Question

Kingbird Inc. purchased an asset at a cost of $30,000 on March 1, 2018. The asset has a useful life of seven years and an estimated residual value of $2,400. For tax purposes, the asset belongs in CCA Class 8, with a rate of 20%. Calculate the CCA for each year, 2018 to 2021, assuming this is the only asset in Class 8.

CCA

2018 $

2019 $

2020 $

2021 $

How would the calculation change for 2018-2021 based on the new CCA rules assuming this is “eligible property”?

CCA

2018 $

2019 $

2020 $

2021 $

Answer 1

ANSWER

	CCA
0		$30,000
2018	=20%*30,000*(1/2) = 3,000	$27,000
2019	=20%*27,000= 5,400	$21,600
2020	=20%*21,600= 4,320	$17,280
2021	=20%*17,280= 3,456	$13,824

in the first year, the rule applies as per which, 50% of UCC value is taken and then CCA of 20% applied. Later in the year it stays at constant 20%

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