Example – Calculation of capital cost allowance on form T2125

Example

Area A – Calculation of capital cost allowance (CCA) claim
1 – Class number	2 – Undepreciated capital cost (UCC) at the start of the year	3 – Cost of additions in the year (see Areas B and C)	4 – Cost of additions from column 3 that are DIEPs (property must be available for use in the year)^{Footnote 1}	5 – Proceeds of dispositions in the year (see Areas D and E)^{Footnote 2}	6 – Proceeds of dispositions of DIEP (enter amount from col. 5 that relates to DIEP from col. 4)	7 – UCC after additions and dispositions (col. 2 plus col. 3 minus col. 5)^{Footnote 3}	8 – UCC of DIEP (col. 4 minus col. 6)^{Footnote 4}	9 – Immediate expensing amount for DIEPs^{Footnote 5}	10 – Cost of remaining additions after immediate expensing (col. 3 minus col. 9)	11 – Cost of remaining additions from column 10 that are AIIPs or ZEVs ^{Footnote 6}	12 – Remaining UCC after immediate expensing (col. 7 minus col. 9).	13 – Proceeds of dispositions available to reduce additions of AIIPs and ZEVs (col. 5 minus col. 10 plus col. 11). If negative, enter "0"	14 – UCC adjustment for current-year additions of AIIPs and ZEVs (col. 11 minus col. 13) multiplied by the relevant factor. If negative, enter "0"^{Footnote 7}	15 – Adjustment for current-year additions subject to the half-year rule. 1/2 multiplied by (col. 10 minus col. 11 minus col. 5). If negative, enter "0"	16 – Base amount for CCA (col. 12 plus col. 14 minus col. 15)	17 – CCA rate %	18 – CCA for the year (col. 16 multiplied by col. 17, or a lower amount, plus col. 9)	19 – UCC at the end of the year (col. 7 minus col. 18)^{Note de bas de page 8}
10	$1,000	$16,000	$0	$1,000	$0	$16,000	$0	$0	$16,000	$0	$16,000	$0	$0	$7,500	$8,500	30	$2,550	$13,450
8	$5,000	$0	$0	$0	$0	$5,000	$0	$0	$5,000	$0	$5,000	$0	$0	$0	$5,000	20	$1,000	$4,000

Cathy enters her total CCA claim for the year on line 9936, "Capital cost allowance (CCA)" in Part 4 of Form T2125.

Note
Her total CCA claim for the year is limited to the total of all amounts in column 18, $3,550, minus any personal part and any CCA for business-use-of-home expenses. For information on the CCA for "Calculation of business-use-of-home expenses," see "Special situations" in Chapter 4 of guide T4002.

Area B – Equipment additions in the year
1 – Class number	2 – Property description	3 – Total cost	4 – Personal part (if applicable)	5 – Business part (column 3 minus column 4)
10	Passenger vehicle	$16,000	Varies	$16,000

Cathy's business part of her total additions in the year, line 9925 of Form T2125, is $16,000.

Area D – Equipment dispositions in the year
1 – Class number	2 – Property description	3 – Proceeds of disposition (should not be more than the capital cost)	4 – Personal part (if applicable)	5 – Business part (column 3 minus column 4)
10	Passenger vehicle	$1,000	$0	$1,000

Cathy's business part of her total equipment dispositions in the year, line 9926 of Form T2125, is $1,000.

Note
If you disposed of property from your business in the year, see Chapter 3 of Guide T4002 for information about your proceeds of disposition.

Forms and publications

Footnote

Footnote 1

Columns 4, 6, 8 and 9 apply only to designated immediate expensing properties (DIEPs). See subsection 1104(3.1) of the Income Tax Regulations for definitions. A DIEP is a property that you acquired after December 31, 2021, and that became available for use in the current year. For more information, see Guide T4002.

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Footnote 2

The proceeds of disposition of a zero-emission passenger vehicle (ZEPV) that has been included in Class 54, or a passenger vehicle bought after April 18, 2021, that has been included in Class 10.1, and whose cost is more than the prescribed amount will be adjusted based on a factor equal to its prescribed amount as a proportion of the actual cost of the vehicle. For dispositions after July 29, 2019, you will have to adjust the actual cost of the vehicle for any payments or repayments of government assistance that you may have received or repaid for the vehicle. If the passenger vehicle in Class 10.1 is not designated for immediate expensing treatment, this special rule does not apply. For more information on proceeds of disposition and prescribed amounts, read "Class 10.1 (30%)" and "Class 54 (30%)" in Guide T4002.

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Footnote 3

If you have a negative amount in column 7, add it to income as a recapture in Part 3C on line 8230, "Other income." If no property is left in the class and there is a positive amount in this column, deduct the amount from income as a terminal loss in Part 4 on line 9270, "Other expenses." Recapture and terminal loss do not apply to Class 10.1 property unless it is a DIEP.

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Footnote 4

The amount you enter in column 8 must not exceed the amount from column 7. If the amount from column 7 is negative, enter "0."

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Footnote 5

The immediate expensing applies to DIEPs included in column 8. The total immediate expensing amount for the tax year (total of column 9) is limited to the lesser of:

• the immediate expensing limit, which is equal to one of the following, whichever is applicable:

- $1.5 million, if you are not associated with any other eligible person or partnership (EPOP) in the tax year

- amount iii of Area G, if you are associated with one or more EPOPs in the tax year

- zero, if you are associated with one or more EPOPs and an agreement that assigns a percentage to one or more of the associated EPOPs was not filed with the minister in a prescribed form

- any amount allocated by the minister under subsection 1104(3.4) of the Regulations

• the UCC of DIEPs in column 8

• the amount of income, if any, earned from the source of income that is a business (before any CCA deductions) in which the relevant DIEP is used for the tax year

For more information, see Guide T4002.

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Footnote 6

Columns 11, 13 and 14 apply only to accelerated investment incentive properties (AIIPs) (see subsection 1104(4) of the Income Tax Regulations for the definition), zero-emission vehicles (ZEVs), zero-emission passenger vehicles (ZEPVs) and other eligible zero-emission automotive equipment and vehicles that become available for use in the year. In this chart, ZEVs represent zero-emission vehicles, zero-emission passenger vehicles and other eligible zero-emission automotive equipment and vehicles. An AIIP is a property (other than a ZEV) that you acquired after November 20, 2018, and that became available for use before 2028. A ZEV is a motor vehicle included in Class 54 or 55 that you acquired after March 18, 2019, and that became available for use before 2028, or eligible zero-emission automotive equipment and vehicles included in Class 56 acquired after March 1, 2020, and that became available for use before 2028. For more information, see Guide T4002.

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Footnote 7

For properties available for use before 2026, the relevant factors are 1 1/2 (Classes 43.1, 54 and 56), 7/8 (Class 55), 1/2 (Classes 43.2 and 53), and 0 for any remaining AIIPs not listed in this note.

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Footnote 8

If, in the year, you disposed of a property that you used for both personal and business use, and your business use of that property changed from year to year, you must subtract any remaining personal part of this property's cost from the UCC at the end of the year. For more information, see "Special situations" in Chapter 4 of Guide T4002.

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2025-06-05

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Example – Calculation of capital cost allowance on form T2125

Example

Forms and publications

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