One can continue to earn CCA tax shields from an asset sold from an existing pool if:
A)UCC is positive and greater than salvage
B)Salvage is positive
C)The present value of the tax shields is negative
D)The tax bracket is greater than 50 percent

Question

Quizplus · Accepted Answer

If the Undepreciated Capital Cost (UCC) is positive and greater than the salvage value, then the asset still has tax shield value that can be claimed through the Capital Cost Allowance (CCA) process. This allows for continued tax savings even after the asset has been sold from the existing pool.

One Can Continue to Earn CCA Tax Shields from an Asset