Property rules apply equally to self-employment as a self-employed person owns property used in the business active manner by the business or in a rental (passive use)
Here's what another accountant said:
"To the best of my knowledge, there is nothing in the CICA Handbooks that dictates or even suggests an appropriate capitalization policy or a depreciation policy. These have historically been matters for professional judgement and would normally take into account concepts like materiality and the size of the company.
In fact, arguably, the concept of a capitalization threshhold goes against all the rules in the CICA handbook and is done as an administrative convenience only by accountants where the amounts are not considered to be material. It has been a few years since I looked at the handbook on these issues and it is possible that it may have changed since I last looked at it, but I just took a quick look and didn't find anything.
As a bookkeeper, I would normally talk to the company's accountant and run these issues by him or her so that we are both on the same page.
With respect to depreciation policy, if the company is small and the amounts not material, some accountants will just follow the tax treatment if there is an argument to to made that the difference would not be material.
Hope this helps."
Gordon Holley, CA, CFP, CPB
BeanKeepers (Canada) Bookkeeping Franchise Company
They don't make it easy for you, but CCH Preparing your Income Taxes 886t.12 says that printers under $10,000 and printers under $100,000 fall into Class 45/50/52 and large printers costing over $100,000 are Class 8 rather than Class 45.
If you've put something in the wrong class, it's possible to re-classify the asset. There's a process for re-classification found in CCH 871 where there are several pages of technical examples. See ITA 13(5),(6) 52; IT190R2.
Cost minimum increased from $200 to $500 May 1, 2006
Class 10 30%
General Purpose electronic data-processing equipment and systems software acquired before March 23, 2004
Class 12 100%
Cost limit increased from $200 to $500 May 1, 2006
Includes computer software (not systems software)
The half year rule applies to some Class 12 items and not others
Class 45 45%
Computer equipment and software systems acquired after March 22, 2004
Class 46 30%
Data network infrastructure and systems software for equipment acquired after March 22, 2004 (usually Class 8)
Class 50 55%
General purpose computer equipment and systems software acquired after March 18, 2007 not used principally as electronic process control, communications control or monitor equipment and systems software related to such equipment and data handling equipment not ancillary to general purpose computer equipment
Class 52 100%
Jan 27, 2009 to Feb 1, 2011
Computer Equipment & Systems Software - 100%
Half year rule will not apply
Must not be a change in use or reverts to Class 50 above
27. Refer to the current version of the following bulletins (listed alphabetically by subject) for information on CCA claims regarding particular types of property:
Certified Feature Productions and Certified Short Productions
Class 8 property
"Construction" - Meaning of
Contractor's moveable equipment
Disposition of depreciable property
Elections under Regulation 1103
Gas and oil exploration and production equipment
Industrial mineral mines
Manufacturing and processing machinery and equipment
Multi-unit residential buildings
Partial disposition of property
Patents, franchises, concessions and licences
Pollution control property
Radio and television equipment
Recapture and terminal loss
Rental properties - $50,000 or more
Rental properties - restrictions
Taxation year of individuals
Transferred and misclassified property
Video tapes, films, computer software and master recording tapes
28. In certain circumstances, the capital cost of depreciable property may be determined or altered by special provisions in the Act. The following list indicates some of these provisions and the interpretation bulletins currently issued that provide details of their application:
Description of provision discussed in bulletin
Transferred property or misclassified property
Passenger vehicle cost in excess of $20,000
Receipt of inducements or other forms of assistance
Expenses of representation
Capital cost allowance - depreciable property
Conversion of property to and from inventory
Cost of clearing or levelling land
Election to capitalize cost of borrowed money
Replacement property, expropriation of property
Property acquired in "non-arm's length" transaction
Property acquired as a gift or from inheritance
Transfer of property to a spouse
Debtors gain on settlement of debt
Transfer of property to a corporation
Distribution of property on cessation of partnership
Property distributed by trust to a capital beneficiary
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