Assuming this is for someone who is self-employed, your car is a fixed asset that depreciates over time, your protection package can depreciate but it is not at the same rates. Considering fixed assets follow the CCA Class system, which is a system made by the Canada Revenue Agency (CRA) to accurately claim amounts for assets that have long-lived depreciation. Therefore, you would list your car purchase as a fixed asset probably as a Class 10 CCA deduction; which depreciates at a rate of 30%. For information on CCA Class Rates: Canada Revenue Agency (CRA) - CCA Classes of Depreciable Property
For the protection package, that will simply be an expense that you deduct against your income. According to the Canada Revenue Agency (CRA) the expense will be under "Motor Vehicle Expenses (Not including CCA)" For more information: Canada Revenue Agency (CRA) - Motor Vehicle Expenses
Thank you for choosing TurboTax.
Sign In
Canada (English)
EN
