CRA indicates that a renovation or alteration made to a depreciable property may qualify as accelerated investment incentive property

Would a renovation or alteration made to a depreciable property, originally acquired in a taxation year ending prior to November 21, 2018, qualify as accelerated investment incentive property (“AIIP”), notwithstanding that the taxpayer had, prior to that date, been claiming CCA on the original property?

CRA stated that it “considers there to have been an acquisition of property when there is an alteration or renovation to a particular depreciable property, even if this alteration or renovation represents an addition to an already existing property,” so that the requirement in Reg. 1104(4)(a), that the property have been acquired after November 21, 2018, would be satisfied.

CRA also indicated that Reg. 1104(4)(b) would generally be deemed by Reg. 1104(4.1) to be satisfied, provided that “no CCA or terminal loss had been deducted in respect of the alteration or renovation by any person or partnership for a taxpayer year ending before the property was acquired by the taxpayer.” Thus, the renovation or alteration would generally be expected to qualify as AIIP.

Neal Armstrong. Summary of 16 June 2022 External T.I. 2019-0819951E5 under Reg. 1104(4).