Self employed Business Case Studies
CRA reference:
https://solidtax.ca/wp-content/uploads/2022/09/t4002-21e-Self-employed.pdf
Self employed Business Case Studies: CCA for vehicle
Example: Vivienne owns a business. On June 21, 2021, she bought two passenger vehicles that are only driven to earn a business income. The HST rate for her province is 13%. Vivienne kept the following records for 2021:
| Cost | HST | Total | |
| Vehicle 1 | $33,000 | $4,290 | $37,290 |
| Vehicle 2 | $28,000 | $3,640 | $31,640 |
Vivienne puts vehicle 1 in Class 10.1 (30%), since she bought it in 2021 and it cost her more than $30,000. Before Vivienne enters an amount in column 3 of Area B, she must calculate the HST on $30,000. She does this as follows:
• HST at 13% of $30,000 = $3,900
Therefore, Vivienne’s capital cost is $33,900 ($30,000 + $3,900).
Vivienne puts vehicle 2 into Class 10 (30%), since she bought it in 2021 and it did not cost her more than $30,000. Vivienne’s capital cost is $31,640 ($28,000 + $3,640).
Vehicle 1 Depreciation Expenses (year 1): $37,290 x 30% = $11,187
• Undepreciated Capital Cost = $37,290 – $11,187 = $26,103
Vehicle 2 Depreciation Expenses (year 1): $31,640 x 30% = $9,492
• Undepreciated Capital Cost = $31,640 – $9,492 = $22,148
Total Depreciation Expense deductible for year 1: $20,679
Vehicle 1 Depreciation Expense (year 2): $26,103 x 30% = $7,830.90
• Undepreciated Capital Cost = $26,103 – $7,830.90 = $18,272.10
Vehicle 2 Depreciation Expenses (year 2): $22,148 x 30% = $6,644.40
• Undepreciated Capital Cost = $22,148 – $6,644.40= $15,503.60
Total Depreciation Expense deductible for year 2: $14,475.30
