Thanks. As per CRA for Tax Year 2024:
Qualifying and Non-Qualifying Assets
DIEP generally includes all depreciable capital property except for long-lived assets:
- Ineligible Classes: 1 to 6 (buildings, greenhouses), 14.1 (goodwill), 17 (roads/surface construction), 47, 49, and 51 (pipelines and electrical transmission equipment).
- Passenger Vehicles: For vehicles in Class 10.1 (costing over $37,000 before tax in 2024), you can still claim the 100% write-off if they are designated as DIEP, but note that recapture rules will apply upon sale.
Important Rules for 2024
- $1.5 Million Limit: This is an annual limit that must be shared among associated groups of businesses or partnerships.
- Income Limitation: For individuals and partnerships, the DIEP deduction cannot exceed the income earned from the business or property for which the asset is used (it cannot be used to create or increase a loss).
- Prescribed Form: To claim the deduction, you must designate the property as a DIEP on the T2 Schedule 8 (for corporations) or Form T2125 (for individuals).
- What property qualifies for immediate expensing? Designated Immediate Expensing Property (“DIEP”) generally includes all depreciable capital property, other than property included in Capital Cost Allowance (CCA) classes 1 to 6, 14.1, 17, 47, 49 and 51.
- The AII has been extended for qualifying property acquired after December 31, 2024, and available for use before 2030, offering a maximum first-year CCA deduction of 1.5 times the standard rate. This measure effectively suspends the half-year rule for eligible property.
