Self-employment - Change of vehicle - Class
10
You have changed your vehicle in the tax year, and both vehicles
- the old and the new - are in the same class of cars, namely the
cars that are less than $30,000 before taxes.
At first, you must calculate all the expenses that you've
incurred for both vehicles, such as fuel costs, insurance expenses
and others. Furthermore, you will have to calculate the total
kilometers (KM) traveled in the tax year as well as the number of
kilometers traveled for business purposes. To do so, follow the
steps below:
1- On the "Left side menu of the Interview tab", select
the "Self-employment income" section.
2- Complete the "Business ID" and "Income, expenses"
pages according to the information that you have. Click on
"Next" at the bottom of the page after you've completed each
page.
3- At the subsection "Motor vehicle expenses" page, in the
first part, the information on your hold vehicle were carried over.
Make sure that "Class 10" has been selected for the CCA
class of the vehicle.
4- On the second (2nd) section of this page, "Addition of a
vehicle" on line "Description of the vehicle and vehicle
cost" enter a brief description of the car and its acquisition
cost.
5- At the line "Application of half-year rule to current year
additions", choose "Yes" from the drop-down menu.
6- In the third (3rd) section "Disposition of the vehicle",
enter the information on selling your old vehicle. As the price
sold you enter the total amount on line "Proceeds of disposition
of an asset".
7- For the line "ABC of the disposition", enter the Adjusted
Cost Base of the vehicle sold.
8- At the line "Did you liquidate all asset in this class?"
the answer is "No".
9- 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.
10- 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.
11- You must enter the gain separately under the section
"Capital gains (or losses) & ABIL" and on the screen to
the right, select "Real estate, depreciable property and others
properties" option.
12- On the page that appears, enter the information on the sale of
your vehicle.
13- 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.
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.
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 keep a record of all expenses and a daily
mileage log of your vehicle.
For more information, consult the CRA's guide by clicking on the
following link:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4002.html
ID: 20211006110415DE.xml
Webpage: KPA320-20211006110415DE.htm
