Automotive

Lease payment write off

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  • Jul 29th, 2020 2:46 am
[OP]
Deal Addict
May 30, 2012
4167 posts
1550 upvotes
BC

Lease payment write off

CRA has two existing conditions:
1) a max of 800$/month
2) MRSP ceiling < 30k (higher MRSP will be prorated)

So, what MRSP and monthly payment combo will give you most monthly deduction?
3 replies
Deal Addict
Jan 28, 2017
1068 posts
1183 upvotes
iownyou wrote: CRA has two existing conditions:
1) a max of 800$/month
2) MRSP ceiling < 30k (higher MRSP will be prorated)

So, what MRSP and monthly payment combo will give you most monthly deduction?
Someone correct me if I'm wrong. For #2, you are essentially electing to use CCA allowance. See Class 10.1 - Your text to link here...

Vehicle write off per year is based on the perscribed rate on a declining balance method - see link above. Under most cases, unless you are leasing a barebones Corolla for your business, you're better leasing vs buying and claiming CCA allowance. Also, CCA assumes you own the asset (not lease or finance). Hence, why many small business owners lease *higher end* cars
[OP]
Deal Addict
May 30, 2012
4167 posts
1550 upvotes
BC
bear20 wrote: Someone correct me if I'm wrong. For #2, you are essentially electing to use CCA allowance. See Class 10.1 - Your text to link here...

Vehicle write off per year is based on the perscribed rate on a declining balance method - see link above. Under most cases, unless you are leasing a barebones Corolla for your business, you're better leasing vs buying and claiming CCA allowance. Also, CCA assumes you own the asset (not lease or finance). Hence, why many small business owners lease *higher end* cars
You can't just get 800$ deduction on a luxury car (MSRP >30k according to CRA). Amount over 30k will be prorated. Small business owners lease higher end cars because the lease payment is lower and deduction is tax efficient, but definitely not 800$ month on a 70k car.
Newbie
Jul 26, 2014
75 posts
22 upvotes
Brampton, ON
would love for an actual accountant to chime in on this

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