CCA on class 10.1 vehicle upon disposition

Forum|Forum|2 years ago
August 23, 2023
1 reply
5 views

I have a client who has a business - so am using T2125 and the automotive expenses form. In 2021, he had a vehicle that was entered into Class 10.1 at $ 31,500. ($30,000+GST in Alberta) In 2022, he had an accident and his vehicle was a write off. He uses it 50% for business. He replaced this with another vehicle, that I have entered at $35,700 ($34,000+GST). My problem is that how do you determine the disposal value? He actually paid over $50,000 new and he received that much for it. Is it disposed of at UCC?

Thanks

ProFile (Canada)

This topic has been closed for replies.

J

janisbossenberry

Level 7

There is no recapture or terminal loss on a Class 10.1 vehicle so it really doesn't matter much. You record it at the lower of proceeds and cost, so just put the original cost in for the proceeds on disposal.

8

825752Author

Level 3

Thank you. That's what I did. I knew there was no recapture or terminal loss. I guess I was thinking of it from a bookkeeping point of view, where it is all capitalized and amortized, forgeting that the tax treatment is different, much like 50% of meals is only allowed for tax purposes.

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded