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On March 1 of the current year G, who operates a wholesale business, leased a new...

On March 1 of the current year G, who operates a wholesale business, leased a new warehouse space and immediately spent $130,000 improving the interior of the building. The lease contract is for 3 years with an option to renew the lease for two additional 2-year terms. What is the maximum CCA deduction that G can claim in the current year?

Note: Do not place a minus sign in front of the amount.

$

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Answer #1

Please find below answer :

Spent for building = $ 130,000

Lease Contract = 3 years

Renew lease = 2 years

Total lease contract = 5 years

CCA Deduction =Spent for Building/Total lease contract

= $130,000/5

=$ 26000

According to rule 50% of CCA in 1st year = $ 26000 * 50%

                                                                        =$ 13000.

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