Capital cost allowance (CCA) – Partnership

A partnership can own depreciable property and claim capital cost allowance (CCA) on it. Individual partners, however, cannot claim CCA on property the partnership owns.

The partnership can deduct CCA on the depreciable property it owns, to the extent allowed under the Regulations. The partnership can deduct CCA up to the maximum available for the fiscal period, or it can deduct none at all. Generally, if a fiscal period is less than 12 months, you have to prorate the deduction based on the number of days in the fiscal period.

If the partnership's activities include a rental operation, some restrictions apply to the amount of CCA the partnership can claim for the rental assets. 

From the capital cost of depreciable property, subtract any investment tax credit allocated to the individual partners. We consider this allocation to be made at the end of the partnership's fiscal period. You also reduce capital cost by any type of government assistance.

Box 040 of your Form T5013, Statement of Partnership Income will show the amount of CCA the partnership claimed on your behalf. This amount has already been deducted from the Business income in box 116 or the Professional income in box 120 of the T5013 slip. Do not deduct this amount again.

Any taxable capital gain or recapture from the sale of property the partnership owns is income of the partnership.

Also, any allowable capital or terminal loss from the sale of partnership-owned property is the loss of the partnership.

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