,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,motor ,vehicle ,exp5ses ,claim$
  0,self-,employ$ ,9dividuals
,numb]3 ,,it-#eba;,r
,date3 ,decemb] #af1 #aiif
,ref];e3 ,p>agraph #ah7#a77a7 7al sec;ns
  #fg1 #fg.b1 #fg.c & #fg.d1 subsec;ns
  #ac7#b71 #bj7#af.a71 &! def9i;ns (
  8pass5g] vehicle10 8automobile0 &
  8motor vehicle0 9 subsec;n #bdh7#a71 &
  p>agraphs #ac7#g77g71 #ac7#g77h71
  #ah7#a77h7 & #he7#a77e4#d7 (! ,9come
  ,tax ,act2 & sec;n #gcjg1 subsec;ns
  #aajj7#b71 #aajj7#b.e7 & #aaja7#a;af71
  subp>agraph #aajj7#a77a77x4#a7 &
  ,class #aj.a ( ,s*$ule ,,ii (! ,9come
  ,tax ,regul,ns74

  ,9t]pret,n bullet9s 7,,it's7 provide
,rev5ue ,canada's te*nical            #a
              ,,it-#eba;,r           a#a
9t]pret,ns ( 9come tax law4 ,due 6_!
te*nical nature1 ,,it's >e us$ prim>ily
0de"p;tal /aff1 tax speciali/s1 & o!r
9dividuals :o h an 9t]e/ 9 tax matt]s4
,= ^? r1d]s :o pref] a less te*nical
explan,n (! law1 ! ,de"p;t (f]s o!r
public,ns1 s* z tax guides & pamphlets4
  ,:ile ! ,,it's d n h ! =ce ( law1 !y c
g5],y 2 reli$ ^u z reflect+ ! ,de"p;t's
9t]pret,n (! law 6be appli$ on a 3si/5t
basis 0de"p;tal /aff4 ,9 cases ": an
,,it has n yet be5 revis$ 6reflect
legislative *anges1 r1d]s %d ref] 6!
am5d$ legisl,n & xs e6ective date4
,simil>ly1 c\rt deci.ns subsequ5t 6!
date (! ,,it %d 2 3sid]$ :5 det]m9+ !
relevancy (! -;ts 9 ! ,,it4
  ,an 9t]pret,n describ$ 9 an ,,it
applies z (! date ! ,,it is publi%$1
un.s o!rwise specifi$4 ,:5 "! is a *ange
9 a previ\s 9t]pret,n &! *ange is
b5eficial 6taxpay]s1 x is usu,y e6ective
= all future assess;ts & reassess;ts4
,if ! *ange is n fav\ra# 6taxpay]s1   #b
              ,,it-#eba;,r           b#a
x w norm,y 2 e6ective =! curr5t &
subsequ5t tax,n ye>s or = transac;ns
5t]$ 96af ! date (! ,,it4
  ,a *ange 9 a de"p;tal 9t]pret,n may al
2 ann\nc$ 9 ! ,9come ,tax ,te*nical
,news4
  ,if y h any -;ts reg>d+ matt]s 4cuss$
9 ? ,,it1 pl1se s5d !m to3

  ,director1 ,busi;s & ,public,ns
    ,divi.n
  ,9come ,tax ,rul+s & ,9t]pret,ns
    ,directorate
  ,policy & ,legisl,n ,bran*
  ,rev5ue ,canada
  #be ,ni*olas ,/reet
  ,ottawa ,,on ,k#a;,a #j;,l#e
  
  ,9t]pret,n bullet9s c 2 f.d on !
,rev5ue ,canada ,9t]net site at3
_+www.rc.gc.ca_:


                                      #c
                 ,3t5ts              c#a
    
,applic,n
,summ>y
,4cus.n & ,9t]pret,n
  ,g5]al 7p>agraphs #a-b7
  ,motor ,vehicle ,exp5ses 7p>agraphs
    #c-h7
  ,eligi# ,l1s+ ,co/ 7p>agraphs #i-aa7
  ,example--,comput,n ( 8,eligi#0 ,l1s+
    ,co/ 7p>agraph #ab7
  ,capital ,co/ ,all[.e 7p>agraphs
    #ac-bj7
  ,9t]e/ 7p>agraph #ba7
  ,jo9t ,[n]s or ,lessees 7p>agraph #bb7
  ,sec;n #he ,rollov] 7p>agraph #bc7
  ,g5]al ,rem>ks 7p>agraphs #bd-bf7
,app5dix
  ,assump;ns
  ,analysis
,explan,n ( ,*anges



                                      #d
               ,applic,n             d#a
    
  ,? bullet9 c.els & replaces ,9t]pret,n
,bullet9 ,,it-#eba dat$ ,augu/ #be1
#aihi4

                ,summ>y
    
  ,subsec;n #i7#a7 provides t a
taxpay]'s 9come f a busi;s or prop]ty is
! pr(it f t busi;s or prop]ty subject 6!
rules 9 ,"p ,i (! ,9come ,tax ,act4
,sec;n #ah 3ta9s s"eal limit,ns 3c]n+ !
deduc;ns p]mitt$4 ,! purpose ( p>agraph
#ah7#a77a7 is 6d5y a deduc;n = all
\tlays & exp5ses except 6! ext5t t !
\tlays or exp5ses >e made =! purpose (
ga9+ or produc+ 9come f a busi;s or
prop]ty4 ,! deduc;n = specific \tlays &
exp5ses is 4cuss$ 9 o!r provi.ns (!
,act4 ,sec;n #fg limits an o!rwise
deducti# am.t 6an am.t t is r1sona# 9 !
circum/.es4
  ,! purpose ( ? bullet9 is 6provide
guidel9es 6a self-employ$ 9dividual   #e
              ,,it-#eba;,r           e#a
:o is eligi# 6deduct exp5ses ( op]at+ a
vehicle 9 -put+ 9come f a busi;s or
prop]ty4 ,! -;t>y 2l 4cusses ! m1n+
--------------------------------------#b
giv5 6v>i\s ^ws & expres.ns1 ! types (
exp5ses t >e deducti# &! proc$ures =
appor;n+ ^? exp5ses 79clud+ capital co/
all[.e7 2t p]sonal & busi;s use4 ,al
4cuss$ >e ! re/ric;ns t apply 6!
deductibil;y ( l1se pay;ts1 9t]e/ &
capital co/ all[.e1 z well z ! types (
use : 3/itute p]sonal use r ?an busi;s
use4
  ,busi;s & ,profes.nal ,9come1 a
supple;t>y 9come tax guide1 3ta9s 4cus.n
& examples t may 2 help;l 6us]s ( ?
bullet94
  ,ref];es 9 ? bullet9 6an 89dividual0
%d 2 r1d z a ref];e 6an 9dividual o!r
?an a tru/4



