Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Does 13(7) apply where an automobile used for gaining employment income begins to be used to earn business income
Position TAKEN:
13(7)(a) and (b) not applicable
Reasons FOR POSITION TAKEN:
Motor vehicle was used to produce income, which includes employment income.
June 29, 1995
Ottawa Tax Services Headquarters
Client Assistance G. Martineau
G. Obert 957-8962
7-951102
Capital Cost Allowance - Subsection 13(7)
This is in reply to your memorandum of April 19, 1995 concerning the application of subsection 13(7) of the Act where an individual who used a motor vehicle in the performance of the duties of an employment begins to use it in the course of his own business. The individual is entitled to claim the vehicle expenses pursuant to paragraphs 8(1)(f) or (h.1) and 8(1)(j) of the Act.
It is our view that paragraphs 13(7)(a) and (b) of the Act do not apply where a motor vehicle, acquired for the purpose of producing income from employment, begins to be used for the purpose of producing business income. However, paragraph 13(7)(d) of the Act may apply if there is a change in the proportion of the use of the motor vehicle for business purpose relative to its use to earn employment income.
Section Chief
Financing, Leasing and Plans Section
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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