Column 7 – Undepreciated capital cost after additions and dispositions

The undepreciated capital cost (UCC) amount for column 7 is the initial UCC amount at the start of the year in column 2 plus the cost of additions in column 3 minus the proceeds of dispositions in column 5.

You cannot claim capital cost allowance (CCA) when the amount in column 7 is either:

• negative (see Recapture of CCA)
• positive, and you do not have any property left in that class at the end of the current fiscal period (see Terminal loss)

In either case, enter "0" in column 19, UCC at the end of the year.

Recapture of CCA

If the amount in column 7 is negative, you have a recapture of CCA. Include your recapture on line 8230, Other income, in Part 3C of Form T2125, Statement of Business or Professional Activities.

A recapture of CCA can happen if the proceeds from the sale of depreciable property are more than the total of:

• the undepreciated capital cost of the class at the start of the period
• the capital cost of any new additions during the period

A recapture of CCA can also occur, for example, when you get a government grant, or claim an investment tax credit.

In some cases, you may be able to postpone a recapture of CCA. For example, you may sell a property and replace it with a similar one, someone may expropriate your property, or you may transfer property to a corporation, a partnership, or your child.

Terminal loss

If the amount in column 7 is positive and you no longer own any property in that class, you may have a terminal loss. More precisely, you may have a terminal loss when, at the end of a fiscal period, you have no more property in the class but still have an amount which you have not deducted as CCA.

You can usually subtract this terminal loss from your gross business or professional income in the year you disposed of the depreciable property. Enter your terminal loss on line 9270, Other expenses, in Part 4 of Form T2125.

Forms and publications

• Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income
• Income Tax Folio S3-F4-C1, General Discussion of Capital Cost Allowance