S8 Missing info

Tax Topics
1

Hi:
This new client of mine, they never claimed any CCA for the last 2 years since in business because in a loss situation, I was looking at their previous T2, no schedule 8 was prepared.

I am thinking just put down the capital assets in s8 this year, and put down the UCC beginning from last year’s S100. Anyone seen this happened before and have a different work around?

Thanks

2

I’ve seen this before Try to find out if a Schedule 8 was prepared in the past and use these figures as carried forward

3

Look at previous returns if CCA was taken… (you can also access past returns from RAC)

4

This is only the 3rd year of operation for this business, I checked CRA’s NOA, no S8 was prepared on the first 2 years, I guess reason would be they have had huge losses in the first 2 years, so there was no need to claim any CCA, so the S8 was never prepared for the first 2 years

5

It’s always preferable to prepare an S8 wether cca is taken or not. Much easier to capitalized purchases while fresh in the mind

6

That’s what I said to them, and now, instead of amended last 2 T2, if I just prepare this year’s T2, with S8, instead of acquisition, but listed them as UCC beginning.

I just don’t want to have CRA come back and questioned why there was S8 with beginning balance when last 2 years, there was nothing, and asking for support documents and amended the T2s

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7

Have had this occasionally over the years. CRA doesn’t seem to care. They don’t know the history and no one will ask unless they audit anyway.

CCA is a discretionary claim - there is no requirement to claim it (“must” vs “may”), and no requirement to take it in full either. Bring the asset in and depreciate as needed. The only thing that would ever flag it is the failure to deduct the 50% on-acquisition portion.

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8

I think that if the asset was recorded on the GIFI for the previous 2 years, then preparing S8 showing an agreement to the GIFI would be your support for not showing the asset as an addition on this year’s T2.

9

That’s what I am hoping for, didn’t want to charge more to do amendments, but was afraid just adding the S8, will trigger a review or audit, causing more trouble for myself.

Thanks all.