Known Issue: Immediate Expensing in T1 and T5013, Income Before CCA Deductions

Under paragraph 1100(0.1)(c) of the Income Tax Regulations, immediate expensing claims of CCA for individuals (T1) and partnerships (T5013) is limited to the amount of income earned (before deducting CCA) from the business or property for which the DIEP is used. This income earned from the business or property must include recapture as an addition and terminal loss as a deduction. However, TaxCycle currently calculates the income earned from the business or property without taking into account recapture and terminal loss.

Workaround (T1)

On the T1 IEL worksheet, override the Net income before any CCA deductions by adding the amount of recapture or subtracting the amount of terminal loss. 

Workaround (T5013)

On T5013 Schedule 8, Part 2, override the amount on line 156, Net income for income tax purposes before any CCA deductions, by adding the amount of recapture or subtracting the amount of terminal loss.

If the partnership has multiple sources of income:

1. On Schedule 8, Part 2, answer No to the question: Automatically calculate this table?
2. Provide the breakdown of the sources of income and enter the amount under column 2 (line 165), Income before any CCA deductions from each source, by adding the amount of recapture or subtracting the amount of terminal loss.

Anticipated Resolution

These issues will be resolved in an upcoming release.