Part 2/4 more Q&A

Remainder of questions from Part 2/4 on Keeping Records: Non Corporate Business - business assets was the topic of week 2

I know there were some people who really were not comfortable with the discussion about acquisition cost, amortization and disposition of assets when we delved into how to complete the tax return schedules for UCC and capital gains on depreciable assets.  Remember there are no capital losses on depreciable property. The video for Part 2/4 does cover this topic and I'd recommend watching the video again, or taking an advanced course in taxation.

If you aren't sure how capital gains and UCC work together, I'd recommend reading the T4037 Capital Gains guide, focusing on how proceeds are divided up between what's capital and what is recorded as a reduction of a UCC pool, and how that might create either a terminal loss or recapture.
http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html

Q: How would goodwill work?

A: Goodwill is an eligible capital property and the calculation for taxes can be found on T2125, linking to a separate schedule which shows the basic calculations. The purchase and sale of goodwill isn't covered in this course as it's pretty advanced. If there is goodwill, it's best to consult an expert on the subject, or read up on it at the CRA website, and there are a number of IT Bulletins to supplement your reading on the CRA website as well as the CCH Preparing your Income Tax book,
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/bsnss/menu-eng.html

Q: Can you go over your method of booking a vehicle purchase in QB with an unknown business use?

A: You'll find an in depth coverage of that topic in the HST Quick Method video. REmember that you can record an ITC on CCA for capital assets under the Quick Method, so this would be logical to include in that workshop.  The video sells on my website, under the Master QuickBooks tab in the eCommerce section (tab on the top of every page) www.taxdetective.ca.
It's 50% off for IPBC members. Members can drill down to Educational Discounts under Member links on the www.ipbc.ca website.

Q: Why do you use the vehicles sheet instead of using the CCA schedule for Class 10?

A: Yes, when you have three dump trucks, with no personal use element, I would definitely put them through the regular asset classification format, rather than on the vehicle schedule. The reason for using this schedule is to assist with the personal % of use and to track separate pools for each Class 10.1 asset.  It's also possible to use separate vehicle schedules for each vehicle if you're tracking the cost of each vehicle separately, and linking them all to the T2125 or to multiple forms, for example, you might have T777's for employee expenses, T2125's for business and T778's for rental and be splitting up your vehicle use into various categories by % of use.

Q: Will the QB data file be available?

A: Yes, it's available, and I"ll update it next week for current transactions. There weren't many transactions this week, so I didn't think it was worth doing.

Here's where you can find the links for both the QuickBooks and Quicken data files:
http://www.taxdetective.ca/keeping_records_business.html