Business -> Capital or Expense
Everyone in business, or with a rental property, is faced at some point with the decision as to whether an expense is capital or current in nature - in other words, whether the cost should be capitalized or expensed. There are general guidelines that can be followed to determine the answer.Current expense:
Items that can be expensed but are used partly for business use and partly for personal use would be expensed according to the percentage of business use. Capital items that are also used partly for personal use would be capitalized at 100% of the cost, and depreciation would be determined each year based on the % of business use. See, in CRA's guide T4002, Personal use of property under "Special situations" in Chapter 4.
Business Expenses - What expenses can I write off against my business income?
Canada Revenue Agency (CRA) Resources
Business Expenses, with links to more information on each type of expense
Revised: April 29, 2021
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