COMM 353 Lecture Notes - Lecture 18: Capital Cost Allowance, Capital Cost, Pesto
Document Summary
5 capital cost allowance and cumulative eligible capital (not responsible for page 234-235 other special situations, page 238 cec disposal election ) Ita 18(1)(b)- a taxpayer cannot deduct capital expenditures except as expressly permitted in the act. Ita 20(1)(a) taxpayers can deduct such part of the capital cost of property as is allowed by the income tax regulations . Capital cost allowance for tax purposes represents what amortization is for accounting purposes. There are a number of differences between accounting depreciation and tax. Accounting - depreciation must be taken on depreciable capital assets. Tax - taxpayer may choose to deduct cca. Accounting - depreciation occurs throughout a reporting period. Tax - cca is calculated at the end of the taxation year. Accounting - assets are grouped with other similar asset types. Tax - assets are grouped into classes with other assets based on estimated depreciation rates (the assets themselves may be very different)
