Employment expenses - Two vehicles - Class 10.1You have changed your vehicle in the tax year, and both vehicles - the old and the new - are in Class 10.1, i.e. cars whose value exceeds $30,000 before taxes.
You must enter expenses for each vehicle separately, according to the CRA rules.
Regarding the vehicle that you owned at the beginning of the tax year, you must enter its "Opening balance of the undepreciated capital cost", its category; the total number of kilometers (KM) traveled in the tax year, as well as the number of kilometers traveled for business purposes, until the time of the sale of this vehicle. The same will apply for all the expenses, such as fuel costs, insurance premiums and others. To do so, follow the steps below:
1-On the "Left side menu on the Interview tab", select "Interview setup" item and in the right-hand page that is generated, go to the "Employment and other benefits" group, check the box for "Employment expenses" and click on "Next" at the bottom of the page.
2- Return to the "Left side menu on the Interview tab" and select the item "Employment expenses" and on the page on the right-hand side, select the type of job expenses that applies to your situation.
3- Complete the page "Employment expenses" according to the information you have. Click on "Next" at the bottom of the page after you've completed the page.
4- On the page entitled "Motor vehicle expenses" click the plus sign "+" icon to the right of the line "Purchased motor vehicle", enter the information for your first vehicle, Including the "Opening balance of the undepreciated capital cost", as well as the "CCA class of the vehicle", the total kilometers traveled and the amount traveled for business purposes, and all expenses for this vehicle.
5- In the section "Allowance received", on the line "Allowance received for motor vehicle expenses (excl. CCA & interest)", enters the amount you received from your employer, if the employer paid you an allowance for your vehicle.
6- Go to the "Vehicle disposed during the year" section under the "ACB of the disposition" line, enter the Adjusted Cost Base Price of the vehicle sold i.e. the original purchase price of the vehicle.
7- For the line "If you disposed of the vehicle, enter the amount you received", indicate the total amount received in payment.
8- In the line "Did you liquidate all assets in this class?", Select "Yes" from the drop-down menu.
9- The rules for recovery and final losses do not apply to vehicles of class 10.1.
10- At the bottom of the page, click on the arrow between "Previous" and "Next".
11 - On the screen that appears, choose "Purchase Vehicle", click on the plus sign "+" icon and a new page titled "Purchased vehicle" will be generated.
12- On this page, enter the information for the new vehicle and indicate its date of acquisition.
13- Enter the total kilometers traveled and the number of kilometers traveled for business purposes for the new vehicle during the tax year.
14- In the "CCA Class" section, enter category 10.1 from the drop-down menu. On the line "Opening balance of undepreciated capital cost", do not enter any amount.
15- As you did for the former vehicle, enter the expenses incurred for the new vehicle in the tax year, the total number of kilometers traveled in the tax year as well as the number of kilometers traveled for business purposes.
16- If you have received an allowance for the expenses of your vehicle, you must enter the amount on the line "Allowance received for motor vehicle expenses (excl. CCA & interest)".
17- In the "Vehicle acquisition during the year" section, file the relevant information in the lines "description and amount of capital additions (other than AIIP)" or "Description and amount of capital additions of AIIP*", depending on the qualification of the vehicle.
In the "Description of the vehicle and vehicle cost" line, enter the vehicle description and the price paid including the taxes for the new vehicle. In addition, enter the ACB on the line "Adjusted cost base of the vehicle".
18- On the line "Application of half-year rule to current year additions", select "Yes" from the drop-down menu.
19- If you want to limit the CCA, for the line "Limit to the CCA of this vehicle (leave blank for maximum CCA) ", enter the desired amount. Otherwise, leave the field blank to obtain the maximum CCA amount.
The program will carry over the amount on line 9368 of federal form T777, as well as on lines 16 and 41 of Quebec form TP-59.
In addition, please note that under section A "Calculation of capital cost allowance (CCA) claim", in column 3 "Cost of additions in the year", the amount entered by the program will be $30,000 plus applicable taxes.
We recommend that you consult the CRA guide by clicking on the following link:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4044.html
NOTE: We suggest you keep a record for each year you claim expenses. Mainly for using your vehicle, this record must show both the total kilometers you drove and the kilometers you drove for employment purposes
ID: 20201021110036NA.xml
Webpage: KPA310-20201021110036NA.htm