Question

In the current year H Ltd., an HST registrant, disposed of a passenger vehicle (cost $39,000; UCC $26,000) for $20,000. At the same time H purchased a new passenger vehicle for $48,000 plus HST. What is the maximum CCA deduction that H can claim in the current year?

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

$

Answer 1

Solution:

$10,200

Explanation:

The CCA limit for vehicle cost is $30,000 so even if the price of a passenger vehicle exceeds $30,000 you can only claim $30,000 plus the HST on $30,000 – no matter what the vehicle actually cost you.

Proceeds from disposal= $20,000

$48,000-$20,000 = $28,000

50% for the current year= 50%*$28,000= $14,000

$20,000+ $14,000= $34,000

30%*$34,000= $10,200