                                      #f
          ,4cus.n & ,9t]pret,n       a#b
    
        ,g5]al 7p>agraphs #a-b7
    
#a4 ,! t]ms 8pass5g] vehicle10
  8automobile0 & 8motor vehicle0 us$
  "?\t ? bullet9 h "picul> signific.e4
  ,!y >e def9$ 9 subsec;n #bdh7#a7 & c 2
  describ$ z foll[s3
  7a7 a 8pass5g] vehicle0 is an
    automobile 7see ;b 2l7 acquir$ af
    ,june #ag1 #aihg or l1s$ "u a l1se
    5t]$ 9to1 ext5d$ or renew$ af t
    date2
  7b7 an 8automobile0 is
    7;i7 a motor vehicle 7see ;c 2l7 t
      is design$ or adapt$ prim>ily
      6c>ry 9dividuals on hi<ways &
      /reets & t has a s1t+ capac;y = n
      m ?an ! driv] & ei<t pass5g]s1
    b does n 9clude
    7;ii7 an ambul.e1
    7;iii7 a motor vehicle acquir$
      prim>ily = use z a taxi1 a bus us$
                                      #g
              ,,it-#eba;,r           b#b
      9 a busi;s ( transport+ pass5g]s
      or a he>se us$ 9 ! c\rse (a busi;s
      ( >rang+ or manag+ fun]als1
    7;iv7 except =! purpose ( sec;n #f1
      a motor vehicle acquir$ 6be sold1
      r5t$ or l1s$ 9 ! c\rse ( c>ry+ on
      a busi;s ( sell+1 r5t+ or l1s+
      motor vehicles or a motor vehicle
      us$ =! purpose ( transport+
      pass5g]s 9 ! c\rse ( c>ry+ on a
      busi;s ( >rang+ or manag+ fun]als1
      &
    7;v7 a motor vehicle (a type -monly
      call$ a van or pick-up truck or a
      simil> vehicle
      --t has a s1t+ capac;y = n m ?an !
        driv] & #b pass5g]s & t1 9 !
        tax,n ye> 9 : x is acquir$1 is
        us$ prim>ily =! transport,n (
        gds or equip;t 9 ! c\rse ( ga9+
        or produc+ 9come1 or
      --! use ( :1 9 ! tax,n ye> 9 : x
        is acquir$1 is all or sub/anti,y
        all =! transport,n ( gds1     #h
              ,,it-#eba;,r           c#b
        equip;t or pass5g]s 9 ! c\rse (
        ga9+ or produc+ 9come2 &
  7c7 a 8motor vehicle0 is an automotive
    vehicle design$ or adapt$ 6be us$ on
    hi<ways & /reets b does n 9clude
    7;i7 a trolley bus1 or
    7;ii7 a vehicle design$ or adapt$
      6be op]at$ exclusively on rails4
  ,:e!r or n a vehicle is 8acquir$
  prim>ily0 =! /at$ use w 2 decid$ bas$
  on ! facts (! "picul> case4 ,g5],y1 !
  ,de"p;t 3sid]s t ! 8us$ prim>ily0 te/
  w 2 met ": m ?an #ej@3p (! 4t.e
  travell$ 0! vehicle is =! /at$
  purpose4
#b4 ,! -;ts 9 ? bullet9 >e direct$ to
  7a7 a self-employ$ 9dividual :o [ns or
    l1ses a 8motor vehicle0 us$ 0!
    9dividual or an employee (!
    9dividual 6e>n 9come f a busi;s
    79clud+ a profes.n7 (! 9dividual1 &
  7b7 an 9dividual :o is a memb] (a
    "pn]%ip & p]son,y [ns or l1ses a
    8motor vehicle0 6e>n 9come f !    #i
              ,,it-#eba;,r           d#b
    busi;s (! "pn]%ip & :o is n fully
    reimburs$ 0! "pn]%ip = all !
    vehicle's exp5ses t p]ta9 6! busi;s4
  
        ,motor ,vehicle ,exp5ses
            7p>agraphs #c-h7
    
#c4 ,": a 8motor vehicle0 is us$ 0an
  9dividual 9 a tax,n ye> "ply 6e>n
  busi;s 9come & "ply = p]sonal use1 !
  deducti# am.t is norm,y t propor;n (!
  a7regate (!
  7a7 total op]at+ exp5ses 7see #e 2l7
    (! vehicle 9curr$ 0! 9dividual 9 !
    ye>1
  7b7 capital co/ all[.e 7see #ac 6#bj
    2l71 &
  7c7 9t]e/ 7see #ba 2l7
  t ! 4t.e travell$ 0! vehicle 6e>n !
  busi;s 9come is (! total 4t.e travell$
  0! vehicle =! ye>4 ,= example1 ": !
  a7regate ( 7a71 7b7 & 7c7 z describ$
  abv =a ye> is 4#h1jjj &! total 4t.e
  travell$ =! ye> is #cb1jjj         #aj
              ,,it-#eba;,r           e#b
  kilometres ( : #bd1jjj repres5t busi;s
  use1 ! deducti# am.t is 4#f1jjj
  det]m9$ z foll[s3

  4#bd1jjj divid$ 04#cb1jjj multipli$
    04#h1jjj equals 4#f1jjj
  
#d4 ,%d an 9dividual [n or l1se two or m
  8motor vehicles0 us$ "ply = busi;s
  purposes & "ply = p]sonal purposes1 !
  abv calcul,n may 2 appli$ sep>ately =
  ea* vehicle or1 = 3v5i;e1 ! calcul,n
  may 2 appli$ = bo? or all ! vehicles
  tak5 tgr4 ,t is1 ! op]at+ exp5ses1
  capital co/ all[.e & 9t]e/ 7see #e1
  #ac 6#bj & #ba 2l7 = ea* 8motor
  vehicle0 may 2 -b9$ &! deducti# am.t
  det]m9$ on ! basis (! ratio ( -b9$
  4t.e travell$ = busi;s purposes 6-b9$
  total 4t.e travell$1 provid$ ! result
  s det]m9$ is
--------------------------------------#c
  r1sona# & n mat]i,y di6]5t f t ": !
  det]m9,n is made = ea* vehicle4    #aa
              ,,it-#eba;,r           a#c
#e4 ,! t]m 8op]at+ exp5ses0 ref]r$ 6in
  #c7a7 abv 9cludes ! co/ ( fuel1
  ma9t5.e 7= example1 c> wa%es1 gr1se1
  oil & s]vic+ *>ges71 repairs 7o!r ?an
  a3id5t repairs--see #g 2l71 lic;es1
  9sur.e &1 except z not$ 9 #f 2l1
  8eligi#0 l1s+ co/s 7see #i 6#ab 2l71
  less ! a7regate ( all rebates or o!r
  am.ts 7except ": us$ 6calculate !
  8eligi#0 l1s+ co/7 rcvd or receiva# 0!
  9dividual =! exp5ses & n 9clud$ 9 !
  9dividual's 9come4
#f4 ,": an 9dividual1 :o l1ses a 8motor
  vehicle0 on a l;g-t]m basis b is n
  5titl$ 6claim capital co/ all[.e on x1
  makes frequ5t use (! vehicle dur+
  normal "w h\rs = busi;s purposes1 b !
  4t.e travell$ = t purpose is
  -p>atively l[1 ! 8eligi#0 l1s+ co/
  7see #i 6#ab 2l7 = t vehicle may 2
  exclud$ f ! op]at+ exp5ses if !
  9dividual s reque/s &! circum/.es
  w>rant x4 ,! 8eligi#0 l1s+ co/ is !n
  appor;n$ on ! basis (a r1sona#     #ab
              ,,it-#eba;,r           b#c
  -b9,n ( 4t.e travell$ & "t ! 8motor
  vehicle0 0 us$ = busi;s purposes4 ,=
  example1 if a 8motor vehicle0 7 us$ =
  busi;s purposes five "ds \ ( sev5 9 a
  normal "w week1 x mi<t 9dicate t
  7all[+ = p]sonal use 9 ! ev5+1 usual
  holi"ds1 "t (f = sick;s1 etc47 x 0 us$
  #fe@3p (! "t = busi;s purposes4 ,if1
  on a 4t.e-travell$ basis1 ! vehicle 7
  us$ only #be@3p = busi;s purposes1
  -b9+ ! two factors mi<t su7e/ t #de@3p
  (! 8eligi#0 l1s+ co/ %d 2 attribut$
  6busi;s use4 ,h["e1 ": a 8motor
  vehicle0 is us$ 9frequ5tly = busi;s
  purposes1 ! appor;n;t m/ 2 on ! 4t.e-
  travell$ basis al"o1 ev5 ?\< ! vehicle
  is availa# at all "ts = busi;s
  purposes4
#g4 ,a3id5t repair exp5ses1 :e!r 9curr$
  6repair damages result+ f ! a3id5t 6a
  8motor vehicle0 driv5 0! 9dividual or
  6! prop]ty ( o!rs1 >e deducti# 9 full
  if ! vehicle 0 2+ us$ = busi;s
  purposes at ! "t (! a3id5t4 ,any   #ac
              ,,it-#eba;,r           c#c
  am.t deducti# is net af recov]ies "?
  9sur.e or damage claims4 ,no por;n (
  s* exp5ses is deducti# if ! vehicle 0
  2+ us$ = p]sonal purposes at ! "t (!
  a3id5t4
#h4 ,6be deducti#1 8motor vehicle0
  exp5ses m/ 2 r1sona# 9 ! circum/.es &
  supporta# 0v\*]s4 7,! v\*]s ne$ n 2
  fil$ )! 9dividual's 9come tax return2
  h["e1 !y m/ 2 reta9$ = exam9,n on
  reque/47 ,a claim 0an 9dividual =
  8motor vehicle0 exp5ses calculat$ on a
  c5ts-p]-kilometre 7mile7 basis is n
  a3epta#4 ,6support a claim ": a 8motor
  vehicle0 is us$ 9 "p = busi;s purposes
  & 9 "p = p]sonal purposes1 a record %d
  2 kept ( total 4t.e travell$ & 4t.e
  travell$ = busi;s purposes 9 a ye>4 ,!
  record %d 3ta9 at l1/ ! date1 de/9,n &
  4t.e travell$ = ea* trip4



