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posted May 5, 2021 10:13:02 PM

Looking to confirm if I have entered a new capital cost allowance expense correctly.

Entered a Class 1 expense at $5776 which resulted in a Base amount of $2888 and CCA for Year at $0. Thought it should be $115 using 50% rule for first  year?

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Level 6
May 6, 2021 10:08:10 AM

Thank you for choosing TurboTax,

 

With the Accelerated Investment Incentive, the existing Capital Cost Allowance (CCA) half-year rule is suspended. The Accelerated Investment Incentive (AII) will be applied to your Class 1 addition. 

 

If there is no Undepreciated Capital Cost (UCC) balance in Class 1. You added a new investment to Class 1 of $ 5,776.

You then add 1/2 of the net addition to your first cost to reach the CCA base of $8,664 ($5,776 + $ 2,888 = $8,664) 

If your class 1 CCA rate is 4%,  when you multiply 8,664 by 4%, you will get the number $519,9.

 

More information on the Accelerated Investment Incentive can be found in these links:

CRA - Accelerated Investment Incentive

TurboTax - Accelerated Investment Incentive