Question

In the current year H Ltd., an HST registrant, disposed of a passenger vehicle (cost $36,000; UCC $17,000) for $12,000. At the same time H purchased a new passenger vehicle for $41,000 plus HST. What is the maximum CCA deduction that H can claim in the current year?

Answer 1

MAXIMUM CCA DEDUCTION :- ( Amount in $ )

1. On account of new asset (Note-1) $ 12, 300

2. On account of Disposed asset (Note-2) $ 7, 000

Total CCA Deduction $ 19, 300

Note - 1

Cost of Asset $ 36, 000

(Previous UCC) $ 17, 000

Balance of Asset $ 19, 000

(Disposed Value) $ 12, 000

Loss on sale/ CCA allowable $ 7, 000

Note-2

Purchase cost $ 41, 000

(CCA@30%)   $ 12, 300

Balance of Asset $ 28, 700

[ Rate of HST not available in question ]