Troubleshooting Memo T22019-002 – Capital Cost Allowance (CCA) Workchart – Incorrect calculation of the 60% additional CCA (Québec) when a property entered on the Additions and Dispositions Workchart qualifies for the additional CCA of 30%

  • Article Type: Problem Resolution
  • Last Modified: 2019-06-12

Symptoms

For a CCA class 50 or 53, the program considers property acquired in the taxation year that qualifies for the additional CCA of 30% in Québec (targeted property) in the calculations of the following lines in respect of the additional CCA of 60% when it should not: 
  • Capital cost of qualified property acquired after December 3, 2018 but before July 1, 2019, that became available for use in the current taxation year and that is not accelerated investment incentive property 
  • Capital cost of qualified property acquired after December 3, 2018 but before July 1, 2019, that became available for use in the current taxation year and that is accelerated investment incentive property 
This problem causes a greater amount of additional CCA of 60% to be claimed.

These lines should only be completed when a qualified property is acquired after December 3, 2018, and before July 1, 2019, and one of the following conditions applies:
  • The property is acquired in accordance with an obligation in writing entered into not later than December 3, 2018;
  • The construction of the property by or on behalf of the taxpayer had begun on December 3, 2018.
In this situation, the property is not a targeted property and its capital cost is included in the calculation of the additional CCA of 60% and not 30%.

Environment

Corporate Taxprep Classic 2019 v.1.0
CCH iFirm Tax 2019 v.1.0
 

Cause

This problem occurs in a copy of CCA class 50 or 53 that is not a separate class used solely for the Québec income tax return (non-targeted property) when the following conditions are met:
  • The corporation has a permanent establishment in Québec;
  • The corporation’s taxation year ends after December 3, 2018;
  • This is a CCA class 50 or 53 that is not a separate class used solely for the Québec income tax return;
  • A property, acquired after December 3, 2018, in the taxation year, is entered in one copy of the Additions and Dispositions Workchart corresponding to a copy of the Capital Cost Allowance (CCA) Workchart for a CCA class 50 or 53.
 
  • For this property, the answer to the question Is the property a property that qualifies for the additional CCA of 30% in Québec? is Yes and a separate CCA class for Québec has been created for it.

The CCA class therefore includes both targeted property and non-targeted property. For more information on how to manage this situation, consult the Additional CCA of 30% in Québec section under the Schedule 8, Capital Cost Allowance (CCA) help topic.

Corporate Taxprep Classic

Schedule 8 Workchart ADD

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Schedule 8 Workchart 

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CCH iFirm Tax T2

Schedule 8ADD

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Schedule 8CCA

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Resolution

When an amount is calculated on the following lines:
  • Capital cost of qualified property acquired after December 3, 2018 but before July 1, 2019, that became available for use in the current taxation year and that is not accelerated investment incentive property 
  • Capital cost of qualified property acquired after December 3, 2018 but before July 1, 2019, that became available for use in the current taxation year and that is accelerated investment incentive property
  1. If all the property acquired after December 3, 2018, in the taxation year are qualified property for the additional CCA of 30% in Québec, enter 0 using an override.
  2. When only part of the property acquired after December 3, 2018 in the taxation year are qualified property for the 30% additional CCA in Québec:
 
  1. For property that is not targeted property, separately add the amount displayed on the line Québec – Adjusted capital cost for each of these property for which the answer to the question Is the property a property that qualifies for the additional CCA of 30% in Québec? in the Additions and Dispositions Workchart is:
 
  1. No
  2. Yes
 
  1. Enter, using an override, the amount calculated:
 
  1. On 1a, on line Capital cost of qualified property acquired after December 3, 2018 but before July 1, 2019, that became available for use in the current taxation year and that is not accelerated investment incentive property;
  2. On 1b, on line Capital cost of qualified property acquired after December 3, 2018 but before July 1, 2019, that became available for use in the current taxation year and that is accelerated investment incentive property.

Corporate Taxprep Classic

Schedule 8 Workchart

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CCH iFirm Tax T2


Schedule 8CCA

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Additional Information

Note: You can use the client filter and diagnostic template to identify the Corporate Taxprep Classic 2018 files affected by this problem. To learn how to install this template, consult the article How to install the client filter and diagnostic template.

This problem will be corrected in Corporate Taxprep Classic 2019 v.1.1 and CCH iFirm Tax T2 2019 v.1.1.

 
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  Attachments
 Solution Id Troubleshooting-Memo-T22019-002-Capital-Cost-Allowance-CCA-Workchart-Incorrect-calculation-of-the-60-additional-CCA-Québec-when-a-property-entered-on-the-Additions-and-Dispositions-Workchart-qualifies-for-the-additional-CCA-of-30
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