Can I write off a cell phone purchase to my business?

[Mar]

When reading form T4002 at the bottom of page 23 it states,

"If you buy a computer, cellular telephone, fax machine, or other such equipment, you cannot deduct the cost."

Am I correct in reading this to mean that I can't write off the purchase of a computer nor cell phone? That doesn't make sense, how do I do business without a phone and computer? I make websites so everything I do is on the internet. Did I interpret it wrong?
The business is a sole proprietorship.

[UndrgroundRider]

No, you have to read the line after that.

If you buy a computer, cellular telephone, fax machine, or other such equipment, you cannot deduct the cost. You can deduct CCA and interest you paid on money you borrowed to buy this equipment that reasonably relates to earning your business income.

That means you can deduct a certain amount of depreciation each year, but you can't deduct the total cost all at once.

[C_Dave45]

Originally posted by UndrgroundRider
No, you have to read the line after that.



That means you can deduct a certain amount of depreciation each year, but you can't deduct the total cost all at once.

I thought they temporarily changed that to allow 100% CCA on computers

Computers

The budget proposes a temporary 100-percent CCA rate for eligible computers and software (described in CCA Class 50) acquired after January 27, 2009 and before February 2011. As this enhanced rate will not be subject to the rule that generally only allows half the CCA write-off otherwise available in the year the asset is first available for use, businesses can fully deduct the cost of eligible computers and the system’s software in the first year that CCA deductions are available.

*from http://www.kpmg.ca/en/services/tax/tnf/tnfc0906.html

[Jlude]

You can deduct 50% of the value, each year.

[Xtrema]

This is where getting a cell phone as part of monthly plan make more sense than buying a cell phone out right.

Easier for book keeping.

[tom_9109]

Originally posted by Jlude
You can deduct 50% of the value, each year.

and only half of that 50% on the first year.

[Mar]

Originally posted by UndrgroundRider
No, you have to read the line after that.



That means you can deduct a certain amount of depreciation each year, but you can't deduct the total cost all at once.

Thanks, I appreciate your help even after busting your balls in the other thread.

So does anyone know for sure? Is it 100%? 50%? 25%? All three answers have been posted here, I was wondering if anyone has worked with an accountant on this stuff before. I have a $1100 laptop and I'm buying a $500 phone so I was curious on what I'd be writing off in April.

[tom_9109]

http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-09e.pdf



pages 35-36

And if it was bought in 2010 you can write off until the end of this year.


and really the CRA website is easy to use, and the information is much more accurate than beyond.

[Mar]

Originally posted by tom_9109
http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-09e.pdf



pages 35-36

And if it was bought in 2010 you can write off until the end of this year.


and really the CRA website is easy to use, and the information is much more accurate than beyond.

Ah, you nailed it. Same document I posted a link to but different page, thanks.
So from that document on page 36, my laptop would fall under class 52 and be eligible for 100% writeoff since it was bought in March 2009:

Class 52 (100%)
Include in Class 52 with a CCA rate of 100% (with no
half-year rule) general-purpose electronic data-processing
equipment (commonly called computer hardware) and
systems software for that equipment, including ancillary
data-processing equipment if acquired after
January 27, 2009, and before February 2011. To qualify for
this rate the asset must also:
■ be situated in Canada;
■ not have been used, or acquired for use, for any purpose
before it is acquired by the taxpayer;
■ be acquired by the taxpayer:
– for use in a business carried on by the taxpayer in
Canada or for the purposes of earning income from
property situated in Canada; or
– for lease by the taxpayer to a lessee for use by the
lessee in a business carried on by the lessee in Canada
or for the purpose of

The cellular phone I want to buy seems like it could fit into Class 8:

Class 8 (20%)
Class 8 with a CCA rate of 20% includes certain property
that is not included in another class. Examples are
furniture, appliances, tools costing $200 or more
($500 or more under proposed changes), some fixtures,
machinery, outdoor advertising signs, refrigeration
equipment, and other equipment you use in business.
www.cra.gc.ca 35
Photocopiers and electronic communications equipment,
such as fax machines and electronic telephone equipment
are also included in Class 8.

That sucks, I wanted to write off the whole price of the phone. 20% is pretty low. Or is that 20% per year for 5 years as a depreciating value?

[Dope Dealer]

Originally posted by Mar
That sucks, I wanted to write off the whole price of the phone. 20% is pretty low. Or is that 20% per year for 5 years as a depreciating value?

It's 20% per year, but you have to apply the 1/2 year rule on the cost of the phone for the year in which you purchased it. Every year thereafter would be 20% CCA.

As for the computer, it is 100% (Class 52.. no 1/2 year rule as it is 100% straight line method).

[Mar]

Originally posted by Dope Dealer


It's 20% per year, but you have to apply the 1/2 year rule on the cost of the phone for the year in which you purchased it. Every year thereafter would be 20% CCA.

As for the computer, it is 100% (Class 52.. no 1/2 year rule as it is 100% straight line method).

Dope Dealer........cell phone........business write off........hmmmmmmmmmm........

So are you saying I can only write off 10% this coming April, 20% each other April and then 10% for the final April 4 years from now?

[tom_9109]

I tend to 'accidentally' write the amount of my cell phones off as an office expense. Same as paper etc because i get a new one almost yearly. If they ever audit you then you can say it was a mistake and the receipt must have gotten mixed in.

[Mar]

Is it possible to get some form of acceptable receipt or paperwork from some guy selling a used phone? There's one in the Marketplace here and I'm wondering if I can write off a purchase of a used phone.

[tenth]

Originally posted by Mar
Ah, you nailed it. Same document I posted a link to but different page, thanks.
So from that document on page 36, my laptop would fall under class 52 and be eligible for 100% writeoff since it was bought in March 2009:


The cellular phone I want to buy seems like it could fit into Class 8:


That sucks, I wanted to write off the whole price of the phone. 20% is pretty low. Or is that 20% per year for 5 years as a depreciating value?

The CRA has recently released a statement on smartphones, which is pretty much everything these days. If it's a blackberry, iphone, or similar device, it falls under the category of computer equipment. So Class 52 for most of 2009 (take a look at date restrictions), or Class 50 if outside the date restriction.