Fishing income - Capital Cost Allowance (CCA)

What’s in this article?

 

What is this?

Capital Cost Allowance (CCA) is a deduction that you can claim over a period of several years for the cost of depreciable property that you bought to use in your business. If you have bought depreciable property, such as a boat, equipment, or furniture, for your fishing business during the year, you cannot deduct the full cost of the property from your fishing income for the year. The cost of the depreciable property must be claimed over time as they become obsolete.

Canada Revenue Agency (CRA) says…

You can usually claim CCA on a property only when it becomes available for use.

Available for use – generally, the earlier of:

  • the time the property is first used by the claimant to earn income; and
  • the time the property is delivered or is made available to the claimant and is capable of producing a saleable product or service.

You do not have to claim the maximum amount of CCA in any given year. You can claim any amount you like, from zero to the maximum allowed for the year. If you do not have to pay income tax for the year, you may not want to claim CCA. Claiming CCA reduces the balance of the class by the amount of CCA claimed. As a result the available CCA for future years will be reduced.

In the year you acquire a depreciable property, you can usually claim CCA only on one-half of your net additions to a class.

The amount of CCA you can claim depends on the type of depreciable property and when you bought it. Depreciable property is grouped into classes and a specific rate of depreciation applies to each class. Click this link for more information on each class.

Note: If your fiscal period this year was less than 365 days, then you will have to prorate your CCA claim.

 

Am I eligible?

You can claim CCA on depreciable property that you bought for use in your fishing business on your T2121: Statement of fishing activities form.

Note: Even if you are not claiming CCA for the tax year, we recommend that you enter details of any new depreciable property bought in the year on this form.

 

Where do I claim this?

 Follow these steps in H&R Block’s tax software to file your 2015 taxes:

  1. Click the PREPARE tab.
  2. Click the YOUR YEAR IN REVIEW icon. You will find yourself here:
  3. Click the checkbox labelled I worked for myself and select the province or territory of your self-employment.
  4. Scroll to the bottom of the page and click Continue.
  5. Click the EMPLOYMENT icon. You will find yourself here:
  6. Under the BUSINESS AND SELF-EMPLOYMENT section, click the checkbox labelled Statement of fishing activities (T2121).
  7. Scroll to the bottom of the page and click Continue.

When you arrive at the page for Fishing income, enter your CCA information in Area A - Calculation of capital cost allowance claim of the form.

 

Where can I learn more?