Schedule 8, Capital Cost Allowance (CCA)

Schedule 8 is a summary of all of the copies of the multiple copy form, Capital Cost Allowance (CCA) Workchart (Jump Code: 8 WORKCHART). These two forms are completely interrelated. You can access the information in the workchart at any time by double-clicking a cell in Schedule 8.

Characteristics of the Capital Cost Allowance Workchart

The CCA workchart is completely dynamic, so the display in the workchart is modified according to the selected class.

Once the class is selected, only the relevant cells will appear for calculation purposes.

In the workchart, a drop-down menu (empty to start with) then displays the relevant information for each class created.

As a result, the following information is available for each class created:

  • entry number (according to the order of creation);
  • the number of the class on line 200;

Note: To enable data import into a client file and to be able to ensure a better tracking of a CCA class that can have various CCA rates as a result of an additional CCA deduction, we have added a letter at the end of the number of the prescribed class to differentiate them. It consists of classes 1a at 10% (4% + 6%) and 1b at 6% (4% + 2%). Note that when paper printing all of the schedules that require a CCA class number, a custom class with a letter will be displayed, while when printing the schedules in “T2 - Bar codes” format and during electronic transmission of the federal return and the RSI schedules for Alberta requirements, the corresponding prescribed class number will continue being used.

  • the description given to this class in the appropriate cell.
  • the “Québec” reference, in cases of a separate class that is used solely for the Québec income tax return and that relates to property qualifying for the additional CCA of 30%, the indicator “Québec.”

Below is an example of what the drop-down menu in the CCA workchart could look like.

The classes are listed in the drop-down menu for line 200 and, according to the selected class, one of the following four data entry screens displays to calculate the CCA:

  • CCA class 10.1;
  • CCA class 13;
  • CCA class 14;
  • CCA other than classes 10.1, 13 and 14.

Numerous classes are available in the drop-down menu for line 200. All of these classes are divided into five groups according to the display that will automatically be available when a class is selected.

Thus, class 10.1 includes passenger vehicles; class 13 includes leaseholds, class 14 includes patents, franchises, concession or licences, and classes 24, 27, 29 and 34 are for property that is generally used for manufacturing and processing. All other classes are part of a general group that will not change the original display of the workchart.

Linking a CCA Class to a Statement of Real Estate Rental Properties (Regulation 1100(11))

Steps for linking a CCA class to a statement of real estate rental property

A copy of the Statement of Real Estate Rental Property must be completed for each rental property that the corporation possesses either as a sole owner or as a co-owner.

Then indicate that you want to link this property to a statement of real estate rental property by answering the relevant question, and then, using the drop-down menu, select the address of the property for which you wish to transfer the information:

Consequently, all information relating to the calculation of the class will be transferred to the “Calculation of capital cost allowance (CCA)” section of the selected rental form and the program will be able to recalculate the CCA based on the limitations for rental properties under regulation 1100(11).

This new CCA claim will be updated to Schedule 8, Capital Cost Allowance (CCA) (Jump Code: 8) as well as to the T2 - Bar Code return.  

The calculated federal CCA claim is automatically updated to the Québec and Alberta CCA columns in the CCA workchart. Override the provincial information if it differs from the federal.

CO-771, Calculation of the Income Tax of a Corporation (Jump Code: 771)

When, in the Capital Cost Allowance (CCA) Workchart (Jump Code: 8 WORKCHART), the CCA amount claimed with regard to rental properties for Québec purposes differs from the amount claimed for federal purposes, a diagnostic prompt you to review the income (or loss) amount from properties calculated for Québec purposes on line 22, if applicable.

Data rolled forward

The real estate rental property will remain linked to a statement of real estate rental property until you answer Yes to the question Was this the final year of your rental operation? in the Statement of Real Estate Rental Properties (Jump Code: RENTAL).

Sorting of CCA classes

Two sort functions are available in this schedule. When you click the first  button, the CCA classes will appear in an ascending order on their class number, both on screen and when printing. If the same class number is found twice or more, a second sort will automatically be performed: items from a same category will be classified in alphabetical order according to information in the Description column. When adding classes, you will have to repeat the process to sort them. In addition, when you click the second button, the CCA classes will appear in an ascending order on their capital cost allowance (CCA) rate, both on screen and when printing. If the same CCA rate is found twice or more, a second sort will automatically be performed: items from a same CCA rate will be classified in an ascending on their Class number column. If the same class number is found twice or more, a third sort will automatically be performed: items from a same category will be classified in alphabetical order according to information in the Description column. When adding classes, you will have to repeat the process to sort them.