                                     #ad
           ,eligi# ,l1s+ ,co/        d#c
           7p>agraphs #i-aa7
    
#i4 ,o!r ?an z 4cuss$ 9 #aj 2l =a
  8pass5g] vehicle10 ! 8eligi#0 l1s+ co/
  7ref]r$ 6in #e & #f abv7 (a 8motor
  vehicle0 =a tax,n ye> is ! co/ 6!
  9dividual ( l1s+ ! vehicle 9 ! ye>4
#aj4 ,sec;n #fg.c provides t ! 8eligi#0
  l1s+ co/1 ref]r$ 6in #i abv1 (a
  8pass5g] vehicle0 =a tax,n ye> % n
  exce$ ! less] (
  7a7 ! am.t det]m9$ 0! =mula
    7;,a multipli$ 0;,b7 divid$ 0#cj
      m9us ;,c m9us ;,d m9us ;,e
  &
  7b7 ! am.t det]m9$ 0! =mula
    7;,a multipli$ 0;,b7 divid$ 0#.he;,c
      m9us ;,d m9us ;,e
  ": 9 ! =mula 9 7a7 abv
  .;,a is 4#fjj or s* o!r am.t z is
    prescrib$1
  

                                     #ae
              ,,it-#eba;,r           e#c
  .;,b is ! numb] ( "ds 9 ! p]iod -m5c+
    at ! 2g9n+ (! t]m (! l1se & 5d+ at !
    e>li] (! 5d (! ye> &! 5d (! l1se1
  .;,c is ! total ( all am.ts deduct$ 9
    -put+ ! 9dividual's 9come = prec$+
    tax,n ye>s =! actual l1se *>ges =!
    vehicle1
  .;,d is ! am.t ( 9t]e/ t wd 2 e>n$ on
    ! "p (! total ( all refunda# am.ts
    =! l1se t exce$s 4#a1jjj1 if 9t]e/ 7
    7;i7 paya# on ! refunda# am.ts at !
      prescrib$ rate1 &
    7;ii7 -put$ =! p]iod 2f ! 5d (! ye>
      dur+ : ! refunda# am.ts 7 \t/&+1 &
  .;,e is ! total ( all reimburse;ts t
    2came receiva# 2f ! 5d (! ye> 0!
    9dividual 9 3nec;n )! l1se1 &
  ": 9 ! =mula 9 7b7 abv
  .;,a is ! total (! actual l1se *>ges
    =! l1se 9curr$ =! ye> or ! total (!
    actual l1se *>ges =! l1se pd 9 ! ye>
    7dep5d+ on ! me?od regul>ly foll[$
    0! 9dividual 9 -put+ 9come71
                                     #af
              ,,it-#eba;,r           f#c
  .;,b is 4#bj1jjj or s* o!r am.t z is
    prescrib$1
  .;,c is ! grt] ( 4#bc1ebi 7or s* o!r
    am.t z is prescrib$7 &!
    manufactur]'s li/ price =! vehicle1
  .;,d is ! am.t ( 9t]e/1 t wd 2 e>n$ on
    t "p (! total ( all refunda# am.ts
    pd on ! l1se t exce$s 4#a1jjj if
    9t]e/ 7
    7;i7 paya# on ! refunda# am.ts at !
      prescrib$ rate1 &
--------------------------------------#d
    7;ii7 -put$ =! p]iod 9 ! ye> dur+ :
      ! refunda# am.ts >e \t/&+1 &
  .;,e is ! total ( all reimburse;ts t
    2came receiva# dur+ ! ye> 0!
    9dividual 9 3nec;n )! l1se4
  ,subsec;n #gcjg7#c7 (! ,regul,ns
  prescrib$ ! am.t = .;,a 9 ! =mula 7a7
  abv z 4#fej =! p]iod af ,augu/ #aihi &
  2f #aiia1 & af #aiij ! prescrib$ am.t
  is equal 6! total ( 4#fej &! grte/
  am.t (! ,gds & ,s]vices ,tax 7,,gst7 &
  ,prov9cial ,sales ,tax 7,,pst7 t   #ag
              ,,it-#eba;,r           a#d
  wd h be5 paya# on a mon?ly pay;t "u !
  l1se 9 ! tax,n ye> (! lessee1 if !
  l1se _h requir$ mon?ly pay;ts1 2f ^?
  taxes1 ( 4#fej4

  ,subsec;n #gcjg7#a7 (! ,regul,ns
  prescribes ! am.t = .;,b 9 ! =mula 7b7
  abv z 4#bd1jjj = an automobile acquir$
  or l1s$ "u an agree;t 5t]$ 96af ,augu/
  #aihi & 2f #aiia1 & ": ! automobile is
  acquir$ or l1s$1 "u an agree;t 5t]$
  96af #aiij1 ! prescrib$ am.t is
  4#bd1jjj plus ,,gst & ,,pst paya# _h !
  automobile be5 acquir$ = 4#bd1jjj4

  ,pursuant 6subsec;n #gcjg7#d7 (!
  ,regul,ns1 .;,c 9 ! =mula 7b7 is !
  am.t prescrib$ = an automobile l1s$ "u
  a l1se 5t]$ 96af ,augu/ #aihi t is !
  am.t equal 6#ajj ov] #he (! am.t
  det]m9$ = .;,b 9 ? =mula4

  ,! prescrib$ rate ( 9t]e/ =! relevant
  p]iod is describ$ 9 sec;n #dcja    #ah
              ,,it-#eba;,r           b#d
  (! ,regul,ns4 ,! rate is det]m9$
  qu>t]ly & c 2 obta9$ f any ,rev5ue
  ,canada tax s]vices (fice4

  ,=! purposes ( .;,d 9 ! abv =mulas1 a
  8refunda# am.t0 9cludes any am.t t !
  9dividual is 5titl$ 6rcv f ! lessor at
  "s "t "u ! l1se4 ,x wd 9clude an am.t
  loan$ 6! lessor 0! 9dividual 6e6ect a
  reduc;n (! l1se pay;ts4

