Column 6 - Adjustment for current year additions

In the year you acquire or make additions to a property, you can usually claim the capital cost allowance (CCA) on one-half of your net additions (the amount in Column 3 - Cost of additions in the year minus the amount in Column 4 - Proceeds of dispositions in the year). We call this the half-year rule.

Calculate your CCA claim only on the net adjusted amount. Do not reduce the cost of the additions in column 3, or the CCA rate in Column 8 - Rate in %. For example, if you acquired a property in your current fiscal period for $30,000, you would base your CCA claim on $15,000 ($30,000 × 50%).

If you acquired and disposed of depreciable property of the same class in your fiscal period, the calculation in column 6 restricts your CCA claim.

Calculate the CCA you can claim as follows:

• Determine which of the following amounts is less:
  • the proceeds of disposition of the property sold, minus any related costs or expenses; or
  • the capital cost.
• Subtract the above amount from the capital cost of your addition.
• Enter 50% of the result in column 6. If the result is negative, enter "0."

In some cases, you do not make an adjustment in column 6. For example, in non-arm's length transactions, you may buy depreciable property that the seller continuously owned from the day that is at least 364 days before the end of your current fiscal period to the day the property was purchased. However, if you transfer personal property, for example, a car or a personal computer, into your business, the half-year rule applies to the particular property transferred.

Also, some properties do not follow to the half-year rule. Some examples are those in CCA classes 13, 14, 23, 24, 27, and 34 as well as some of those in Class 12, such as small tools.

The half-year rule does not apply when the available for use rules deny a CCA claim until the second tax year after the year you acquire the property.

For more information on the special rules that apply to Class 13, see Interpretation Bulletin IT-464, Capital Cost Allowance - Leasehold Interests.

For more information on the half‑year rule, see Folio S3-F4-C1, General Discussion of Capital Cost Allowance

Forms and publications

• Guide T4002, Business and Professional Income
• Form T2125, Statement of Business or Professional Activities
• Folio S3-F4-C1, General Discussion of Capital Cost Allowance
• Interpretation Bulletin IT-464, Capital Cost Allowance - Leasehold Interests

Related topics

• CCA classes

Date modified:

2017-01-03