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Impairment of eligible capital property - CCA 14.1 - goodwill and customer lists

Hello,
I have a client that has lost a fair amount of clients during the pandemic in a business he acquired a few years ago.

I read on taxtips.ca that you can claim an impairment on Schedule 8. How does one calculate the impairment charge (lost sales?)

would you also put the entry into Column 5 (adjustments and transfers).

How also doe the application of Section 80 work ?

Kind Regads,
Gerry A.

@BlueCanyonCPA
Assuming your client is a corporation? Schedule 8 on a T1 is for CPP overpayments
Assuming your client wants to report a Goodwill impairment? Not sure if you’re considering an impairment of fixed assets, but in any case, impairment losses are not tax deductible until the asset is sold. If the asset is Goodwill, your client may be stuck with it until the business itself is sold. See this for reference:

I can’t find anything on taxtips.ca saying you can claim an impairment loss on T2 S8. Can you provide a link to that?

If you’re just asking how to report it in TaxCycle, I think (see bottom of page, where you report Additions/Dispositions - note this has no tax effect):


I would not use Column 5 - that is for assets transferred via Section 85, etc.

Section 80 is the rules re: forgiven debts. That is, if your client owed a supplier, and the supplier wrote off the amount so your client no longer has to pay it, how do you report it for tax purposes? You don’t always have to report it as income - if it relates to an asset, the asset cost can be reduced. This could relate to your client’s situation if he/she has not yet fully paid the original business owner, and that person is willing to write off some of the outstanding amount.

thank you. this helps