closing a small business as of Dec 31, 2023. Have left over cca for truck and tools. keeping both all items and not selling. Will use for personal use now. what do I do with cca. They are in class 8 and 10.
Do I click no assets left in this class? There are no proceeds to report?
I want to make sure I get this right before fililng
For business closures, please direct your questions to the Canada Revenue Agency (CRA) by calling them at 1-800-959-8281 for clarifications.
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I know how to close business and all the proper forms. I just want to know what to do with cca in turbo tax?
Do I click no assets in this class. What is that button used for?
If you retain some of the capital assets, you will no longer be able to claim CCA in a subsequent year unless it is used to earn income from a business or property. You can say NO, if you wish, as you won't be able to use it in the future if you don't have the business asset to go with the CCA.
Thank you for choosing TurboTax.
If I select no assets in this class, the turbo tax system then generates a terminal loss. But is that correct when we are keeping the assets for personal use?
As you are choosing to use them for personal use your next steps are better dictated and clarified by the Canada Revenue Agency as we do not give business advice.
Thank you for choosing TurboTax.
Im not asking for business advice, I just asking if I choose No to "No assets in this class" and the CCA is reduced to zero, the system generates a terminal loss. Is this correct in the software?
If you had no assets left in the class, then you would check off that you had "No assets in this class". That will close the asset pool and give you a terminal loss or recapture, whichever applies.
But I do have assets in that class but they are now going to be used as personal use since the business is closing effective Dec 31, 2023. I have checked the box that this is the last year of business.
For example lets say I have 9000 in class 10 and 3000 in class 8. We have not sold these assets. Were just closing the business and will keep those assets. Do I have to enter a disposition at fair market value?
If you are closing the business, then you have to empty out your CCA classes. And, yes you would do this by disposing of the assets at fair market value (FMV).
Sorry every answer deems another question. Sorry about that but bear with me.
Do I clear out these assets at fair market value this year (final year of business) or next year after business is closed?
If 2023 was your final year in business, then you would dispose of the assets on your 2023 tax return.