Personal use of property
If you buy property for both business and personal use, you can calculate the business use of the property.
Jeremy owns a financial consulting business. He bought a car in 2017 for personal and business use. The car cost $20,000, including all charges and taxes. He includes the car in Class 10. His business use this year was 12,000 kilometres of the total 18,000 kilometres driven. He calculates his CCA on the car for 2017 as follows:
- Cost of additions = $20,000
- CCA rate for Class 10 = 30 %
- adjustment for current year additions is $ 20,000 divided by 2 = $10, 000
- Base amount for CCA = $10,000
- Base amount for CCA $10,000 multiplied by 30% = $3,000
- Capital cost amount for the year = $3,000
Jeremy used his car partly for personal use, he calculates his CCA for business use as follows:
(12,000 (business kilometres) ÷ 18,000 (total kilometres)) × $3,000 = $2,000
The capital cost limits on a Class 10.1 vehicle (a passenger vehicle) still apply when you split the capital cost between business and personal use.
Changing from personal to business use
If you bought a property for personal use and started using it in your business in your current fiscal period, there is a change in use. You need to determine the capital cost for business purposes.
When you start using your property for business use, you are considered to have disposed of it. If the FMV of the property is more than its cost, you may have a capital gain.
Capital Cost Calculation
Actual cost of the property
FMV of the property
Amount on line 1
Line 2 minus line 3 (if negative, enter "0")
Enter any capital gains deduction claimed for the amount on line 4Footnote 1
Line 4 minus line 5 (if negative, enter "0")
Capital cost: line 1 plus line 6
We consider you to acquire the land for an amount equal to its FMV when you change its use.
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