FINA 210 Lecture Notes - Lecture 6: Capital Cost Allowance, Canada Revenue Agency, 0 (Year)
26 Nov 2016
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Important because we have to pay annual taxes on profit of the sale of a property. Capital gain and capital gain taxes: capital gain: selling price original cost of property. Old rules: december 31, 1987 and before. New rules: january 1st, 1988: vacant land carrying charges and construction period soft costs. Capital cost allowance (cca): depreciation on building allowed under the income tax. No put i(cid:374) use: could depreciate propert(cid:455) e(cid:448)e(cid:374) if it"s i(cid:374)co(cid:373)plete. Half-year rule: use half the amount of cca (2% = half of 4%) Put in use: must complete property before claiming cca, all constructions costs must be accumulated. The capital cost allowance (cca) is a depreciation method under canadian tax law which allows for the accelerated write-off of property under various classifications. The capital cost allowance (cca) rate applicable to buildings in class 3 was reduced from. 5% to4% on a declining balance basis, effective for acquisitions starting in 1988.
