When a business receives an investment tax credit as a result of making a capital expenditure, the amount of the credit must be deducted from the UCC of the capital expenditures class in the taxation year in which the credit is received.

Question

Quizplus · Accepted Answer

The amount of the investment tax credit is not deducted from the UCC of the capital expenditures class. Instead, it is treated as a reduction in the cost of the asset and is used to reduce the amount of the capital cost allowance claimed in subsequent years.

When a Business Receives an Investment Tax Credit as a Result