CCA Form seems to be incorrect when property is split over two or more owners

[AndyJ]

The CCA form seems to be calculating incorrectly. My wife and I split own a property 50/50, but the CCA schedule calculates column 18 as only 2% versus the Class 4%. That's fine in as far as my CCA is 1/2 of the class amount, but Column 19 is updated as Column 7 minus Column 18, which means that the opening balance next year is incorrect.

The proper way would be to show Column 18 as 4% of Column 16, with another box below showing my 50% share.

[Geo123]

Hello AndyJ,

The CCA schedule format for : "Area A – Calculation of capital cost allowance (CCA) claim" is per CRA rules - we can not modify the schedule.  The partner split is reflected on "Total capital cost allowance claim for the year (amount ii from Area A) [9936]  [amount$].  The carryforward of the CCA is correct.

Example :

>>

[AndyJo]

On 2/22/2024 at 4:53 AM, Geo123 said:

Hello AndyJ,

The CCA schedule format for : "Area A – Calculation of capital cost allowance (CCA) claim" is per CRA rules - we can not modify the schedule.  The partner split is reflected on "Total capital cost allowance claim for the year (amount ii from Area A) [9936]  [amount$].  The carryforward of the CCA is correct.

Example :

>>

This doesn't make sense to me on my return.

1. Column 16 shows $78,378

2. Column 17 shows 4%

3. Column 18 shows $1,937 (which is 2.47% of $78,378, 4% would be $3,135)

4. The net income is $3,874.87, half of which is $1,937.44 for my 50% share of the property, hence the max CCA that I could possibly claim is $1,937.44 per the CCA form and as shown on line 9936.

Here are the problems:

1. Both my return and my wife's return show a CCA deduction against "our share" of the net income of $1,937.44, so double that would be $3,874.87, but that means a total CCA claim of $3,874.87 which exceeds 4% of $78,378 ($3,135), so it appears that we would be claiming more CCA than we are allowed, except:

2. Last year we weren't able to claim a CCA of $1,548 as we had a net loss, so if this was added to our CCA this year I could see a total CCA claim of $3,135 + $1,548 = $4,683, but as our net income was only $3,874.87 we could only claim a CCA = to net income. So I understand the CCA amount now makes sense, but:

3. Column 19 shows a balance of $77,394 ($79,331-$1,937), whereas in fact it should be $79,331-$1,937 x 2 = $75,457, counting both mine and my wife's CCA deductions, as Column 19 should become Column 2 next year.

It seems to me that the CCA form should be for the whole property with the ii value being adjusted on the main tax form to account for my 50% share of the property, which is not the case on mine and my wife's returns right now.

So to summarize:

1. My line 9936 is the same as line ii, which does not match what you show above considering my 50% share.

2. Column 18 should show 4% of column 16 plus any carryover for unused CCA from last year, or net income from this year, whichever is the lesser. Currently it is showing 50% of the value it should show.

3. Column 19 does not reflect the correct UCC considering both mine and my wife's CCA deductions per line 9936 on our respective returns.

[AndyJo]

On 2/22/2024 at 4:53 AM, Geo123 said:

Hello AndyJ,

The CCA schedule format for : "Area A – Calculation of capital cost allowance (CCA) claim" is per CRA rules - we can not modify the schedule.  The partner split is reflected on "Total capital cost allowance claim for the year (amount ii from Area A) [9936]  [amount$].  The carryforward of the CCA is correct.

Example :

>>

1. My return shows both line ii and line 9936 as the same value, despite my 50% ownership.

2. My wife's return shows the same.

3. Column 18 shows CCA calculated as 2.47% of column 16, whereas I believe it should reflect either 4% of column 18 plus unused CCA from last year (due to a net loss that year) or a limiting value of this year's net income, whichever is less.

4. As I believe that column 19 becomes column 2 next year, it should reflect column 7 minus the total CCA deducted (i.e. both mine and my wife's deductions).

As Column 18 implies equal to or less than Col 16 x col 17 I'm not sure how a CCA carryover from a previous year is to be handled in the form, but right now the form is INCORRECT with regards to what should be happening.

[AndyJ]

14 minutes ago, AndyJo said:

1. My return shows both line ii and line 9936 as the same value, despite my 50% ownership.

2. My wife's return shows the same.

3. Column 18 shows CCA calculated as 2.47% of column 16, whereas I believe it should reflect either 4% of column 18 plus unused CCA from last year (due to a net loss that year) or a limiting value of this year's net income, whichever is less.

4. As I believe that column 19 becomes column 2 next year, it should reflect column 7 minus the total CCA deducted (i.e. both mine and my wife's deductions).

As Column 18 implies equal to or less than Col 16 x col 17 I'm not sure how a CCA carryover from a previous year is to be handled in the form, but right now the form is INCORRECT with regards to what should be happening.

That said, the numbers used in the main tax form are correct.