  ,! am.t det]m9$ 0! abv =mulas =a
  "picul> tax,n ye> =a 8pass5g] vehicle0
  may g5],y 2 describ$ z ! less] (
  7c7 ! am.t 0: 4#fjj 7or s* o!r am.t z
    is prescrib$7 "ts ! numb] ( 8mon?s0
    ! vehicle 0 l1s$ s9ce ! 2g9n+ (!
    l1se1 less any am.ts deduct$ 9 prior
    ye>s =! l1se exce$s ! deem$ 9t]e/ &
    receiva# reimburse;ts ref]r$ 6in
    .;,d & .;,e1 respectively1 (! abv
    =mulas1 &
  7d7 ! propor;n 7n exce$+ "o7 ( actual
    l1se pay;ts made dur+ ! ye> t    #ai
              ,,it-#eba;,r           c#d
    4#bj1jjj 7or s* o!r am.t z is
    prescrib$7 is ( #he@3p (! am.t
    describ$ = .;,c (! =mula 9 7b7 abv1
    less ! deem$ 9t]e/ & receiva#
    reimburse;ts ref]r$ 6in .;,d & .;,e1
    respectively1 (! abv =mulas4 7,?
    -put,n is design$ 6provide a
    re/ric;n =a l1s$ 8pass5g] vehicle0
    simil> 6! capital co/ all[.e
    re/ric;n 4cuss$ 9 #ac 2l =a pur*as$
    8pass5g] vehicle407
#aa4 ,": an 9dividual -putes 9come f a
  f>m+ or fi%+ busi;s us+ ! 8ca% me?od0
  describ$ 9 sec;n #bh &! total am.t pd
  9 a "picul> ye> on a l1se 75t]$ 962f
  ,april #bg1 #aiie7 is grt] ?an ! am.t
  deducti# =! ye> z det]m9$ "u ! abv
  =mulas1 ! 9dividual may 2 p]mitt$
  6claim all or "p ( t grt] am.t subject
  6! foll[+ limit,n4 ,! 9dividual w 2
  p]mitt$ 6deduct ! am.t pd 9 ! ye> 6!
  ext5t t ! a7regate ( t am.t & all o!r
  am.ts deduct$ 9 prec$+ ye>s on ! l1se
  does n exce$ ! a7regate ( all      #bj
              ,,it-#eba;,r           d#d
  am.ts on ! l1se t wd 2 deducti# ov] !
  t]m (! l1se if s* am.ts 7 requir$ 6be
  pd 9 equal mon?ly pay;ts4 ,= example1
  assume t s* an 9dividual l1ses a
  pass5g] vehicle = ?ree ye>s -m5c+ on
  ,janu>y #a1 #aiic & makes a pay;t (
  4#c1jjj on t date & makes #cf equal
  mon?ly pay;ts ( 4#djj "!af4 ,if we
  fur!r assume t no refunda# am.ts 9
  excess ( 4#a1jjj or reimburse;ts
  receiva# >e 9volv$1 ! total am.t paya#
  "u ! l1se 74#ag1djj7 wd 2 deducti# if
  pd 0way ( #cf equal pay;ts ( 4#dhc.cc1
  2c ! applic,n (! abv =mulas 9 s* a
  case wd n reduce ! am.t deducti#4
  ,?us1 ! 9dividual wd 2 all[$ 6deduct 9
  #aiic ! 4#g1hjj pd 9 t ye>4 ,9 #aiid &
  #aiie1 ! 9dividual wd deduct ! 4#d1hjj
  pd 9 ea* ( ^? ye>s4

,note3
  ,9 a ,ways & ,m1ns ,mo;n rel1s$ 0!
  ,m9i/] ( ,f9.e on ,june #bj1 #aiif x
  is propos$ t p>agraph #bh7#a77e7   #ba
              ,,it-#eba;,r           e#d
  2 am5d$ 6provide t pay;ts 7o!r ?an =
  9v5tory7 t reduce ca%-basis 9come (a
  f>m+ or fi%+ busi;s =a ye> w n 9clude
  prepd exp5ses relat+ 6a tax,n ye> (!
  busi;s t is two or m tax,n ye>s af !
  ye> ( pay;t4 ,x is fur!r propos$ t
  p>agraph #bh7#a77e4#a7 w provide a
  deduc;n 9 a tax,n ye> (a taxpay] =
  am.ts pd 9 a previ\s ye> 0! taxpay] ":
  ! am.ts wd 2 deducti# 9 -put+ 9come =!
  curr5t tax,n ye> f ! taxpay]'s busi;s
  ( f>m+ or fi%+ if t 9come 7 n -put$ 9
  a3ord.e )! ca% me?od4 ,6be deducti# 0a
  taxpay] ! am.t w 2 requir$ 6h be5 pd 9
  a prec$+ tax,n ye> 9 ! c\rse ( c>ry+
  on ! busi;s ( f>m+ or fi%+ & n 2
  deducti# 9 -put+ ! 9come (! busi;s =
  any o!r tax,n ye>4 ,! am5d;ts1 if
  5act$ z propos$1 w apply 6am.ts pd af
  ,april #bf1 #aiie1 except = am.ts pd
  pursuant 6writt5 agree;ts 5t]$ 960!
  pay] 2f ,april #bg1 #aiie4

                                     #bb
              ,,it-#eba;,r           f#d
  ,if p>agraphs #bh7#a77e7 & 7e4#a7 >e
  5act$ z propos$1 ! foll[+ is an
  example (! applic,n ( ^? p>agraphs4

  ,assume t an 9dividual -putes 9come f
  a f>m+ or fi%+ busi;s us+ ! 8ca%
  me?od0 describ$ 9 sec;n #bh & on
  ,janu>y #a1 #aiif1 ! 9dividual l1ses a
  pass5g] vehicle = ?ree ye>s1 makes a
  pay;t ( 4#c1jjj on t date & agrees
  6pay 4#fjj p] mon? = #aiif1 #aiig &
  #aiih4
--------------------------------------#e
  ,! applic,n ( p>agraphs #bh7#a77e7 &
  7e4#a7 wd produce ! foll[+ am.ts3

  #aiif--4#i1bjj ,774#fjj multipli$ 0#ab
    mon?s7 plus 4#b1jjj7'
  #aiig--4#g1bjj ,74#fjj multipli$ 0#ab
    mon?s7'
  #aiih--4#h1bjj ,774#fjj multipl$ 0#ab
    mon?s7 plus 4#a1jjj7'
  
                                     #bc
              ,,it-#eba;,r           a#e
  ,sec;n #fg.c wd !n 2 appli$ 6! abv
  am.ts 6det]m9e ! 8eligi#0 l1s+ co/ =
  ea* ye>4

         ,example--,comput,n (
     8,eligi#0 ,l1s+ ,co/ 7p>agraph
                  #ab7
    
#ab4 ,! foll[+ is an example (a -put,n
  (! 8eligi#0 l1s+ co/ =a l1se 5t]$ 96af
  #aiij =a 8pass5g] vehicle0 us+ !
  =mulas 9 #aj abv =a taxpay] on !
  a3rual basis ( report+ 9come4

  ,assume ! foll[+ set ( facts3
  7a7 ,l1se *>ges paya# =! ye>
    =! vehicle 74#gej p] mon?7   4#i1jjj
  7b7 ,"ds 9 ! ye> t ! vehicle
    0 l1s$ "u ! "picul> l1se """"" 4#cfe
  7c7 ,"ds 9 ! previ\s ye> t !
    vehicle 0 l1s$ "u !
    "picul> l1se """"""""""""""""" 4#ahd
  7d7 ,am.t deduct$ 9 !
    previ\s ye> =! vehicle           #bd
              ,,it-#eba;,r           b#e
    bas$ on ! applic,n (!
    =mulas 9 #aj abv = t ye> """ 4#c1ede
  7e7 ,manufactur]'s li/ price
    =! vehicle """""""""""""""" 4#cj1jjj
  7f7 ,refunda# am.t """"" 4#ab1jjj 7#a7
  7g7 ,prescrib$ rate "u sec;n
    #dcja (! ,regul,ns """"" #aj@3p 7#b7
  7h7 ,reimburse;ts receiva#
    =! ye> 9 3nec;n )! l1se (!
    vehicle """""""""""""""""""""" 4#hjj
  7i7 ,reimburse;ts receiva#
    =! ye> &= previ\s ye>s 9
    3nec;n )! l1se (! vehicle "" 4#a1bjj
  
  ,bas$ on ! abv1 ;,d (! =mula 9 #aj7a7
  abv is 4#a1fee2 t is1 #edi ov] #cfe
  multipli$ by ,774#ab1jjj m9us 4#ajjj7
  multipli$ 0#.aj7'1 & ;,d (! =mula 9
  #aj7b7 is 4#a1ajj2 t is1 74#ab1jjj
  m9us 4#a1jjj7 multipli$ 0#.aj



