Allocating the allowance for motor vehicle expenses

Program(s) affected: T1 Document created: March 31, 2003 Tax year(s): 2002 Document last modified: Version(s): Problem status: Pending

Why does DT Max require three different types of entries with respect to the allowance received for motor vehicle expenses?

For the purpose of calculating motor vehicle expenses for a commission employee or for a salaried employee, the allowance received must be entered in the group Vehicle-Exp under the keyword Allowance.c, and this amount must be shared among the three categories available:

• Motor vehicle expenses (excluding CCA & interest]
• Capital cost allowance
• Interest paid on a vehicle loan

If the allowance is not allocated correctly, you may end up claiming an amount that is higher than the corresponding expense. In such a case, the exceeding portion of the allowance cannot be deducted and is therefore lost.

To assist you in determining the correct amount to allocate to each category, please refer to forms T777 and TP-59 when running a basic calculation in DT Max excluding the allowances received.

For a commission employee, the net amounts of CCA and interest on the vehicle are entered in the section Unrestricted expenses of the workchart for line 229 (federal).