Lease payment write off vs CCA

[C_Dave45]

Question for you CA's and CGA's....

Okay, when you have a vehicle lease, 100% of the payments are a write-off, correct? In a purchase it's just the interest, and CCA, IIRC.

I'm coming to the end of my Van's lease. The buyout is only about $2500. Once I do that, I own the van. What equity do I give it to my business? It's obviously worth more then the $2500....but I've already written off all of the lease payments.

Any ideas?

[Minimalist]

Not a CA, CGA...

Doing research in 2015, I was under the impression up to $800 a month was a write-off. Things change?

[Xtrema]

Originally posted by Minimalist
Not a CA, CGA...

Doing research in 2015, I was under the impression up to $800 a month was a write-off. Things change?

I think that part is done. He is talking about buyout under the company so the van officially becomes an asset.

I think Dave is worried about if the van is set at the buyout price, when he sell it later for $5K, he will have to file capital gain on $2500.

[Minimalist]

Call Revenue Canada, they have been unexpectedly helpful to me in the past. I'm surprised Dave seems to not have an accountant as they are a yearly write off and in my experience have a few suggestions on how to take more money home.

[Jlude]

Originally posted by Minimalist
Not a CA, CGA...

Doing research in 2015, I was under the impression up to $800 a month was a write-off. Things change?

That's correct, the max payment for a lease is $800 and if you buy outright, it's $30,000 maximum on the cost of the vehicle.

Unfortunately, your van is only worth more than the $2500 if you sell it. You've depreciated the value down year after year to the point now that it's not worth more than $2500 in the eyes CRA.

[bigboom]

If you've written off lease payments on the van and then buy it for $2500, the value you record on the books is $2500. Essentially, when you buy the van it's considered a new capital purchase and it's an asset at $2500.

[C_Dave45]

Originally posted by bigboom
If you've written off lease payments on the van and then buy it for $2500, the value you record on the books is $2500. Essentially, when you buy the van it's considered a new capital purchase and it's an asset at $2500.
Gotcha. That makes sense.

[suntan]

Set fire to van, collect insurance money.