                                     #be
              ,,it-#eba;,r           c#e
,-put,n
  ,! 8eligi#0 l1s+ co/ is ! less] (
    7;i7 4#gdh 7#c7 multipli$ 0#edi m9us
      4#c1ede divid$ 0#cj m9us 4#a1fee
      m9us #a1bjj equals 4#g1bhh
    &
    7;ii7 4#i1jjj multipli$
      04#bg1fjj 7#d7 divid$ 0#.he
      multipli$ 04#cb1dgj 7#e7 m9us
      4#a1ajj m9us #hjj equals 4#g1ajj
    
7#a7 ,! refunda# am.t ( 4#ab1jjj
  repres5ts an 9t]e/ free loan made 6!
  lessor 0! 9dividual at ! 2g9n+ (! l1se
  & t is 6be pd back 0! lessor at ! 5d
  (! l1se4
7#b7 ,6simplify ! example1 ! rate =!
  full #ah mon?s is assum$ 6be #aj@3p4
  ,! prescrib$ rate is subject 6adju/;t
  = ea* qu>t] (a "picul> ye>4
7#c7 4#fej plus ,,gst & ,,pst4
7#d7 4#bd1jjj plus ,,gst & ,,pst4
7#e7 ,grt] ( 4#bg1fjj multipi$ 0#ajj ov]
  #he & 4#cj1jjj                     #bf
         ,capital ,co/ ,all[.e       d#e
           7p>agraphs #ac-bj7
    
#ac4 ,": an 8automobile0 [n$ 0an
  9dividual is a 8pass5g] vehicle0 co/+
  m ?an 4#bj1jjj 7or s* o!r am.t z may 2
  prescrib$71 ! am.t ( capital co/
  all[.e t may 2 claim$ on ! vehicle is
  re/rict$ 0limit+ ! am.t (! capital co/
  &! undepreciat$ capital co/ (!
  relevant class 7see #ad & #ae 2l74
#ad4 ,p>agraphs #ac7#g77g7 & 7h71
  respectively1 provide t ! capital co/
  (a 8pass5g] vehicle0 6an 9dividual is
  6be det]m9$ z foll[s3
  7a7 ": ! co/ (! 8pass5g] vehicle0
    exce$s 4#bj1jjj1 or s* o!r am.t z is
    prescrib$1 ! capital co/ (! vehicle
    % 2 deem$ 6be 4#bj1jjj or t o!r
    prescrib$ am.t1 z ! case may be2 &
  7b7 not)/&+ 7a71 ": ! 8pass5g]
    vehicle0 is acquir$ 0! 9dividual at
    any "t f a p]son ) :om ! 9dividual
    does n d1l at >m's l5g?1 ! capital
                                     #bg
              ,,it-#eba;,r           e#e
    co/ (! vehicle at t "t % 2 deem$ 6be
    ! l1/ (
    7;i7 ! fair m>ket value (! vehicle
      at t "t1
    7;ii7 ! am.t t immly 2f t "t 0 !
      8co/ am.t0 7z def9$ 9 subsec;n
      #bdh7#a77 6t p]son (! vehicle1 &
    7;iii7 4#bj1jjj or s* o!r am.t z is
      prescrib$4
  ,subsec;n #gcjg7#a7 (! ,regul,ns1
  describ$ 9 #aj abv1 prescribes ! am.ts
  =! purposes ( p>agraphs #ac7#g77g7 &
  7h74
#ae4 ,"u subp>agraph #aajj7#a77a77x4#a7
  (! ,regul,ns ea* 8pass5g] vehicle0
  hav+ a co/ ( m ?an 4#bj1jjj 7or s* o!r
  am.t z may 2 prescrib$ =! purposes (
  subsec;n #ac7#b77 [n$ 0an 9dividual &
  us$ 6e>n 9come is 9clud$ 9 class #aj.a
  deprecia# at ! rate ( #cj@3p on a
  decl9+ bal.e basis4 ,subsec;n
  #aaja7#a;af7 (! ,regul,ns prescribes a
  sep>ate class = ea* s* vehicle4 ,!
  capital co/ (! vehicle 9 ea*       #bh
              ,,it-#eba;,r           f#e
  sep>ate class is det]m9$ 9 ! mann] set
  \ 9 #ad abv4 8,pass5g] vehicles0 co/+
  less ?an 4#bj1jjj 7or s* o!r am.t z
  may 2 prescrib$7 & motor vehicles s* z
  vans & pick-up trucks >e plac$ 9
  ,class #aj &! bal.e 9 ! class is
  subject 6capital co/ all[.e at a rate
  ( #cj@3p on a decl9+ bal.e basis4
  ,c]ta9 o!r motor vehicles1 s* z taxi
  cabs >e 9clud$ 9 ,class #af & >e
  subject 6capital co/ all[.e at ! rate
  ( #dj@3p on ! decl9+ bal.e4 ,subsec;n
  #gcjg7#a7 (! ,regul,ns1
--------------------------------------#f
  describ$ 9 #aj abv1 prescribes ! am.ts
  = subsec;n #ac7#b74
#af4 ,subsec;n #aajj7#b7 (! ,regul,ns
  limits ! capital co/ all[.e 6"o-half !
  normal am.t 9 ! ye> a 8motor vehicle0
  is acquir$ or 2came availa# = use4
  ,h["e1 subsec;n #aajj7#b.e7 (!
  ,regul,ns p]mits an 9dividual 6claim1
  9 ! ye> ( 4posi;n (a 8pass5g] vehicle0
  t 0 9clud$ 9 class #aj.a & t 0     #bi
              ,,it-#eba;,r           a#f
  [n$ 0! 9dividual at ! 5d (! prec$+
  tax,n ye>1 "o-half ! am.t t !
  9dividual wd h be5 p]mitt$ 6claim z
  capital co/ all[.e _h ! vehicle n be5
  4pos$ (4
#ag4 ,": an 9dividual is 5titl$ 6claim
  capital co/ all[.e 9 -put+ total
  8motor vehicle0 exp5ses1 ! capital co/
  all[.e claim may 2 calculat$ 0ei (!
  foll[+ me?ods3
  7a7 0det]m9+ ! am.t ( 9t]e/1 op]at+
    exp5ses & capital co/ all[.e1
    appor;n+ !m on ! basis 4cuss$ 9 #c
    abv & 5t]+ ! busi;s por;n on !
    appropriate l9es on ,=m ,t#b;l#bd1
    ,/ate;t ( ,busi;s ,activities1 : is
    provid$ )! ,busi;s & ,profes.nal
    ,9come booklet 7a supple;t>y 9come
    tax guide74 ,alt]natively1 ": "! is
    frequ5t busi;s use (! vehicle dur+
    normal "w h\rs b ! 4t.e travell$ = t
    purpose is -p>atively l[1 ! capital
    co/ all[.e may 2 exclud$ f ! total
    am.t 6be appor;n$ on ! basis     #cj
              ,,it-#eba;,r           b#f
    4cuss$ 9 #c abv & 9/1d 2 appor;n$
    sep>ately on ! basis 4cuss$ 9 #f
    abv2 t is1 on ! basis (a r1sona#
    -b9,n ( 4t.e travell$ & "t ! vehicle
    0 us$ = busi;s purposes2 or
  7b7 subject to 7;i7 & 7;ii7 2l1
    0calculat+ capital co/ all[.e on t
    propor;n (! capital co/ 7see #ad abv
    3c]n+ ! 4#bj1jjj limit,n7 (! vehicle
    t ! busi;s use is (! total use &
    claim+ ! all[.e sep>ately f o!r
    exp5ses4 ,? alt]native me?od is
    a3epta# only if
    7;i7 ! propor;n (! capital co/ on :
      ! all[.e is calculat$ is
      approximately equal 6:at !
      propor;n = busi;s use wd 2 on !
      4t.e-travell$ basis1 or on ! -b9$
      4t.e-travell$ & "t-us$ basis
      4cuss$ 9 7a7 abv1 &
    7;ii7 an appropriate adju/;t "u
      p>agraph #ac7#g77d7 is made 3c]n+
      any *ange 9 ! use regul>ly made (!
                                     #ca
              ,,it-#eba;,r           c#f
      vehicle = busi;s & p]sonal
      purposes4
#ah4 ,": a 8motor vehicle0 is us$ solely
  = busi;s purposes = "p (a ye> & solely
  = p]sonal purposes =! o!r "p1
  appropriate adju/;ts "u p>agraphs
  #ac7#g77a7 & 7b7 m/ 2 made 6capital
  co/ all[.e s*$ules t may1 subject 6!
  -;ts 9 #ai 2l1 result 9 a recapture (
  capital co/ all[.e or a t]m9al loss4
  ,an example ( ": ! =ego+ proc$ure wd
  apply is ": an 9dividual practises a
  profes.n or c>ries on a busi;s 7s* z t
  (a -mis.n ag5t7 = only "p (! ye>4
#ai4 ,0virtue ( subsec;n #ac7#b71 "! w n
  2 9clud$ 9 an 9dividual's 9come any
  recaptur$ capital co/ all[.e on a
  class #aj.a 8pass5g] vehicle40 ,any
  am.t n 9clud$ 9 9come 0virtue (
  subsec;n #ac7#b7 is deem$ 6be 9clud$ 9
  ! 9dividual's 9come =! purpose ( ;,b
  (! def9i;n ( 8undepreciat$ capital
  co/0 9 subsec;n #ac7#ba7 ?us 5sur+ t !
  result (! -put,n "u ! def9i;n      #cb
              ,,it-#eba;,r           d#f
  8undepreciat$ capital co/0 9 subsec;n
  #ac7#ba7 (! "picul> class w 2 nil4

