Calculating Capital Cost Allowance

[Goodstuff]

This year I made a profit on my properties (didn`t do enough upgrades/repairs to offset the income) and now want to calculate Capital Cost Allowance to bring my profit to zero.

But to calculate CCA I am supposed to separate the cost of the building (a house or a condo) from the cost of the land.
Has anyone done this? How is it done? When I purchased the properties the land and building costs were never separated. I just bought the house for the price. Period. CRA won`t tell me how to separate them. So how do you do this?

Also, is CCA worth it?

Thanks.

 

[Thomas Beyer]

QUOTE (Goodstuff @ Mar 13 2009, 03:18 AM) This year I made a profit on my properties (didn`t do enough upgrades/repairs to offset the income) and now want to calculate Capital Cost Allowance to bring my profit to zero.

But to calculate CCA I am supposed to separate the cost of the building (a house or a condo) from the cost of the land.
Has anyone done this? How is it done? When I purchased the properties the land and building costs were never separated. I just bought the house for the price. Period. CRA won`t tell me how to separate them. So how do you do this?

Also, is CCA worth it?

Thanks.
You can depreciate the house portion (but not the land portion) for tax purposes up to 4% annually, and 2% in year 1.

Estimate the land cost using commercially reasonable assumptions based on facts or evidence, or absent thereof, common sense.. Sometimes the appraisal states it.

Land portion could be as high as 95% of price for an old tear-down in a prime area of Vancouver to as low as 5% on a big house on the bald and windy prairies in the middle of nowhere.

In most cities land is probably around 20-30% for an "average house" (if there ever is such a thing ...)

 

[Goodstuff]

QUOTE (thomasbeyer2000 @ Mar 13 2009, 10:50 AM) You can depreciate the house portion (but not the land portion) for tax purposes up to 4% annually, and 2% in year 1.

Estimate the land cost using commercially reasonable assumptions based on facts or evidence, or absent thereof, common sense.. Sometimes the appraisal states it.

Land portion could be as high as 95% of price for an old tear-down in a prime area of Vancouver to as low as 5% on a big house on the bald and windy prairies in the middle of nowhere.

In most cities land is probably around 20-30% for an "average house" (if there ever is such a thing ...)


Thank you for your help. I`ll use 20-30% for the house. I imagine a condo would be 100% building, since the land is owned by the condo association?

 

[Thomas Beyer]

QUOTE (Goodstuff @ Mar 13 2009, 02:01 PM) Thank you for your help. I`ll use 20-30% for the house. I imagine a condo would be 100% building, since the land is owned by the condo association?
condo has land portion too .. as you own a portion of the condo association .. land is maybe 10-15% depending on density ..