Question

The amount of capital cost allowance a company takes for a given tax year​ ________.

A. is the median amount between the minimum allowable CCA and the maximum allowable CCA
B. is prescribed within the Income Tax Regulations
C. is any amount the company chooses up to the maximum allowable
D. is the same amount for all assets within a class

Answer 1

The amount of capital cost allowance a company takes for a given tax year is prescribed within the Income Tax Regulations.

Step-by-step explanation:

In the context of corporate taxes, the amount of capital cost allowance (CCA) a company takes for a given tax year is determined by specific rules.

Option B is correct: The amount of CCA a company takes is prescribed within the Income Tax Regulations. These regulations dictate the allowable CCA rates for different classes of assets, and companies must adhere to these prescribed rates.

For example, if a company has a Class 10 asset (e.g., computer equipment) and the prescribed CCA rate for that class is 30%, then the company can claim a maximum CCA of 30% of the asset's cost.