  ,al1 0virtue ( subsec;n #bj7#af.a71 an
  9dividual may n claim a t]m9al loss =a
  class #aj.a 8pass5g] vehicle40
#bj4 ,=! purposes (! ,act &! ,regul,ns
  gov]n+ capital co/ all[.e1 recapture (
  capital co/ all[.e & t]m9al losses1 !
  def9i;n ( 8total depreci,n0 9 subsec;n
  #ac7#ba7 def9es t am.t z ! a7regate (
  am.ts deduct$ = capital co/ all[.e &
  t]m9al losses4 ,! def9i;n 9cludes 9
  8total depreci,n0 am.ts t wd h be5
  deduct$ z a t]m9al loss b = subsec;n
  #bj7#af.a71 z 4cuss$ 9 #ai abv4

         ,9t]e/ 7p>agraph #ba7
    
#ba4 ,": an am.t ( 9t]e/ is pd or paya#
  0an 9dividual on borr[$ m"oy us$
  6acquire a 8pass5g] vehicle10 or on an
  am.t pd or paya# =! acquisi;n "!(1
  sec;n #fg.b limits ! am.t          #cc
              ,,it-#eba;,r           e#f
  deducti# 6a maximum ( 4#bej = ea* #cj
  "ds 9 ! p]iod = : ! 9t]e/ 0 pd or
  paya#4 ,?us1 ! 9t]e/ ref]r$ 6in #c7c7
  abv =a 8pass5g] vehicle0 is ! less] (!
  relevant 9t]e/ pd or paya# 7dep5d+ on
  ! me?od ( -put+ 9come7 9 ! p]iod &!
  am.t det]m9$ 0! =mula

  7;,a multipli$ 0;,b7 divid$ 0#cj
  ":
  .;,a is 4#bej or s* o!r am.t z may 2
    prescrib$1 &
  .;,b is ! numb] ( "ds 9 ! p]iod = : !
    9t]e/ 0 pd or paya#1 z ! case may
    be4
  
  ,pursuant 6subsec;n #gcjg7#b7 (!
  ,regul,ns1 =! purposes ( .;,a ! am.t
  prescrib$ = an automobile acquir$ af
  ,augu/ #aihi is 4#cjj4

  ,! -;ts 9 ! second s5t;e ( #ag7a7 abv
  reg>d+ ! alt]native me?od ( appor;n+
                                     #cd
              ,,it-#eba;,r           f#f
  capital co/ all[.e al apply 6appor;n+
  9t]e/4
--------------------------------------#g
        ,jo9t ,[n]s or ,lessees
             7p>agraph #bb7
    
#bb4 ,": an 9dividual [ns or l1ses a
  8pass5g] vehicle0 jo9tly ) "o or m o!r
  p]sons1 sec;n #fg.d provides t ! am.ts
  ( 4#fjj1 4#bc1ebi1 4#bj1jjj & 4#bej
  7or s* o!r am.ts replac+ !m z may 2
  prescrib$7 ref]r$ 6in #aj1 #ac1 #ad &
  #ba abv % 2 appor;n$ am;g !m on !
  basis (! fair m>ket value ( _!
  respective 9t]e/s 9 ! vehicle4 ,=
  example1 if an 9dividual [n$ an 9t]e/
  valu$ at 4#i1jjj 9 a 8pass5g] vehicle0
  valu$ at 4#bg1jjj1 ! 4#cjj limit
  ref]r$ 6in #ba abv = t 9dividual wd 2
  4#ajj 7t is1 4#i1jjj ov] 4#bg1jjj
  multipli$ 04#cjj7 = ea* relevant #cj
  "ds 74#c.cc p] "d74

                                     #ce
          ,sec;n #he ,rollov]        a#g
             7p>agraph #bc7
    
#bc4 ,": an 9dividual 4poses (a 8pass5g]
  vehicle0 7hav+ an actual co/ 6!
  9dividual ( m ?an 4#bj1jjj or s* o!r
  am.t z may 2 prescrib$7 6a non->m's
  l5g? taxa# ,canadian corpor,n pursuant
  6! provi.ns ( subsec;n #he7#a71
  p>agraph #he7#a77e4#d7 provides t !
  am.t ! 9dividual &! corpor,n h agre$
  on 9 _! elec;n % 2 deem$ 6be equal 6!
  undepreciat$ capital co/ (! vehicle 6!
  9dividual immly 2f ! 4posi;n4 ,?
  5sures t ! co/ am.t ref]r$ 6in #ad abv
  w 2 ma9ta9$ 9 non->m's l5g? transf]s t
  >e subject 6subsec;n #he7#a74 ,see !
  curr5t v].n ( ,,it-#dai1 ,m1n+ ( ,>m's
  ,l5g? = -;ts on :e!r an 9dividual is
  at non->m's l5g? )a corpor,n4
  ,subsec;n #gcjg7#a7 (! ,regul,ns1
  describ$ 9 #aj abv1 prescribes ! am.ts
  = p>agraph #he7#a77e4#d74

                                     #cf
       ,g5]al ,rem>ks 7p>agraphs     b#g
                #bd-bf7
    
#bd4 ,al? exp5ses 9curr$ 9 travell+ 2t
  di6]5t premises (! same busi;s >e
  deducti# 0an 9dividual :o o!rwise
  qualifies1 exp5ses 9curr$ 0! 9dividual
  =! purpose ( travell+ 2t ! 9dividual's
  home & place ( busi;s >e n1 un.s x is
  e/abli%$ t ! home is ! base ( busi;s
  op],ns4 ,if ! 9dividual has an (fice
  or o!r fix$ place ( busi;s locat$
  else":1 ! home is norm,y reg>d$ z n 2+
  ! base ( busi;s op],ns4 ,! fact t all
  s]vices >e r5d]$ at "s o!r p]son's
  place ( busi;s does n necess>ily make
  t place ! 9dividual's base ( busi;s
  op],ns4 ,! 9dividual's home may 2 !
  base ( busi;s op],ns ev5 ?\< a room
  "!9 is n set aside & us$ solely =!
  purpose ( e>n+ 9come4 ,! foll[+ >e
  examples ( homes t may 2 reg>d$ z !
  base ( busi;s op],ns3
  7a7 ! home (a speciali/ 9 anaes!sia :o
    p]=ms all (fice func;ns (!       #cg
              ,,it-#eba;,r           c#g
    practice at home1 takes em]g5cy
    calls "!1 r5d]s all s]vices 6pati5ts
    at "o or m hospitals & has no (fice
    or o!r a3ommod,n at ! hospital or at
    any o!r place o!r ?an ! home2
  7b7 ! home ( an 9dep5d5t r1l e/ate
    ag5t :o has an (fice "!1 has no
    busi;s a3ommod,n else": & r5d]s
    s]vices 6cli5ts at _! homes or at !
    sites ( r1l prop]ties2 &
  7c7 ! home (a plumb]1 electrician or
    pa9t] ^: (fice is at home ": all
    supplies >e kept1 :o has no o!r
    place ( busi;s & :o r5d]s all
    s]vices 6cu/om]s at :at"e places >e
    nec 6fulfill 3tractual oblig,ns4
#be4 ,travell+ 8in ! c\rse (0 c>ry+ on a
  busi;s does n 9clude travell+ f a
  place ": "o busi;s is c>ri$ on 6ano!r
  place ": an 5tirely di6]5t busi;s is
  c>ri$ on4 ,= obs]v,ns on 8,travell+
  6,r5tal ,prop]ties10 pl1se see !
  curr5t v].n ( ,r5tal ,9come1 a
  supple;t>y 9come tax guide4        #ch
              ,,it-#eba;,r           d#g
#bf4 ,0virtue ( sec;n #fg1 8motor
  vehicle0 exp5ses >e n deducti# 6!
  ext5t !y >e unr1sona#4




















