Immediate expensing of depreciable properties - Part 2

Designation of immediate expensing property

As mentioned in the previous blog article, in order to claim the immediate expensing incentive, you must designate the property of the incentive in prescribed form. On the federal side, for all eligible persons or partnerships (EPOPs), the designation is done by indicating the portion of the additions in the year (column 3 of the CCA table) that is designated for the incentive (or DIEP) under a new column of the CCA table, column 4.

For Quebec, new forms have been added in order to designate the added properties for the incentive, the TP-130.AD (personal tax return) and CO-130.AD (corporate/partnership returns). The existing CCA tables remain unchanged.

Calculation of CCA with immediate expensing and accelerated investment incentives

The calculation of CCA including both the immediate expensing and accelerated investment incentives can be summed up in the table below (with dispositions and additions):

Note 1: If the calculation is for an individual or a partnership, you cannot create a business loss using immediate expensing [ITR 1104(3.1)]. Therefore, the amount of CCA claimed from immediate expensing is further limited by the net income of the business before factoring the CCA expense.

Note 2: The immediate expense limit of $1.5 million must be shared amongst the associated EPOPs.

Note 3:

Note 4: The Accelerated investment incentive is still applicable until 2027 and can be claimed on any leftover UCC that did not benefit from immediate expensing. The accelerated rate incentive is triple (200%) the amount of CCA claimable in the first year [ITR 1100(2)].

Associated EPOP agreement for the limit

As mentioned in the previous blog article, eligible persons or partnerships (EPOPs) have to share the 1.5 million immediate expensing limit [ITR 1104(3.2) & ITR 1104(3.6)]. The allocation of the limit between the associated EPOPs must be declared to the CRA and to Revenu Québec (if applicable).

On the federal side, for individuals, the allocation is declared under a new section of the T2125 form, Section G. For corporations and partnerships, it is declared in the first section of Schedule 8. For Quebec, two new forms have been added, the TP-130.EN for individuals and the CO-130.EN for corporations and partnerships.