Purchased car in 2010 for capital cost of $30,000AB C D= A+B-C E = ½ x (B-C) F= D – E G H = F x G I = D - HYearBeg UCCAdditionsDispositionsLCOPUCC For Year½ Year RuleReduced UCCCCARateMaxCCAEnd UCC2010- $30,000 - $30,000$15,00015,00030% 4,500 25,500201125,500 - - 25,500 - 25,500 30% 7,650 17,850201217,8501. 17,850 - Note cumulative CCA = $12,1502. 15,000 2,850 (terminal loss)3. 20,000 (2,150) (recapture)4. 40,000LCOP = $30,000 (12,150) recapture1.LCOP = $17,850 economic decline equals cumulative CCA, so no true required2.LCOP = $15,000 economic decline greater than cumulative CCA, so too little CCA has been taken. “Catch up CCA” = $2,850*** the catch up CCA is called terminal lossand the terminal loss is deducted against business income*** in order to get a terminal loss all assets in the class must be disposed of, and a positive UCC balance remains
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Steven Spielberg, CCA, cumulative CCA, CCA H=FxG I=D