Automobile Expenses – Non-Deductible Interest Expenses and Other Expenses

In order to allow the program to correctly calculate the non-deductible expenses amount, the following information should be provided:

• the date financing began;
• the date financing terminated (or the date the automobile was disposed of or the date the lease agreement was cancelled when this date occurs before the end date of the original lease agreement);
• Interest expenses paid or payable for the fiscal year.

This date is important as it enables all calculations.

The program only supports the dates where the financing began subsequent to December 31, 1999. If the date is before January 1, 2000, manually modify the monthly limit amounts.

When the date where the financing began is subsequent to the corporation’s fiscal year-end date, the calculations will be performed normally. However, a diagnostic will indicate that the non-deductible interest expenses amount will be ignored for the year with regard to this automobile. Furthermore, the information related to this automobile will be retained when the client file is rolled forward.

This date is important to enable the various calculations, in particular when the lease agreement terminates as a result of the disposition of the automobile or as a result of a breach in the lease agreement in the corporation’s fiscal year. Moreover, this information is also used for purposes of rolling forward the client file.

Note: If no date where the financing terminated is entered, the program will presume that this date is automatically ending after the corporation’s fiscal year end and all calculations will be performed normally.

When the automobile is disposed of or when the lease agreement is cancelled before its due date in the corporation’s fiscal year, the disposition or cancellation date must be entered. Moreover, when a date is already entered on this line, you must replace it with the date the automobile was disposed of or the date the lease agreement was cancelled.

The program calculates the number of eligible days where interest was payable. If the fiscal year is less than twelve months, the program will adjust the number of days accordingly.

To calculate the number of days included in the corporation’s fiscal year, the program calculates the number of days included in the following period:

• start of the period − the start date of the fiscal year or the date financing began if this date is subsequent to the start date of the fiscal period;
• end of the period − the end date of the corporation’s fiscal year or the date financing terminated if this date is prior to the end date of the fiscal period (see the note above on this topic).

• Before 2024: $300

• 2023 and after: $350

This line and the related description field allow you to enter all other expenses not covered by the program with regard to the automobile.

The program assumes that the automobiles are used exclusively for business purposes. However, when they are used for personal purposes, adjustments to the non-deductible interest expenses calculated by the program may be required. You can use this cell to make the appropriate adjustments.

This cell can also be used to exclude the personal portion of the other non-deductible expenses related to this automobile based on the number of kilometres travelled for personal purposes versus business purposes. You can also attach a schedule to the numerical cell to explain the data in the cell (Jump Code: ATTS). Also note that a negative value can be entered in this cell.

All of the information related to an automobile will be rolled forward as long as the date where financing terminated (or the date the automobile was disposed of or the date the lease agreement was cancelled when this date occurs before the end date of the original lease agreement), will not expire before the corporation’s fiscal year end.

If no date where the financing terminated is entered, the program will presume that this date is automatically ending after the corporation’s fiscal year end and all information with regard to this automobile will be rolled forward.

This form becomes applicable as soon as interest expenses for an automobile are entered and an interest expenses amount and other expenses is not deductible based on the amount calculated by the program on line D of the form.