Question

which of the following cases is not eligible for capital cost allowance in the current year? question 4select one: a. a building under construction is scheduled for completion in eighteen months. the building will be used as a production facility. b. a new engine is installed in a semi-trailer that is used to haul produce to the united states. c. a piece of equipment was purchased during the year on a 5 year financing term. d. an employee owns and uses an automobile in the course of her employment duties during the month of december. her pay for december is not received until january of the following year.

Answer 1

A building under construction that is scheduled for completion in eighteen months and will be used as a production facility is not eligible for capital cost allowance in the current year because it is not yet in use to generate income.

Step-by-step explanation:

The case not eligible for capital cost allowance (CCA) in the current year is: a building under construction scheduled for completion in eighteen months that will be used as a production facility. CCA is generally allowed on depreciable property that a business or taxpayer uses to generate income. However, a property under construction that is not available for use before the end of the year cannot be depreciated in that year because it is not yet in a condition to generate income.

On the other hand, the new engine installed in a semi-trailer used to haul produce, the piece of equipment purchased on a 5-year financing term, and the employee's use of an automobile for employment duties are all instances where the asset is in use and thus potentially eligible for CCA.