Question

Opening UCC balances

Class 1 $330,000

Class 8 $56,000

Class 10.1 $21,000

Class 13 $45,000

Class 50 $260,000

Any other classes have an opening balance of nil.

The company purchased furniture on April 1, 2020 for $5,212.

On the same date, furniture with an original cost of $142,713, was sold for $67,277.

Calculate the maximum impact on business income for the year from furniture and other miscellaneous tangible capital assets.

Answer 1

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Ans 1

Class number	Opening bal	Purchase	Disposition	UCC after add & disp	Adjustemnt for current yr additions	Base amt for CCA	% rate	CCA for the yr	UCC at the end
Class 1	330,000	-	-	330000	-	330000	4%	13200	316800
Class 8	56,000	5212	67277	0*	0	0	20%	-	-
Class 10.1	21,000	-	-	21000	-	21000	30%	6300	14700
Class 13	45,000	-	-	45000	-	45000	N.A	45000	0
Class 50	260,000	-	-	260000	-	260000	50%	130000	130000
								194500

Note : Since there is no class 13 , i am assuming its mis-printed instead of 43.

For each class, if the amount in Column 5 is negative, add it to income as a recapture on line 8230, "Other income," in Part 3 on page 1.

Recapture Gain In class 8 = 67277-(56000+5212) = 6065

The net effect of CCA on current yr income = (194500 – 6065 ) * tax rate applicable.

We are assuming that entire class 13 is depreciated in this yr , although this is not rational , but the lease term data is missing.