Shouldn't the half-year rule for CCA be based on the net cost (after adjustments)?

[chris54]

I have computer equipment purchased for $4,861, which includes $231 GST (which will come back as an ITC). So I have $4,861 on line 2, and $231 on line 4 "ITC".

On the T2 S8Class form, TurboTax calculates the subtotal (line 6) as $4,630, and the 50% rule (line 7) as $2,431. Line 6 is good, but I'm confused as to line 7. TurboTax is calculating the 50% rule on the _total_ cost of acquisitions, but the form clearly states to calculate it based on the _net_ cost of acquisitions:

Column 7 on the form says "50% rule...see note 3 below"

And note 3 on the form says: "The net cost of acquisitions is the cost of acquisitions (column 3) plus or minus certain adjustments and transfers from column 4"

Source: http://www.cra-arc.gc.ca/E/pbg/tf/t2sch8/t2sch8-14e.pdf).

Isn't this a bug, then?

[Delphision · Accepted solution]

If you are registered for GST, you should not input the GST at all.  The addition should be $4,630 / 2 = 2,315 x 55% = $1,273.25.