5b%20Cumulative%20Eligible%20Capital

5b%20Cumulative%20Eligible%20Capital - Cumulative Eligible...

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Cumulative Eligible Capital
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Cumulative Eligible Capital • This is very similar to CCA calculations, only for a special group of assets, known as intangible assets, or for tax purposes, Eligible Capital Property. • Items that would be included: – Goodwill purchased with the acquisition of a business – Customer lists – Trademarks, patents, licenses, franchises with unlimited lives (those with a limited life are in Class 14 for CCA purposes) – Incorporation, reorganization or amalgamation costs – Government rights (quota)
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Cumulative Eligible Capital • Items specifically excluded: – Land – Class 14 patents (with a limited life) – Payments made to produce tax exempt income – Payments made to creditors for redemption or cancellation of bonds or other debt instruments – Payments by a corporation to its shareholders – Cost of acquiring or issuing shares, bonds, mortgages, notes
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The process • When an eligible capital expenditure is made, ¾ of the cost is added to the CEC cost pool, which
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5b%20Cumulative%20Eligible%20Capital - Cumulative Eligible...

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