Quote:
Originally Posted by I-Hate-Hulse
Whoa - I've always believed you wouldn't want to claim CCA on a rental condo least you trigger recapture and have to include the difference into income. After all, you're in the business of seeing your condo increase in value and you should exit the deal with a much higher resale value (hopefully).
|
Recapture means you pay income tax at your marginal rate on the amount of CCA claimed when you sell. You can avoid this by not claiming CCA.
If you don't claim CCA, you pay income tax on the amount of CCA you could have claimed, at your marginal tax rate this year.
Since money now is better than money later, I prefer to take my CCA and defer the taxes into the future. Of course, if you expect to be in a much higher tax bracket in the year you sell, you may wish to not claim the CCA.