Disposition of 1 item in a CCA class

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

Moderator: Mark T Serbinski CA CPA

Post Reply
nirvana_1959
Posts: 63
Joined: Fri Mar 18, 2016 9:17 am

Disposition of 1 item in a CCA class

Post by nirvana_1959 »

I have 2 computers in class 50 per below:

Computer-1: UCC at start of year = $800
Computer-2: UCC at start of year = $200

Computer-2 is damaged and I have junked it. No compensation was received for it (i.e., no insurance claim etc.).

How do I fill T2 Schedule-8 ?

What are the accounting entries ?

Thanks in advance.
nirvana_1959
Posts: 63
Joined: Fri Mar 18, 2016 9:17 am

Post by nirvana_1959 »

My question is basically this. If one of the items in a class is damaged and junked what do I do. Claim the loss somewhere (if so how) or pretend that thing is still in operation and do the usual depreciation (this is what I gathered from googling. Only when no items are left in a class you can claim terminal loss). May be I am missing something. Help please...
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Sounds lika a question for a Cdn tax forum.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nirvana_1959
Posts: 63
Joined: Fri Mar 18, 2016 9:17 am

Post by nirvana_1959 »

Hi Nelson. Thought you were taking a break from this forum. Good to hear from you.

Only this forum ( Canada / United States Tax & Accounting ) comes close to dealing with Canadian tax. So did a "Hail Mary".
nelsona
Posts: 18314
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

C'mon, there are dozens of Cdn tax forums.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nirvana_1959
Posts: 63
Joined: Fri Mar 18, 2016 9:17 am

Post by nirvana_1959 »

Oh you mean that way. Yeah you're right. My bad :-(.
nirvana_1959
Posts: 63
Joined: Fri Mar 18, 2016 9:17 am

Post by nirvana_1959 »

Here is a response from Allan Madan (CPA, CA):

"Since there are still assets remaining in Class 50, the Class cannot be closed and a terminal loss cannot be claimed. Continue to claim CCA as normal on Class 50 assets, even though you got rid of one computer for $0 proceeds.

For accounting purposes, record a capital loss for the disposal of the asset and remove the asset from the books. The capital loss = to the book value of the computer disposed of."
Post Reply