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Can CCA expenses be claimed?

Expert: Michael Fromstein

Edna asked:

I have two unlimited businesses, one is active but one is not. I have not said that the non-active one is final. There are some assets that are depreciating each year. Can this CCA expense be claimed?

Michael Fromstein answered:

I am not sure what not being final refers to. It appears that you are not carrying on that business and likely have no intention to resume doing so. If that is the case, there are issues about what is being done with the assets. That is, are they by nature useable for personal benefit, are you paying for storage some place?

For someone to claim business expenses, and that includes CCA, there must be a business. If you sold the assets when you ceased operation, then there would be a "terminal loss" to the extent your proceeds were less than the tax value. If the sale is to a related party, there are "stop loss" rules.

About the author

Michael Fromstein is a tax specialist with Integrated Professional Specialist Services.

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