Depreciation Rates Class 1, 3, and 8

Questions and Answers

What is the CCA rate for Class 1 buildings bought after 1987 until including 2007?

4% (correct)

10%

What is the CCA rate for buildings bought before 1988?

What type of assets does Class 8 cover?

Various machinery, equipment, and furniture

Which of the following items are included in Class 10?

Vehicles costing $30,000 or less Signup and view all the answers

Class 10.1 is designated for __________ vehicles costing more than $30,000.

passenger luxury Signup and view all the answers

What is the CCA rate for computer software under Class 12?

100% Signup and view all the answers

What is the method of depreciation for leasehold improvements under Class 13?

Straight line Signup and view all the answers

What type of assets does Class 14 cover?

Limited life intangible assets Signup and view all the answers

What is the CCA rate for Class 14.1 assets?

5% Signup and view all the answers

Class 16 has a CCA rate of __________.

40% Signup and view all the answers

What is the CCA rate for patents with a useful life greater than or equal to 4 years under Class 44?

25% Signup and view all the answers

Which class includes computer hardware and system software acquired after January 31, 2011?

Class 50 Signup and view all the answers

Study Notes

Class 1

Depreciation rates: 4%, 6%, and 10% based on the purpose of the building.
Applicable to various structures including buildings, bridges, and tunnels.
4% rate for buildings acquired after 1987 until 2007.
5% for buildings bought before 1988 which fall under Class 3.
Electing Class 1 after 2007 for commercial buildings.
6% rate for buildings used 90% for commercial purposes (excluding manufacturing).
10% rate for buildings used 90% for manufacturing and processing goods.
Rental buildings costing $50,000 or more must be in a separate Class 1.
Land itself is not depreciable.

Class 3

Depreciation rate of 5%.
Contains buildings acquired before 1988 and various structures like breakwaters and docks.
Rental buildings costing $50,000 or more must be in a separate Class.

Class 8

Depreciation rate of 20% for machinery, equipment, and furniture.
Covers various items such as electrical equipment and outdoor advertising signs.
Tools costing $500 or more are included.
Office equipment exceeding $1,000 can be elected for a separate class.

Class 10

Depreciation rate of 30% for vehicles costing $30,000 or less.
Includes trucks, trailers, buses, and mining equipment.
Covers portable equipment used in construction.

Class 10.1

Depreciation rate of 30% for passenger luxury vehicles costing over $30,000.
CCA limit set at $30,000.
Each luxury vehicle must be assigned to a separate Class 10.1.
No terminal loss or recapture allowed.

Class 12

100% depreciation for computer software and certain small asset categories.
Excludes system software, covers books, kitchen utensils, and dental instruments.
Includes tools costing less than $500.

Class 13

Straight line method for leasehold improvements and renovations.
Maximum deduction determined by the lesser of 1/5 of capital cost or capital cost divided by lease term.

Class 14

Straight line amortization for limited-life intangible assets.
Covers copyrights, franchises, and licenses with limited valid periods.

Class 14.1

Intangible assets with unlimited life are assessed.
New rules as of 2017 include 100% additions and dispositions with 5% CCA.
1/2 year rule applies with no terminal losses for ongoing businesses.
Goodwill and other unlimited life intangible assets do not require separate classes.

Class 16

Depreciation rate of 40% for taxis and coin-operated video games.

Class 44

25% depreciation for patents with a useful life of four years or longer.

Class 50

55% depreciation for computer hardware and system software acquired after January 31, 2011.
Includes smartphones and tablets; basic cellphones fall under Class 8.

Description

Test your knowledge on the different depreciation rates for various classes of buildings and equipment. This quiz covers Class 1, Class 3, and Class 8 depreciation guidelines and their applicable rates. Understand the specific criteria for each class and the implications for commercial and rental structures.