How do I determine UCC for my vehicle?

[lelosole]

What is UCC and how do I determineif I can claim it?

[TurboTaxKim · Accepted solution]

If you have claimed Capital Cost Allowance (CCA) in the past on your vehicle used for Business or Employment, you will have a number left at the end of the year known as Undepreciated Capital Cost or UCC. 

If this is your first time claiming CCA on that vehicle, you will not have a UCC amount. UCC is the balance of the capital cost left for further depreciation at any given time. 

For example, if you claimed the full 30% CCA on a $10,000 vehicle last year, your UCC would be $7,000 

( $10,000 - $3,000 = $7,000 UCC)

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-re...

[sparkfire9]

hi, i started with Uber June 2019. I have a car loan Nov 2018. From Nov 2018 to May 2019, the car was for personal use. What will |I put in UCC? tubo tax does not accept if I do not put an amount. thanks.

[TurboTaxKim]

@sparkfire,

As you only started using your car for business purposes in June 2019, you will not have a UCC amount. Instead, you need to add your vehicle as a "new addition" The reason for this is in the first year you claim Capital Cost Allowance (CCA or depreciation) on this vehicle, you fall under the "half-year rule" and can only claim 50% of the allowable CCA. But don't worry, TurboTax will calculate these amounts for you based on your entries!

For a vehicle you owned prior to starting your business or using it for business purposes, you'll have to make a reasonable estimate of the Fair Market Value (FMV) of your vehicle on the date you started using it for Business or Employment use (June 2019).

You could get a fairly accurate calculation by using the actual purchase price - minus - the amount you could have claimed for CCA if you had used it starting on the purchase date. Or you could compare the selling price of similar vehicles. 

Example for a  $29,000 vehicle purchased in 2018:

$29,000 x 15% (half year rule) = $4,350 (this is the amount you could have claimed)

$29,000 - 4,350 = $24,650 Use this figure as the cost of your "addition". If you were questioned by CRA as to how you came up with this figure, you would be able to show them you used this method of calculation and considered it to be reasonable. 

[sparkfire9]

Hello TurboTax Kim,

Thank you the response. When you say "new addition" is this, add  a vehicle, the Capital Cost Allowance Chart for Vehicle:

Date vehicle acquired: (dd/mm/yyyy) I will put 01/01/2019

if you purchased the vehicle during the year, enter the total cost before taxes= ???which is correct below A or B

computation A: (including hst)x.15=4746. next [social security number removed]= 27254

computation B: 28000(excluding hst or total vehicle price/MSRP) x .15=4200, next [social security number removed]=223800

also, is there a fee to be a member of turbo tax community? like posting here.

thanks, sparkfire

[Hugger]

Hi there, 

I'm confused on the UCC calculation with respect to the CCA from the previous year. It says online that the UCC is the following: 

The amounts left on your assets for further depreciation.

If this is your first year of claiming Capital Cost Allowance on an asset, you won’t need to enter any amount.

Your undepreciated capital cost (UCC) is your running balance for each capital cost allowance (CCA) class from last year.

You can find this info on last year's return, or, if you transfered your TurboTax return from last year into this year's return, this amount will already be filled in for you.

So in 2018, I bought a new car at the beginning of the year for $22,000.  I used my car 42% of the time for work purposes. The rest of the time for personal purposes. On my 2018 return i claimed the class 10 with a 30% rate. 

Turbo tax said that my CCA for the 2018 was about $1600. 

For my 2019 tax return,  i'm confused on what to enter in for the UCC? Can you help me? 

[sadat67d]

I bought my car in 28 September, 2018 and filed tax with Professional accountant in 2018. I purchased my car @ 11300 dollars. I gave him my purchase price and I think he put CCA as 11,300 CAD. I did not get UCC value from him this year. I started UBER from 11 November, 2018. How much UCC I should put at the begining of this year? 

[TurboTaxNicola]

Assuming your accountant claimed 15% your UCC balance at the start of the year would be 9605. As CCA is an optional claim if your accountant did not claim your UCC would be 11300.

We hope the above brought clarity to the matter.

[atrinh]

Hi TurboTaxKim, 

What if I skipped CCA for a year or two. How do I figure out the new UCC for the current tax year?  Thanks so much in advance! 

[Doove]

Hello @TurboTaxKim , 

It looks like my situation is slightly different from the other ppl in this question thread... 

I'm trying to establish my UCC under these parameters : 

1. Purchased new personal vehicle (A) in 2018.

2. Changed employment and used vehicle A for business use for the first 3 months of that new employment (Sept, Oct, Nov 2019)

3. On December 1, 2019, I leased Vehicle B, and will use the lease payments system instead of the CCA depreciation from then on.

Questions : 

1. How do I establish the initial (Fair Value / UCC) of Vehicle A starting Sept 2019?  I know there's a maximum of $30,000 starting value, and since this is the first year I'm utilizing the CCA, can I still use the max start value? 

Or should I apply the depreciation for 2018, and take the lower amount as a starting point in 2019?

Vehicle A retailed for approximately $60K in 2018.  
Example 1 : $30,000 *.3(for 2018) = $21,000 UCC for 2019 ?

Example 2 : $30,000 UCC for 2019 ?

2. Since I only used Vehicle A for 3 months, do I use the half-year rule ?   or half of the Half-year rule % ?

3. In December, when I leased Vehicle B, I kept Vehicle A as a personal vehicle(Did not sell asset).  How do I enter that in TurboTax ? 

Thank you in advance !

Cheers,