                                     #ci
                ,app5dix              #h
    
              ,assump;ns3
    
    --,dr4 ,le! is a self-employ$
      anaes!ti/ :o practices at ! ,g5]al
      ,hospital4 ,%e does n h an (fice
      ": %e sees h] pati5ts b r sees !m
      9 ! hospital af !y h be5 admitt$4
    --,dr4 ,le! has an (fice 9 h] home
      ": %e does all (! adm9i/r,n "w 9
      3nec;n ) h] practice4
    --,dr4 ,le!'s fiscal p]iod 5ds on
      ,decemb] #ca4
    --,on ,novemb] #a1 #aiic1 ,dr4 ,le!
      trad$-in ! automobile t %e _h
      pur*as$ = 4#bh1jjj plus ,,gst &
      ,,pst 9 #aiij4 ,%e 0 all[$
      4#ae1jjj z ! fair m>ket value (
      trade-in4 ,! new automobile co/
      4#ee1jjj plus ,,gst & ,,pst4
    --,dr4 ,le! pd 9t]e/ ( 4#hjj 9 #aiic
      & 4#c1bjj 9 #aiid on ! m"oy %e
      borr[$ 6buy ! automobile4 ,%e pd
                                     #dj
              ,,it-#eba;,r           a#h
      no 9t]e/ 9 #aiic on ! automobile t
      %e pur*as$ 9 #aiij4
  ,=! ye>s #aiic & #aiid1 ,dr4 ,le!'s
log on ! use ( h] automobile rev1ls t
approximately #bj@3p (! mileage driv5 0
9volv$ 9 go+ 6& f ! hospital4 ,! log al
rev1ls t approximately #gj@3p (! "t :5
h] automobile 0 away f h] home x 0 9 use
go+ 6or f ! hospital or sitt+ at !
hospital4

               ,analysis3
    
  ,! automobile t ,dr4 ,le! pur*as$ 9
#aiij 0 plac$ 9 ,class #aj.a ( ,s*$ule
,,ii (! ,regul,ns 7see #ae abv7 s9ce !
prescrib$ am.t = pass5g] vehicles
pur*as$ 9 #aiij 0 4#bd1jjj 7see ! 4cus.n
( subsec;n #gcjg7#a7 9 #aj abv74
,pursuant 6subsec;n #aajj7#b.e7 (!
,regul,ns 7see #af abv71 ,dr4 ,le! c
9clude capital co/ all[.e ( 4#a1dii7#a7
9 calculat+ ! am.t ( automobile exp5ses
t %e c deduct 9 #aiic = ?            #da
              ,,it-#eba;,r           b#h
automobile4 7,:ile ! proce$s ( 4posi;n 9
#aiic exce$$ ! #aiib undepreciat$
capital co/1 pursuant 6subsec;n #ac7#b7
7see #ai abv71 "! is no recapture (
capital co/ all[.e on ,class #aj.a
prop]ty47
  ,! automobile t ,dr4 ,le! pur*as$ 9
#aiic 0 plac$ 9 ,class #aj.a ( ,s*$ule
,,ii (! ,regul,ns 7see #ae abv7 s9ce !
prescrib$ am.t = pass5g] vehicles
pur*as$ 9 #aiic 0 4#bd1jjj plus ,,gst &
,,pst on 4#bd1jjj 7see ! 4cus.n (
subsec;n #gcjg7#a7 9 #aj abv74 ,! am.t (
4#bd1jjj plus ,,gst & ,,pst 0 4#bh1jhj 9
! prov9ce ": ,dr4 ,le! liv$4 ,dr4 ,le! c
9clude 4#d1bab7#b7 9 #aiic & 4#g1afj7#c7
9 #aiid 9 capital co/ all[.e 9 calculat+
! am.t ( automobile exp5ses t %e c
deduct = ^? ye>s = ? automobile4
  ,dr4 ,le! c 9clude 9t]e/ ( 4#faj 9
#aiic & 4#c1bjj 9 #aiid 9 calculat+ !
am.t ( motor vehicle exp5ses t %e c
deduct 9 ^? ye>s4 ,! 9t]e/ limit 4cuss$
9 #ba abv is 4#cjj ov] #cj           #db
              ,,it-#eba;,r           c#h
multipli$ 0#fa equals 4#faj 9 #aiic &
4#cjj ov] #cj multipli$ 0#cfe equals
4#c1fej 9 #aiid4
  ,g5],y1 ! p]sonal use ( an automobile
9cludes travell+ 2t a p]son's home &
place ( busi;s4 ,h["e1 s9ce ,dr4 ,le!
p]=ms ! adm9i/rative func;ns ( h]
profes.n at home & does n h an (fice
"s": else1 h] home c 2 reg>d$ z h] base
( busi;s op],ns4 ,"!=e1 travell+ 2t h]
home &! hospital does n 3/itute !
p]sonal use ( h] automobile 7see #bd
abv74
  ,dr4 ,le! may deduct approximately
#bj@3p ( h] motor vehicle exp5ses if %e
appor;ns !m on ! basis (! 4t.e travell$
6e>n busi;s 9come 6! total 4t.e travell$
7z describ$ 9 #c abv7 or approximately
#de@3p ,7"o-half 7#bj@3p plus #gj@3p77'
if %e appor;ns !m on ! basis ( 4t.e & "t
us$ 9 ! busi;s 7z describ$ 9 #ag7a7
abv74
  ,:ile ,dr4 ,le! 9cludes ! v>i\s am.ts
( capital co/ all[.e & 9t]e/ not$    #dc
              ,,it-#eba;,r           d#h
abv 9 calculat+ ! am.t ( motor vehicle
exp5ses =! ye> %e m/ reduce ^? am.ts
6reflect h] p]sonal use (! automobile
6det]m9e ! am.t t %e c deduct 9
calculat+ h] 9come4

7#a7 ,,cca on ! ,class #aj.a
  prop]ty pur*as$ 9 #aiij is
  calculat$ z foll[s3
  #aiij co/ ( acquisi;n z
    det]m9$ "u p>agraph
    #ac7#g77g7 7see #ad abv7 "" 4#bd1jjj
  #aiij ,,cca 7#cj@3p
    multipli$ 04#bd1jjj
    multipli$ 0"o-half 7;i77 """ 4#c1fjj
  #aiij ,,ucc """"""""""""""""" 4#bj1djj
  #aiia ,,cca 7#cj@3p
    multipli$ 04#bj1djj7 """"""" 4#f1abj
  #aiia ,,ucc """"""""""""""""" 4#ad1bhj
  #aiib ,,cca 7#cj@3p
    multipli$ 04#ad1bhj7 """"""" 4#d1bhd
  #aiib ,,ucc """""""""""""""""" 4#i1iif
  
