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Schedule 8 - Assets Acquired After Nov 20, 2018

I have had 2 phone calls now from the CRA in Sudbury asking me to verify my CCA calculations with them. I didn’t pay much attention to the first call, I provided the CRA rep the asset additions before and after November 20th, re-checked the calculation of CCA and they said that was fine, the T2 would be assessed as filed…

This happened for a second time today, which prompted me to ask the CSR why they are calling about CCA calculations. It seems they have no way of determining the asset additions prior to November 21st and the value of asset additions made after November 20th. The guy said he just took the opening ucc balance, half the additions, and applied the normal rate, which made the actual CCA claim on the Schedule 8 appear higher than the maximum permitted. Once I went over the dates and numbers with the guy he said it was all fine and the T2 would be assessed as filed.

I asked whether this was a limitation with the tax preparation software or with CRA’s system and he couldn’t answer that… either because he was not permitted to tell me or more ikely because he just didn’t know.

Anyway, just thought I would share my experience that CRA has phoned twice now to go over CCA calculations on T2 returns where assets have been purchased after November 20th, and CCA has been calculated in accordance with AIIP. So far, you would need to have a December 2018 corporate year end or later to have AIIP. Both of my clients had January 2019 year ends and both had asset purchases after November 20th.

Either TaxCycle is not segregating and transmitting the pre and post November 20th asset additions or CRA’s system has no way of being able to determine the value of asset additions that qualify for the AIIP. The guy said all he can see is the “total additions for the year”.

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@snoplowguy

Another customer told us that they are going thru the same thing. As soon as the November 2018 federal economic update was announced, we were hounding the CRA about the revised Schedule 8.

We waited and waited for an early draft of schedule 8 which became available to us very late so the CRA gave us the ok to simply revise the CCA calculation on our own even though there was no way for the CRA to verify post Nov 20/19 additions. So, to do this, we had to do a dramatic calc update and facelift to TaxCycle’s S8Asset. (same goes for T1, T3 and T5013 modules)

The next T2 this month or early next month will have the updated Schedule 8.

If you have any further questions, please let me know.

Steven

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