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Claiming lease/finance payments?

Discussion in 'Canada' started by asb9987, Sep 28, 2005.

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  1. asb9987

    asb9987 F1 Rookie

    Dec 4, 2004
    4,191
    Toronto
    Full Name:
    A. B.
    #1 asb9987, Sep 28, 2005
    I was just wondering how much of a car's monthly lease/finance payment can one claim in his/her business? Is there a certain percentage? What is the deductible based on? Need to know because my father was thinking of grabbing an M5 (yes, I know that it has a 2yr. waiting list) or another medium-high end vehicle and we're unsure of how much of the monthly payment can be claimed.

    Thanks for the info guys!

    EDIT: I am located in Southern Ontario for those that haven't figured it out yet :p
     
  2. Ferrariguy2

    Ferrariguy2 F1 Rookie

    Apr 5, 2004
    3,092
    Naples, Florida
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    Chief
    #2 Ferrariguy2, Sep 28, 2005
    I could be wrong, but I thought it was done on a percentage of how much the car is used for the business... similar as using a home office as a deduction.
     
  3. Kds

    Kds F1 World Champ

    May 1, 2003
    10,994
    Canada and Brasil...
    #3 Kds, Sep 29, 2005
    Generally speaking it currently is, or was, a maximum of $850 + GST per month on a lease and the maximum for CCA (capital cost allowance deduction) purposes on a purchase was $28000 plus $250 a month if loan interest was paid as well.

    In both cases different formulas are applied if the car was more than those figures with the result being a reduced deductable amount as a result.

    See your accountant as this is getting revisited every year by the government it seems. Percentages for personal and business use also come into play here as do stand by charges and other factors. Trying to write off a six figure high end car thru your business is raising a big red flag for the CCRA.

    I wouldn't do it.
     
  4. asb9987

    asb9987 F1 Rookie

    Dec 4, 2004
    4,191
    Toronto
    Full Name:
    A. B.
    #4 asb9987, Sep 29, 2005
    I didn't mean to say that ALL of the car was to be written off, but even small chunks of it are still warranting suspicions? Ie. since it is a 6-fig vehicle would be far too much right? So perhaps somehting along the 60k range might not be so bad....
     
  5. Kds

    Kds F1 World Champ

    May 1, 2003
    10,994
    Canada and Brasil...
    #5 Kds, Sep 29, 2005
    Yes it will generate suspicion of the overall return because no one needs a 6 figure vehicle for their business except a dealer of 6 figure cars.

    It may be legal and above board......but it will make them look.......and no matter how honest and legit your returns are......no one needs the CCRA or the IRS looking at them in any greater depth than is absolutely necessary.

    Just my non-deductible .02 cents worth.
     

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