                                     #dd
              ,,it-#eba;,r           e#h
  #aiic ,,cca 7#cj@3p
    multipli$ 04#i1iif
    multipi$ 0"o-half 7;ii77 """ 4#a1dii
,,cca on ! ,class #aj.a7;iii7
  prop]ty pur*as$ 9 #aiic is
  calculat$ z foll[s3
#aiic co/ ( acquisi;n z
  det]m9$ "u p>agraphs
  #ac7#g77g7 7see #ad abv7 """"" 4#bh1jh
 """""""""""""""""""""""""""""""""""" #j
7#b7 #aiic ,,cca 7#cj@3p
  multipli$ 04#bh1jhj
  multipli$ "o-half 7;i77 """""" 4#d1bab
  #aiic ,,ucc """""""""""""""""" 4#bc1hf
   """""""""""""""""""""""""""""""""" #h
7#c7 #aiid ,,cca 7#cj@3p
  multipli$ 04#bc1hfh7 """"""""" 4#g1afj
--------------------------------------#i
7;i7 ,pursuant 6subsec;n #aajj7#b7 (!
  ,regul,ns1 ,,cca is reduc$ 6"o half (!
  normal am.t 9 ! ye> a motor vehicle is
  acquir$ or 2comes availa# = use 7see
  #af abv74
                                     #de
              ,,it-#eba;,r           a#i
7;ii7 ,pursuant 6subsec;n #aajj7#b.e7 (!
  ,regul,ns1 ,,cca is reduc$ 6"o half (!
  normal am.t 9 ! ye> a ,class #aj.a
  motor vehicle is 4pos$ ( 7see #af
  abv74
7;iii7 ,subsec;n #aaja7#a;af7 (!
  ,regul,ns prescribes a sep>ate class
  #aj.a = ea* pass5g] vehicle 7see #ae
  abv74














                                     #df
          ,explan,n ( ,*anges        b#i
    
               ,9troduc;n
    
  ,! purpose (! ,explan,n ( ,*anges is
6expla9 ! r1sons =! revi.ns 6an
9t]pret,n bullet94 ,x \tl9es revi.ns t
we h made z a result ( *anges 6! law1 z
well z *anges reflect+ new or revis$
de"p;tal 9t]pret,ns4

           ,r1sons =! ,revi.n
    
  ,! bullet9 has be5 revis$ 6reflect
am5d;ts 6! ,9come ,tax ,act result+ f
,s4,c4 #aiid1 c4#g ,s*$ule ,,ii 7,s4,c4
#aiia1 c4#di--=m]ly ,bill ;,c-#ah7 :
g5],y apply af #aihg1 ! ,ways & ,m1ns
,mo;n ,am5d+ ! ,9come ,tax ,act &
,relat$ ,acts issu$ 0! ,m9i/] ( ,f9.e on
,june #bj1 #aiif & 6make 9cid5tal
*anges4
  ,9 a ,press ,rel1se dat$ ,decemb] #ab1
#aiie1 ! ,p>lia;t>y ,secret>y 6! ,m9i/]
( ,f9.e ref]r$ 6subsec;ns            #dg
              ,,it-#eba;,r           c#i
#gcjg7#a7 to 7#d7 (! ,regul,ns 7z
describ$ 9 p>agraphs #aj & #ba (!
bullet97 & ann\nc$ t ! subsec;ns wd n 2
*ang$ = #aiif4
  ,except z describ$ 9 ! ,note at ! 5d (
p>agraph #aa1 ! -;ts 9 ! bullet9 >e n
a6ect$ 0propos$ legisl,n t has be5
rel1s$ z ( ,octob] #cj1 #aiif4

      ,legislative & ,o!r ,*anges
    
  ,p>agraph #a reflects ! am5d$ def9i;n
( 8automobile40 ,g5],y1 ! am5d;t removes
f ! def9i;n ( 8automobile10 buses1 vans1
pick-up trucks & motor vehicles us$ =
transport+ pass5g]s 9 ! busi;s ( >rang+
or manag+ fun]als4 ,! am5d;t applies
6tax,n ye>s & fiscal p]iods -m5c+ af
,june #ag1 #aihg t 5d af #aihg4
  ,p>agraph #aj has be5 revis$ z foll[s3
    --6reflect an am5d;t 6sec;n #fg.c4
      ,! am5d;t deletes ! ref];e
      6prov9cial sales tax & p]mits
      taxpay]s us+ ! ca% basis       #dh
              ,,it-#eba;,r           d#i
      me?od ( calculat+ 9come 6deduct
      am.ts pd 9 3nec;n )! co/ ( l1s+ a
      pass5g] vehicle2
    --6describe ! relevant prescrib$
      am.ts2 &
    --6delete a posi;n t relates
      69dividuals :o -pute 9come "u
      sec;n #bh &1 z a result (a
      prepay;t "u a l1se1 pay an am.t 9
      a ye> t exce$s ! am.t deducti# 9 !
      ye> "u sec;n #fg.c4 ,! -;ts 7 mov$
      6p>agraph #aa4
  ,! am5d;t 6sec;n #fg.c applies 6tax,n
ye>s & fiscal p]iods -m5c+ af ,june #ag1
#aihg t 5d af #aihg1 except t1 ) respect
6am.ts pd or paya# z a reimburse;t 9
respect (a l1se exp5se1 x is applica#
6tax,n ye>s t 5d af ,july #ac1 #aiij4
  ,p>agraph #aa is "p ( =m] p>agraph
#aj4 ,a note has be5 a4$ at ! 5d (!
p>agraph 6reflect an am5d;t propos$ 9 !
,ways & ,m1ns ,mo;n ,am5d+ ! ,9come ,tax
,act & ,relat$ ,acts rel1s$ 0! ,m9i/] (
,f9.e on ,june #bj1 #aiif4 ,!        #di
              ,,it-#eba;,r           e#i
propos$ am5d;t provides t c]ta9 pay;ts t
reduce ! ca%-basis 9come (a taxpay] 9 a
f>m+ or fi%+ busi;s may n 2 deduct$ 9 !
ye> ( pay;t b may 2 deduct$ 9 a lat]
ye>4 ,! adm9i/rative posi;n describ$ 9
p>agraph #aa w only apply 6l1ses 5t]$
962f ,april #bg1 #aiie s9ce ! ,ways &
,m1ns ,mo;n ( ,june #bj1 #aiif am5d
sec;n #bh 6e6ectively produce a /atutory
require;t relat+ 6! a3.t+ = prepd
exp5ses4
  ,p>agraph #ab 7=m] p>agraph #bh7 gives
an example (! applic,n ( sec;n #fg.c1
9clud+ ! *anges describ$ 9 p>agraph #aj1
& reflects ! am.ts pres5tly prescrib$ 9
sec;n #gcjg (! ,regul,ns4
  ,p>agraph #ag7a7 7=m] p>agraph #ae7a77
reflects revi.ns made 6,=m ,t#babd1
,/ate;t ( ,busi;s ,activities4
  ,p>agraph #ba 7=m] p>agraph #ai7
reflects an am5d;t 6sec;n #fg.b4 ,!
am5d;t elim9ates un9t5d$ results =
taxpay]s :o use ! ca% basis me?od (
calculat+ 9come :5 9t]e/ is pd on    #ej
              ,,it-#eba;,r           f#i
! acquisi;n (a pass5g] vehicle4 ,!
am5d;t applies 6tax,n ye>s & fiscal
p]iods -m5c+ af ,june #ag1 #aihg t 5d af
#aihg4
  ,9 =m] p>agraph #ac ! -;ts 3c]n+ !
transf] ( vehicles f class #aj 6class
#aj.a h n be5 c>ri$ =w>d z !y >e no l;g]
relevant4
  ,=m]s p>agraphs #bb 6#bd h n be5 c>ri$
=w>d z ! topics 4cuss$ 9 ^? p>agraphs >e
fully describ$ 9 ,r5tal ,9come1 a
supple;t>y 9come tax guide4
  ,an app5dix 0 a4$ 6illu/rate "s (!
provi.ns 4cuss$ 9 ! bullet94
  ,"?\t ! bullet9 we h delet$ obs]v,ns :
>e no l;g] relevant & we h revis$ "s (!
^w+ 6improve r1dabil;y )\t alt]+ !
sub/.e4





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