I traded in my old business truck for a new one.
-trade in value of old truck was was $24,000.
I entered this Under total proceeds on the class 10 UCC for old truck. (UCC remaining at start of year was $23,500)
- I added the new truck on a new class 10 UCC with purchase value before tax ($57,854)
entered under UCC at beginning of year as well as under purchase price.
When I exit motor vehicle expenses, it takes Over $110,000 off my income. This doesn't seem logical. what am I doing wrong?
Your entry on the old truck uses the lesser of original cost or proceeds, so $24,000 would be correct. Where you went wrong is that you must add the new truck as an addition, not as UCC. You only get half of the 30% class 10 depreciation in the first year, per the half year rule. How much of the vehicle expenses are used is based on your mileage figures. You must put in a beginning mileage and a total of business mileage. Based on the percentage of total mileage for business, the software will come up with a calculation for vehicle expense.
You can't double enter it. It only goes in the additions field at the full purchase price before the trade in. The proceeds from the first truck offset the trade-in on the new truck.
Be aware that if you claimed GST/HST on the original purchase of the old truck, you owe back the difference on the $24,000 before you claim the GST on the new vehicle. It should be listed in the sale agreement.
Your entry on the old truck uses the lesser of original cost or proceeds, so $24,000 would be correct. Where you went wrong is that you must add the new truck as an addition, not as UCC. You only get half of the 30% class 10 depreciation in the first year, per the half year rule. How much of the vehicle expenses are used is based on your mileage figures. You must put in a beginning mileage and a total of business mileage. Based on the percentage of total mileage for business, the software will come up with a calculation for vehicle expense.
You can't double enter it. It only goes in the additions field at the full purchase price before the trade in. The proceeds from the first truck offset the trade-in on the new truck.
Be aware that if you claimed GST/HST on the original purchase of the old truck, you owe back the difference on the $24,000 before you claim the GST on the new vehicle. It should be listed in the sale agreement.
Do I keep the opening balance amount that was carried forward from last year? During the term, I traded in my vehicle for another one. I used the interest paid for the old one for the amount of months I had it then took the interest on the new one for the remainder of the year. So I guess I want to know do I keep the opening balance carried forward, put the new vehicle under additions and the old one under dispositions?