Schedule 10, Cumulative Eligible
Capital Deduction
As of January 1, 2017, the eligible capital property regime was replaced with a new CCA class available to businesses.
Note
If your tax year starts after December 31, 2016, do not complete
Schedule 10. Refer to Schedule 8, Capital Cost Allowance (CCA).
Under the old regime, eligible capital expenditures were for intangible property such as goodwill, and were added to the cumulative eligible capital pool at a 75% inclusion rate. The rate of depreciation of those expenditures was 7% on a declining-balance basis. Under the new regime, as of January 1, 2017, newly-acquired eligible properties are included in a new CCA class 14.1 at a 100% inclusion rate with a 5% CCA rate on a declining-balance basis. The existing CCA rules generally apply.
Fall Economic Statement 2018 proposes an accelerated investment incentive for CCA class 14.1 property. See What's New on page 3.
Special transitional rules apply to transfer any existing cumulative eligible capital (CEC) balance of a business to the new CCA class. Furthermore, for each tax year that ends before 2027, an additional 2% CCA is allowed for property acquired before January 1, 2017, and included in class 14.1.
A separate business deduction is provided for incorporation expenses incurred after 2016, such that the first $3,000 of the expenses, less the total of all amounts deducted by other taxpayers for the incorporation of the corporation, may be treated as a current expense rather than being added to the new class 14.1.
More information on the transitional rules are provided on Schedule 10.
References
Subsection 14(5)
Paragraph 20(1)(b)
Section 85
IT-143, Meaning of Eligible Capital Expenditure
|
|
|