Question

Intangible capital assets are included in which CCA​ class(es) for income tax​ purposes?

A. Class 13
B. Classes 14 and 14.1
C. Classes 8​ & 10
D. Classes 10 and 10.1

Answer 1

Intangible capital assets are included in Classes 14 and 14.1 for income tax purposes, with Class 14.1 currently governing the amortization of these assets at a declining balance rate of 5% per year.

Step-by-step explanation:

Intangible capital assets are included in Classes 14 and 14.1 for income tax purposes. Class 14 used to apply to eligible capital expenditure on things like patents or franchises before January 1, 2017. After this date, the new Class 14.1 replaced Class 14 for taxation purposes. It provides a means to track expenses on intangible capital assets over time and depreciate them accordingly for tax benefits, in a similar manner to tangible capital assets.

Important to note is that Class 14.1 assets are subject to a declining balance method at a rate of 5% per year, which impacts how these assets are amortized for tax purposes. Therefore, the correct answer to the question about which CCA​ (Capital Cost Allowance) class(es) intangible capital assets are included in, would be B. Classes 14 and 14.1.