ACCT461NotesCh4

ACCT461NotesCh4 - Chapter 7 Capital Cost Allowance...

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Chapter 7 – Capital Cost Allowance - amortization expense for Income tax purposes - it is different from accounting rules - the amount calculated is the maximum CCA - it does not need to be deducted if taxpayer does not want to deduct it
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Capital Cost Allowance Important Rules 1) Different Classes & Rates 2) ½ year rule 3) Recaptured CCA 4) Terminal Loss 5) Prorate CCA for short years 6) Capital Gain if asset sold for more than original cost
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- in year of purchase, ½ of regular CCA is deducted - ½ year adjustment is made in column 7 of CCA schedule. ½ (Additions – Disposals) (use NIL if amount is negative) Terminal Loss - when an asset is sold for an amount less than its undepreciated capital cost, and all the assets of the class are disposed of - a terminal loss is fully deductible in year of disposal - the difference between the proceeds and UCC is the amount of the terminal loss Recaptured CCA - when an asset is sold for an amount greater than the UCC in the class - the difference between the proceeds and the UCC is
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This note was uploaded on 01/01/2012 for the course ACCT 461 taught by Professor Patel during the Winter '09 term at Humber.

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ACCT461NotesCh4 - Chapter 7 Capital Cost Allowance...

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