You would still use Class 8,
except that there would only be one asset in that class.
Since Class 8 is such a broad
class, you will often have more than one asset in that class pool. Some of
these items may last a long time (ex: furniture), while others may be replaced
only after a couple of years (ex: electronics, tools that wear down). So if you
have everything in Class 8, the stuff that’s expensive but is replaced often will
be taken out of the class, but since there are other items in the class, you
won’t be able to take a terminal loss on the item. If you put the $1000+ asset
in its own Class 8, when you dispose of the item, you can get a terminal loss because
there will be nothing left in the class.
Ex: Lou buys a $1000+ tool that wears
out and must be replaced every year, so he puts it in Class 8 pool that is
separate from the one that his other assets are in. Two years from now, Lou
needs to get a new tool, and sells the old one as scrap metal for $50. If Lou
had put the tool in the same Class 8 pool as everything else, he would have
only gotten to deduct the CCA he tool for two years on that item, and that’s
it. But because he put the tool in a separate Class 8, he can also deduct a
terminal loss when the item is disposed of, which he could not have done if
there had been other assets in the class.
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