Class 50 (CCA computer hardware)
Class 50 is a capital cost allowance class in Schedule II of the Income Tax Regulations for general-purpose electronic data processing equipment and its systems software, acquired after a date set in the class. The regulation excludes Class 52 property and property that is principally, or is used principally as, process control, communications control or certain data handling equipment.
An asset buyer allocating price to computers and systems meets this class. The regulation describes it as general-purpose electronic data processing equipment and the systems software for that equipment, including ancillary data processing equipment. See how to claim capital cost allowance on equipment bought with a business.
What is outside it
The regulation carves out property in Class 52 and property that is principally or is used principally as electronic process control or monitor equipment, electronic communications control equipment, systems software for those, or data handling equipment other than data handling equipment ancillary to general-purpose equipment. Software that is not systems software falls under Class 12. The CRA’s class list flags proposed changes to first-year deductions for new Class 50 additions, so ask an accountant what applies on the closing date.
What to ask
- An inventory of computers, servers and network equipment in the deal, with purchase dates, since the class turns on acquisition date
- Which items are general-purpose computers and which are control, communications or data handling equipment
- The seller’s tax records showing the class and undepreciated capital cost for each group
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Government of Canada (Department of Justice)GovernmentIncome Tax Regulations (C.R.C., c. 945), Schedule II classes of depreciable property
- 02Canada Revenue AgencyGovernmentClasses of depreciable property
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