Hi, my corporation client purchased an electric vehicle and received iZEV federal incentive. I know that businesses cannot benefit from an enhanced first-year CCA on the purchase of an eligible ZEV if government assistance is received. But can I still put the vehicle in the CCA class 54 not taking enhanced CCA? Capital limit for CCA class is $61k, higher than CCA class 10.1. More tax saving to use CCA class 54. Can anyone share experience?
Thanks!
Class 54 is specifically for ZEVs (see below), so IMHO it would not be appropriate to put one in class 10.1. CCA is a discretionary deduction, so there is no requirement to claim the maximum allowed. You can always claim LESS than the maximum CCA. If the iZEV incentive specifically limits the first year enhanced CCA, simply claim the “normal” CCA (i.e. reduce the amount as necessary on the S8 and/or S8Asset forms).
Hi Nezzer,
I am wondering if you could also help me out with this.
The client purchased a Tesla for iZEV credit of $5,000 in the purchase agreement. Should I treat this credit as a cost deduction to the CCA claim or I should include it as other income for the year purchase and claim the full purchase price without credit?
Thank you very much for you kind help in this issue.
I don’t know the rules for the iZEV credit. I’m sure you could look them up. But, usually such government rebates are required to be recorded as a reduction of the capital cost.
Thank you very much!
How to record the excess UCC on the disposition of Class 10.1 Undepreciated vehicle in the second year of its purchase? Class 10.1 does not allow any Terminal Loss/Recapture. In this case, there is a loss of about $6,000 after deducting the 15% CCA and the disposition price. No CCA was claimed in 2022 as the corporation had a Net Loss.
The Class 10.1 vehicle was replaced the same year of Disposition with another Class 10.1 vehicle. My understanding is Class 10.1 is eligible for 100% immediate depreciation.
Thanks.
You can’t deduct terminal losses on class 10.1. Terminal losses and recapture don’t apply to Class 10.1 (see link below). However, you can still record CCA in the year of disposition.
What to do with the Ending UCC remaining after deducting disposition as well as 15% CCA from the beginning UCC amount.
And also how to take the class 10.1 asset off the balance sheet on its disposal? It is recorded 34,000 only for 2022 CCA purpose in Class 10.1 whereas in the fixed assets it is 55000 ( actual value). Was not depreciated in 2022- so nothing from Accumulated Depreciation for it.
Balance sheet for accounting purposes doesn’t have to match the T2 - that’s a basic accounting concept. Record the disposal as per the facts:
For financials - remove the asset cost and accum. amortization, apply the amount of any proceeds received, and the difference is gain/loss on disposal.
For tax reporting (in TaxCycle) - record the disposition on the S8Asset sheet:
