QUOTE (thomasbeyer2000 @ Feb 25 2009, 09:31 PM) use an educated guess .. or look at your appraisal which often breaks it out ! What would the land be worth in its current zoning without a property on it ? 10% of assessment ? 2% ? 25% ? 90% ?It depends on location, age, condition .. in some choice locations in Vancouver the land is 100% of the property value .. in some SK towns the land is worth zilch .. so it depends ..
Be aware that the CCA will have to be paid back later .. thus it allows you to bring income to 0 .. so don`t use more than that as it doesn`t buy you anything .. you can use up to 4% annually, 2% in year 1 !
Well, I don`t have an appraisal done for the property. So I guess I have to take an educated guess?
Built in 1998
low-rise walk-up condo
830sq
It`s hard to calculate land value for an apartment style condo. This is my first year doing tax for this property.
Should I just allocate like 90% building value since it is a condo?
By the way, I understand CCA can only be used to reduce net income (can`t create further loss). But why do I have to pay it back later? When I sell the property?
Does this mean that if I use CCA and depreciate the asset, then when I resell the property, I have to claim the capital gain on the "building" appreciation?
ie. say 200,000 purchase price, 90% building value at $180,000, depreciate 4% for 5 years = 140,000 (roughly at year 5)
So if I sell the property for $230,000 (90% building = 207,000; 207,000 - 140,000 = 67,000 capital gain on the building?)
Am I interpreting this wrongly?
Thank you in advance Thomas!!
