Tax Deduction on Purchasing a Vehicle

[Greatful]

I`m new here and learning and am going to continue to suck up as much info as I can before I join REIN.A quick question I thought I might run by you other business minded individuals...is the purchase of a vehicle tax deductible if needed for business purposes?Say to purchase a truck to haul around the lawn mower, shop vac, and all the other items needed to look after and renovate properties.I am not quite sure what this means on the gov website.

<LI>The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCAhttp://http://www.fin.gc.ca/scripts/glossary.asp?Lang=E&Term=CCA) purposes will remain at $30,000 (plus applicable federal and provincial sales taxes) for purchases after 2007. This ceiling restricts the cost of a vehicle on which CCAhttp://http://www.fin.gc.ca/scripts/glossary.asp?Lang=E&Term=CCA may be claimed for business purposes.
http://www.fin.gc.ca/news07/07-111e.html


Does this mean the entire price of the vehicle up to $30,000 is tax deductible, or no?

Thank you very much in advance.

P.S. Yeah, it`s time to get an accountant

 

[Greatful]

Anyone?
I figured for sure someone around here would know.

 

[davidcourt]

i believe a percentage of purchased vehicles is wrote off,80% of value or so.
100% of leased vehicle.
but not positive.

 

[George]

QUOTE (Greatful @ Feb 6 2008, 07:25 PM) Anyone?
I figured for sure someone around here would know.

Good evening,

The cap mentioned in your excerpt means that this is the maximum amount of the vehicle cost that is eligible for depreciation. In other words, if the vehicle costs say 40k plus applicable taxes, you could only deduct up to the 30k plus applicable taxes. Your business vs. personal portion will dictate the percentage of the 30k and taxes which you can deduct.

Warm regards...

George

 

[Greatful]

Awesome, thanks guys.
I think your right George.

 

[brentdavies]

Keep a mileage book and the tax man will love you.

 

[Greatful]

QUOTE (brentdavies @ Feb 7 2008, 06:01 PM) Keep a mileage book and the tax man will love you.


Right, gotta remember to start doing that.

 

[GregGillespie]

QUOTE (brentdavies @ Feb 7 2008, 04:01 PM) Keep a mileage book and the tax man will love you.


Absolutely. Charging a flat rate per km and keeping track of that mileage keeps CRA happy and tends to be more straightforward than deducting a % for gas, repairs, etc (besides, in this situation you would need to track non-business mileage too). Also, it is my understanding that a vehicle purchased within the company needs to be predominantly used for business purposes...ie. a contractor.

Greg

 

[ToddStokowski]

Using a flat rate per km. is only acceptable by CRA if the business is operated through a corporation and only under certain circumstances if operating a Real Estate business.

In all other circumstances, the percentage of use method is required and again, only if you meet the criteria set out by CRA.

Todd Stokowski, CA