A firm has recently purchased Class 10 equipment for $100,000 with a CCA rate of 30%. Under the half-year rule, what is the amount of depreciation that the firm can claim as a tax-deductible expense in the second year?

Question

Quizplus · Accepted Answer

In the first year, due to the half-year rule, the firm can claim 30% of $100,000 / 2 = $15,000. For the second year, the undepreciated capital cost is $85,000 ($100,000 - $15,000), and the firm can claim 30% of $85,000 = $25,500.

A Firm Has Recently Purchased Class 10 Equipment for $100,000