Claim CCA furnitures for rental property, questions about how to fill box for T776 form

[szysagittar]

Hi, sorry it is my first time to rent property, I am trying to claim depreciation for rental property for 2020. I have questions with the tax return report generated with my input, please help.

 

for testing purpose example, if I have a bed frame furniture I bought for $200 with my rented apartment.

In CCA page, I input like this below

[1] I added one page with Class8,

[2] filled the box "Opening balance of the UCC" with $200

[3] filled purchase date

[4] filled description and amount of captial additions(other than AIIP) with $200

like above, but the entry generate in T776 below I could not understand,

 

//question 1

from the T776 form generated,

in Area A, the column 13, it becomes 400, i know it looks not correct, but I dont know how should I fill that previous interview form Class 8 to correct this area, which box I should fill? Please advice

 

//question 2

from the T776 form generated,

in Area B, it filled the equipment addition in the year, but I also know there is a "half-year rule" that I can usually claim CCA only on one-half of my net additions to a class, does that mean I purchase this bed frame for $200 and I can only input 100?, and in which box?

 

//question 3

Because I only rented my apartment for 2 months in 2020, it was a rental loss, based on CRA's topic, limits on CCA, I cannot use CCA to create a rental loss, then my question is,

[1] it means I can only claim CCA in 2021 tax return report right?

[2] then my furniture become 1 years old, how can I input my bed frame in my 2021 CCA Claim? still input $200 ?

 

 

Please advice, thank you very much in advance !

Kind regards,

[TheTaxSmith]

Hello szysagittar.

You don't enter current acquisitions in the opening UCC, so remove it and leave your other entries as they are.

Once you do that review the schedule and all should be good.

The ending UCC will get carried to your 2021 Ufile as an opening UCC.

That said CRA will usually allow a write off expense where the item costs less than $500.

[szysagittar]

7 hours ago, TheTaxSmith said:

Hello szysagittar.

You don't enter current acquisitions in the opening UCC, so remove it and leave your other entries as they are.

Once you do that review the schedule and all should be good.

The ending UCC will get carried to your 2021 Ufile as an opening UCC.

That said CRA will usually allow a write off expense where the item costs less than $500.

Hi, Thank you very much for your in time reply.

I see!

I am still not clear about my second question, because of the "half-year rule", I should input $100, or $200 which was the purchased price?

Thanks again,

Kind regards

[TheTaxSmith]

7 hours ago, TheTaxSmith said:

Hello szysagittar. You use the $200 amount. The software would have used the half year rule to determine the correct CCA claim had you not been in a rental loss position.

 

[szysagittar]

9 minutes ago, TheTaxSmith said:

 

Ah! I see, thank you very much for your advice! really appreciate it!

[najamsoc]

Thanks a lot for the info! I hope the rules haven’t changed since the last year because I was also wondering how I should register the money I spent on the new property in the house I rent.
I have lived here for 7 months already, and the house didn’t have enough chairs. I bought them myself, considering that I plan to live here for at least some more years. Actually, I like the house a lot, and I even think I might buy it from the owner. I don’t know whether it’s a good idea and have to ask a Mortgage Broker Bristol about that.
Anyways, thanks for the tax help!

[Geo123]

Hello najamsoc,

By "register the money I spent", I assume you mean report Expenses and Capital Costs.

T776  Rental Expenses:
(1.)
Enter your income and expenses in *relation* to this property.  eg. maintenance, management fees, municipal taxes
If you used the services of a professional contractor to repair your building, use the sub-section "Labour costs" to enter the relevant information.
Please make sure in this subsection that the amount of repair has not already been entered in the expenses beforehand: make sure to choose the appropriate option from the drop-down menu for the line "Do you wish to add these labour costs as an expense on the income statement".
If you want to claim depreciation for your property, click on the "CCA" sub-section and select the appropriate class, usually Class 1.
(2.)  Capital costs - Repairs / Additions
If you have made repairs to your rental property, you must determine whether it is a capital or current expense.
We invite you to consult the CRA guide T4036 at the following link:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4036.html
If you have determined that this is a capital expenditure, please follow these steps:
1. On the "Left-side menu on the Interview tab", select the heading "Rental property income".
2. On this section, go to the sub-section entitled "CCA", which already contains the information on your building.
3. On the line for "Description and amount of capital additions", in the first field, enter the description of the item, then enter the amount of  it.
4. On the line for "Application of the half-year rule to the current year's additions", select the option that corresponds to the situation.