity.com/t/deposit-on-leased-vehicle/7998/1 "2024-03-09T19:34:11Z")
My client has a proprietorship. He purchased a vehicle in 2022. The vehicle was traded in in 2023 against a leased vehicle. I will claim the sale and the offsetting recapture in 2023. He uses his vehicle 95% in the business What I’m not clear on is the deposit against the leased vehicle. Do I capitalize it and take CCA on this amount? I FOUND THE INFO ON THIS. Setup prepaid lease expense. I also noticed that there is no HST on the lease payment. Why would that be? TIA Gerry ---
**Author:** ![Arliss](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/arliss/32/52_2.png) [@Arliss](https://www.protaxcommunity.com/u/Arliss)\ **Post date:** [March 10, 2024, 3:00am UTC](https://www.protaxcommunity.com/t/deposit-on-leased-vehicle/7998/2 "2024-03-10T03:00:22Z")
I usually prorate the expensing of the deposit over the length of the lease. ---
**Author:** ![Rein](https://sea2.discourse-cdn.com/flex016/user_avatar/www.protaxcommunity.com/rein/32/1083_2.png) [@Rein](https://www.protaxcommunity.com/u/Rein)\ **Post date:** [March 10, 2024, 3:21am UTC](https://www.protaxcommunity.com/t/deposit-on-leased-vehicle/7998/3 "2024-03-10T03:21:08Z")
A vehicle lease deposit is usually made up off several things: First payment Permit fees Administration fees Registration fee Lease reduction charge [potentially]. The lease reduction charge should be prorated over the length of the lease. The first lease payment should have HST in it. Look for the HST number. I would claim it if the HST number is on the lease contract. I have never seen HST on the reduction charge. Not sure why. I therefore don’t claim it. Would love to know what others have seen.