CCA Classes

Class 1

4%, 6%, 10%

Buildings, bridges, canals, dams, culverts, subways, tunnels, and certain railway roadbeds

Class 3 - 5% = buildings bought before 1988

Class 1 =

4% - buildings bought after 1987 til including 2007

Commercial buildings bought after 2007 - can elect to allocate it to a separate class 1 =

6% = building is used 90% for commercial purposes (not man. & proc)

10% = building is used 90% (measured by square footage) for manufacturing and processing goods for sale or lease

The availability of these special rates is conditional on the taxpayer allocating each eligible building to a separate class

Each rental building costing $50,000 or more MUST be in a separate Class 1

Land is not depreciable property. Therefore, when you acquire property, only include the cost related to the building

Class 3

5%

Buildings bought before 1988 + breakwaters, docks, trestles, windmills, wharfs, jetties, and telephone poles

Each rental building costing $50,000 or more MUST be in a separate Class

Class 8

20% - various machinery, equipment, and furniture

machinery, equipment, structures like kilns, tanks, and vats, electrical generating equipment, advertising posters, bulletin boards, and furniture not specifically included in another class

furniture, appliances, outdoor advertising signs, refrigeration equipment

tools costing $500 or more per tool

office equipment like photocopiers, fax machines, telephone equipment. if these cost $1000 or more = you can elect to have it included in a separate class.

bar code scanners, cash registers, calculators,

communication equipments (cellphones NOT smartphones), radio

Class 10

30% - vehicles $30,000 or less, and trucks, vans, trailers (no matter now expensive)

and automotive equipment, wagons, buses, contractor's movable equipment, mine railway equipment, mining and logging equipment, TV channel converters and decoders

films, portable building and equipment used in a construction business

Class 10.1

30% - passenger luxury vehicles costing > $30,000

CCA limit = $30,000 (the amount of the addition can be max $30k)

must have a separate class 10.1 for each luxury car

- no terminal loss or recapture allowed

- in year of disposal, 50% of normal CCA for the year can be deducted (bal. @ year end must be nil)

Class 12

100% - computer software and small assets (some excluded in 1/2 yr rule)

computer software that's not system software, books in a lending library, dishes, cutlery, jigs, dies and moulds, patterns, uniforms and costumes, linen, motion picture films

video cassettes, video laser discs, and digital video disks, videotapes

dental and medical instruments, kitchen utensils

tools < $500

chinaware

computer applications software, TV commercial

class 13

Straight line - leasehold improvements/renovations (exception to the general rule of owning the asset)

CCA must be calculated on a S-L basis for each capital expenditure incurred. Max deductions will be the lesser of:

1) 1/5 of capital cost of leasehold improvement

2) capital cost of improvement ÷ lease terms (original + first renewal option)

class 14

Straight line & NO 1/2 rule - limited life intangible assets

- we use straight line amortization over their legal life

copyrights, franchises, concessions, or licences for a limited period

patents with useful life < 4 years

class 14.1

Intangible assets with unlimited life

New rule: 2017

- we add 100% of additions and dispositions

- 5% CCA

- 1/2 yr rule apply

- no terminal losses on class 14.1 assets as long as the business continues to operate

Old rule:

- we add 75% of add. and disco.

- 7% CCA

- no 1/2 yr rule

goodwill, franchises with unlimited life, licenses unlimited life, patents unlimited life, customer lists, expenses of incorporation > $3000, reorganization, amalgamation

Only 1 class for all goodwill (no separate class) regardless of the number of goodwill acquisitions (as long as they are not carried as a separate business, otherwise a separate class 14.1 would be established for each business)

class 16

40% - taxis, video games (coin operated)

class 44

25% - patents (limited life) with useful life >/= 4 years. if life is shorter elect to class 14

class 50

55% - computer hardware and system software (not application), general-purpose electronic data equipment acquired AFTER Jan. 31, 2011

and also iPhones, smartphones and tablets (basic cellphones are in class 8)

if your cellphone has life < 1 year = it's a current expense and not a depreciable capital asset (not considered a L-T fixed asset)

Class 43, 29, 53

Manufacturing and processing equipment =

Eligible machinery and equipment used in Canada primarily to manufacture and process goods for sale or lease

Class 43 = 30%

- bought on/before 2007

- if equipment is not used for manufacturing = belongs in class 8

Class 29 = 50% Straight-line

- bought after 2007 and before 2016

- first year rule

straight‑line method:

1st year = claim up to 25% of cost

2nd year = claim 50% of cost

3rd year = claim the remaining 25%.

Any amount that is not claimed in a year can be claimed in a later year.

Class 53 = 50%

- bought on or after 2016

Assets not applicable to CCA deductions

- land

- landscaping (flowers, trees, anything alive)

classes for which the 1/2 year rule does not apply

- Class 14 assets

- Class 12 = tools < $500, uniform, chinaware (including linen), medical/dental instruments