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.
Disposition of 1 item in a CCA class
Moderator: Mark T Serbinski CA CPA
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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...
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- Posts: 63
- Joined: Fri Mar 18, 2016 9:17 am
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- Posts: 63
- Joined: Fri Mar 18, 2016 9:17 am
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- Posts: 63
- Joined: Fri Mar 18, 2016 9:17 am
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."
"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."