Note that the buttons will also be on the Forms CO-130.A, Capital Cost Allowance (Jump Code: Q8) and the Alberta Schedule 13, Capital Cost Allowance (Jump Code: A13). Any sort requested from one of these three forms will automatically be applied to the two other forms.

Capital Cost Allowance Claim Defaulted to Zero for all Classes

A check box allows you to cancel the default CCA calculation for all classes. Note that terminal losses, recapture of capital cost allowance and any overrides made on the CCA claimed will not be modified when the box is selected.

This check box will also be on Form CO-130.A, Capital Cost Allowance (Jump Code: Q8) and the Alberta Schedule 13, Alberta Capital Cost Allowance (CCA) (Jump Code: A13). The box appearing on the provincial forms will be selected according to federal Schedule 8, but it will be possible to make a separate election by overriding it.

Additions in the year (line 203)

The available-for-use rule determines the earliest tax year in which a corporation can claim CCA for depreciable property.

The property must be listed as an acquisition in the year (line 203) in a given class for CCA purposes only in the tax year where it is available for use based on the available-for-use rule.

To remember to list a property that is not yet available for use, we suggest that you attach a note to the relevant line 203 on which you should enter as much information as possible.

You can keep this note when rolling forward the client file by selecting both the box Keep this note when rolling forward the file, in the Note dialog box, and the box Keep the notes attached to cells, under Options and Settings/Roll Forward/Data Options.

Example:

The content of the note can be consulted at any time by placing your cursor on line 203 of the appropriate class or by accessing the Attached Notes – Summary (Jump Code: ATTN).

For more details on how to use attached notes, consult the “Attached Notes and Schedules” Help topic.

Adjustments and transfers (lines 205)

In Schedule 8 WORKCHART, several separate lines have been created to help identify the adjustment type that is affecting the CCA class. The amounts entered on all these lines (including lines 221 and 222) aggregate the amount shown on line 205, Adjustments and transfers, in column 5 of Schedule 8.

ITC (prior year)

This line can be used to enter the federal investment tax credits (ITCs) (other than research and development ITCs) used to reduce tax payable or claimed as a refund in the previous tax year. It can also be used to enter any provincial or territorial ITCs received or entitled to be received by the corporation in the current year.

GST/PST rebate

This line can be used to enter the goods and services tax/harmonized sales tax (GST/HST) credit relating to property in a class, and any provincial sales tax (PST) credit, where applicable, claimed or entitled to be claimed, or the rebate received or entitled to be received by the corporation in the year.

Adjustments and transfers not affecting the adjustments under subsection 1100(2) ITR

The amount on the line can be used to deduct, among other things, the amount of the capital cost reduction of the class resulting from the application of section 80 ITA as well as the government assistance received or entitled to be received in the year with respect to property in the class.

The amount on the line can also be used to add, among other things, the value of depreciable property transferred as a result of the amalgamation or winding-up of a subsidiary or in accordance with section 85 ITA, rebates of sales tax (provincial or federal) or GST/HST input tax credits with respect to property in the class as well as the government assistance amount repaid in the year that previously reduced the capital cost of the class;

Line 221, Assistance received or receivable during the year for a property after its disposition and line 222, Amount repaid during the year for a property after its disposition

The amounts entered on these lines are included in the calculation of the lines relating to the UCC adjustment under subsection 1100(2) of the Income Tax Regulations.

See also

Additions and Dispositions Workchart and Class Property History Table

Statement Real Estate Rental Properties (Regulation 1100(11))

Leasehold Interests (Class 13)

Patents, Franchises, Concessions and Licences for a Limited Period (Class 14)

Prior Year Leasehold Additions

Passenger Vehicles (Class 10.1)

T2 Corporation – Income Tax Guide

CO-130.A - General Information

IN-191, Capital Cost Allowance in Respect of Property Acquired After November 20, 2018