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: Can the additional CCA provided for under Regulation 1100(1)(zg) or (zh) be claimed in a year other than the year the relevant property is acquired?
Position: No.
Reasons: The draft Regulations are clear.
XXXXXXXXXX 991995
Attention: XXXXXXXXXX
November 23, 1999
Dear Sirs:
Re: Additional Capital Cost Allowance - Year 2000 computer hardware and software
We are writing in response to your letter dated June 25, 1999, wherein you have requested relief of an administrative nature related to the acquisition of property that is eligible for additional capital cost allowance (CCA).
In particular, you are referring to a scenario where a corporate taxpayer filed its tax return prior to June 11, 1998, the date on which the Department of Finance announced that additional CCA could be claimed on certain depreciable property acquired after January 1, 1998, for year 2000 computer compliance. The corporate taxpayer had acquired depreciable property eligible for the additional allowance but did not claim the additional CCA allowance in its income tax return for that period as the additional allowance had not yet been announced.
In addition, the corporate taxpayer had undertaken tax planning measures for that fiscal year by declaring a management bonus to arrive at a corporate taxable income of $200,000.
Your local tax services office has advised that taxpayers will be allowed to amend their 1998 fiscal CCA claim to include the additional CCA claim which was not claimed due to the timing of the announcement. We presume that this additional CCA claim is allowable under the general approach outlined in Information Circular IC 84-1, Revision of capital cost allowance claims and other permissive deductions.
The (additional) CCA provided for in draft paragraphs 1100(1)(zg) and (zh) of the Income Tax Regulations may only be claimed in the year in which the relevant property was acquired. It is not available to be claimed in a subsequent year in respect of that property. As indicated above, if the CCA claim for certain property pursuant to paragraphs 1100(1)(zg) or (zh) was not made, you may submit a late election to your local tax services office in respect of the taxation year in which the property was acquired.
We further note that the CCA claim provided for under draft paragraphs 1100(1)(zg) and (zh) is not mandatory and that the other CCA provisions will otherwise be applicable if this additional CCA is not claimed.
We trust our comments will be of assistance to you.
Yours truly,
Paul Lynch
for Director
Resources, Partnerships and Trusts Division
Income tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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