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.
According to CRA rules, you must enter the information for each vehicle separately, that is in two separate 10.1 categories.
1- On the "Left side menu of the Interview tab", select "Self-employment income" and on the right-hand page that appears, select the type of business that applies to your situation.
2- Complete the "Business ID" and "Income, expenses" pages. Click on "Next" at the bottom of the page.
3- On the page ''Motor vehicle expenses'', if you used the same software last year the basic information of your old vehicle will have been transferred. If not, choose the option ''Purchased motor vehicle'', enter the information for your first car, including the ''Opening balanced of the undepreciated capital cost'', the class, the kilometers travelled for business and also the total kilometers travelled during the year.
4- For the line "Adjusted cost base of the vehicle", enter the ACB of the vehicle sold.
5- In the third (3rd) section "Disposition of the vehicle", enter the information on selling your old vehicle. For the price sold, of the vehicle, enter the total amount on the line "Proceeds of disposition of an asset".
6- For the line "ABC of the disposition", enter the Adjusted Cost Base of the vehicle sold.
7- For the line "Did you liquidate all assets in this class?" the answer is "Yes".
8- For the line "ACB of the disposition", indicate the total amount received in payment. If the proceeds of the disposition of the property exceed the ACB, the result will be a capital gain.
9- In this case, return to "Interview setup" and choose "Investment income and expenses" icon, check "Capital gains (or losses) and capital gain history" and click "Next" at the bottom of the page.
10- You must enter the gain separately under the section "Capital gains (or losses) & ABIL" and on the screen to the right, select the "Real estate, depreciable property, and other properties" option. Schedule 3 will be produced by the program if you made a gain that will be entered on line 1300 of Schedule 3 and the gain will be reported on line 12700 of the federal return.
11. Click on "Arrow" between "Next" and "Previous" the "Vehicle expenses" page will appear, click the plus sign "+" left of "Purchased motor vehicle".
12- A page will open called "Purchased vehicle" enter in this page information on this new vehicle. On the line "Opening balance of the undepreciated cost" do not enter any amount;
13. As with the previous vehicle, enter expenses for this new vehicle during the tax year, the total Kilometres traveled and traveled for business purposes;
14- On the second section of this page "Addition of a vehicle" on the line "Description of the vehicle and vehicle cost" enter the price paid for the new vehicle, and a brief description;
15- On the line "Application of half-year rule to current year additions" select "Yes" from the menu;
16- If you want to limit the CCA on the line "Limit to the CCA of this vehicle (leave blank for maximum CCA)", enter the desired amount. Again, leave blank to get the maximum CCA.The program will carry over the amounts on lines 9281 and 9936 of federal form T2125 and on lines 220 and 240 of Quebec form TP-80. In addition, please note that in Area A, "Calculation of capital cost allowance (CCA) claim", in column 3 titled "Cost of additions in the year" the amount entered by the program will be $ 30,000 plus all applicable taxes.
Also, if you made a capital gain, Schedule 3, and schedule G for Quebec residents, will be generated by the program.
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: 20211022092918DE.xml
Webpage: KPA350-20211022092918DE.htm