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Class 8 separate class


#1

I have two assets that belong in class 8.

One asset I wish to claim CCA on & the other not.
(The asset that I wish not to claim CCA on, I feel will retain its value & if CCA is claimed now it will create a recapture in the future)

Both assets are worth $10,000.00 each

I read in class 8 you can elect to have assets in separate classes.

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance/classes-depreciable-property.html#Class8

To make an election, attach a letter to your income tax return for the tax year in which you acquired the property.

I cannot locate this election - can someone shed some light?

Alternatively, I can keep both the assets in class 8 & only account for CCA on one.
e.g. $10,000.00 * 1/2(half yr rule) * 0.2 (cca rate)
However, maybe it’s not a good idea to mix assets I wish to depreciate with one’s I do not want to depreciate (if the value is above $1,000)

Thanks


#2

I think you make the election just by doing it.


#3

Elections are made by writing the election and providing to the CRA. If you electronically file, you submit the elections separately.

See https://www.canada.ca/en/revenue-agency/services/e-services/e-services-businesses/efile-electronic-filers/file-returns.html#h3


#4

But why bother? As long as the class never empties, you never have a recapture. Class 8 is pretty easy to stack.

And, if ultimately the class does empty, it is often when the business is sold and there is ample cash in hand to clear the tax on the recapture. Time value of money is your friend.


#5

Yes, must submit the elections separately.


#6

Where can I find that?


#7

In reply to your message about “Where can I find that?”

Perhaps you can expand on your message… Which “that” are you referring to?

Given what people have written, nothing seems to be a trigger to your comment.


#8

It is not in the scope of this forum community to provide professional accounting and tax and legal advice. I would suggest you seek professional accounting advice.


#9

To be fair, Bert, most users of this forum are (maybe that is “should be”) pros, discussing different approaches to problems. This is generally limited to “how to accomplish X on TaxCycle” and other, more technical, discussions really should be held on places like Taxboard or similar fora.

One of the biggest stumbling blocks to newbies in the business is finding a place to learn unfortunately. The Big 4 (3? 5?) are great, but limited, and the CPA (CICA) In-Depth Tax Course which I did a thousand years ago can be…daunting, and somewhat tailored to the Big 4’s needs. Small shops often don’t have the time, inclination or expertise to educate new members in tax.

One of the great benefits for me as a solo practitioner has been having resources available to me to educate me - even on the “simple” stuff.

On the other hand, I don’t entirely disagree with you either. :slight_smile:


#10

I agree, most users on this board are, in every sense of the word, pros.


#11

Agree to Bert and Don, but honestly speaking, I believe the minimum one should do is to conduct their own research before posting a technical question here.


#12

I think if you are logged into a “linkedin” account… you can go to Google and type the following into the search bar.

Linkedin 4307361

The first Google hit might take you to a group where people ask and answer specific tax types of questions and give accounting advice. I don’t post there much but I do enjoy reading through the conversations.
For those familiar with Devaney’s Video Tax News, Hugh Neilson is pretty active in that group and provides quite a bit of good information.


#13

I am late to this discussion thread. However I would like to suggest a few resources which I have found to be very helpful in the actual ins and outs of tax.

  1. Attend all CRA webinars live. Great place to learn about CRA’s position.

  2. Refer to the following:-

Line by line T1 is no longer published. Was a fantastic starter’s guide.

Now I use as a starting point…
Byrd & Chen’s, Canadian Tax Principles. I like the student edition since the devil is in the details.

http://catalogue.pearsoned.ca/educator/product/Canadian-Tax-Principles-20172018-Edition-Plus-Companion-Website-with-Pearson-eText-Access-Card-Package/9780134833644.page

I have mixed feelings about the EY’s Tax References sold through CPA Knotia.

Instead I prefer…

Wolters Kluwer
Preparing your income tax return - T1 , T2, T3 editions.
Initially created by Michael Mallin, this is my first reference for technical points.
http://www.cch.ca/tax/prep2008/index.aspx?tid=34

I also like Video Tax News.


There seminars, products, and courses are fabulous.
Their newsletters are terrific for changes and updates. Or, CPA Knotia has a Tax News online entry level product.

For a live Forum I find TaxCycle very helpful for nuances and workflow.

For topical conversations I find the Institute of Professional Bookkeepers of Canada (IPBC) to be helpful in the General Forum.

I read at the CRA Guides, Folios, IT’s, and IC’s.

Bottom Line…
It takes a lot of time, training, research, love of taxation, and practice in the front-lines to become experienced. I was shocked when I was first told that it takes about 5 to 7 years to see enough types of returns and client situation to be proficient. I felt daunted. Thank goodness that I am very resourceful, diligent, and persistent. I am now in my 19th year of Tax Prep and grateful for the advice to dig deeply and broadly. Eventually it will all come together.

And, with the continually changes there is always something new to learn.

I value the tips and tricks which I learned from this Forum and elsewhere.

Thank you to those who are willing to share.


#14

Question - Is the Byrd & Chen’s Canadian Tax Principles linked above a paper reference manual? Or only online?

I get concerned with online materials since you can be locked out later.

I am always interested in additional references to add to my library.


#15

Highly recommending the

Wolters Kluwer
Preparing your income tax return - T1 , T2, T3 editions

Have used something similar back when I was an intern and is now a great use for training our new staffs.


#16

The election is simply a letter you write to CRA detailing the asset, cost and reasoning behind keeping it apart from other Class 8 assets.

Byrd & Chen is available in paper format - it was the study assistance guide for us CGA students back in the day

Wolters Kluwer is by far the better “Preparing Your Tax Return” guides out there. EY is written in language that is still too “legalese”


#17

Thank you so much @dominique_dabolczi! Your comment is very much appreciated!
Have a wonderful weekend