[tracer]

Originally Posted by specialkay

You could put it through as a cost of doing business. Same as repairing your truck or repairing you side kit (if you had one) Everyone is different but I'd probably keep it separate from the rest of the trailer and write off the monthly payments until it's payed for.

I can't write off the monthly payments because it's a lease with $1 buyback at the end. Our Revenue Agency treats this as a financing contract not regular lease so you have to use DEPRECIATION to write it off. I actually prefer the depreciation method because it's more flexible and I can write off much more money in one year, as much as 30% of the total cost of the rolling tarp system.

[tracer]

Originally Posted by skrissel

Hey, I should have been more clear. I have tires and aluminum wheels that were on my flatbed.

Thanks!

-scott

Scott, i'll send you an email.

[specialkay]

If you roll it into the trailer value won't you only be able to write off 10% of the total value (trailer and kit) the first year?. I believe it's 10% and then 20% for the next 4 years and 10% in the fifth year. I know those numbers aren't 100% right but I think trailer depreciation rules are the same as truck depreciation rules. If I'm wrong please correct me. If its a replacement or repair it's 100% in the year you bought it. I don't think it matters if the part is paid for in full or not as long as it's being used for your business. Again feel free to correct me if I'm wrong but I know for a fact my accountant has written off slider kits in one year before.

[tracer]

Originally Posted by specialkay

If you roll it into the trailer value won't you only be able to write off 10% of the total value (trailer and kit) the first year?. I believe it's 10% and then 20% for the next 4 years and 10% in the fifth year. I know those numbers aren't 100% right but I think trailer depreciation rules are the same as truck depreciation rules. If I'm wrong please correct me. If its a replacement or repair it's 100% in the year you bought it. I don't think it matters if the part is paid for in full or not as long as it's being used for your business. Again feel free to correct me if I'm wrong but I know for a fact my accountant has written off slider kits in one year before.

Well, I looked into this seriously and in Canada they allow "up to 40%" a year for a Class 8 truck, and "up to" 30% for a transport trailer. The CRA website say, "usually 50% of this is deducted during the first year" but they didn't say it's against the law. So, when I bought the truck in April 2007, I claimed the entire 40% of the Cnd$64,500 purchase price when doing my 2007 tax in April 2008. Guess what? No one objected and I saved a ton of money on taxes. So, I'm going to claim the entire 30% for the trailer in 2009.

[tracer]

Originally Posted by specialkay

If you roll it into the trailer value won't you only be able to write off 10% of the total value (trailer and kit) the first year?. I believe it's 10% and then 20% for the next 4 years and 10% in the fifth year. I know those numbers aren't 100% right but I think trailer depreciation rules are the same as truck depreciation rules. If I'm wrong please correct me. If its a replacement or repair it's 100% in the year you bought it. I don't think it matters if the part is paid for in full or not as long as it's being used for your business. Again feel free to correct me if I'm wrong but I know for a fact my accountant has written off slider kits in one year before.

Canadian rules

Class 16
Capital Cost Allowance: 40% a year

Taxis, vehicles you use in a daily car-rental business, coin-operated video games or pinball machines acquired after February 15, 1984, and freight trucks acquired after December 6, 1991, that are rated higher than 11,788 kilograms.

[allan5oh]

It is 20% for the first year then 40% all other years for trucks, and 15%/30% for trailers.

Basically for 2009 if you deducted your trailer down to say $30,000, the value of the tarping system would be added for 2010, say it costs $10,000. Now you have $40,000 to depreciate instead of $30,000. It sucks because you are spending a lot of money and not getting as much depreciation, but overall it usually saves you taxes by smoothing out your income year to year.

[tracer]

Originally Posted by allan5oh

It is 20% for the first year then 40% all other years for trucks, and 15%/30% for trailers.

Basically for 2009 if you deducted your trailer down to say $30,000, the value of the tarping system would be added for 2010, say it costs $10,000. Now you have $40,000 to depreciate instead of $30,000. It sucks because you are spending a lot of money and not getting as much depreciation, but overall it usually saves you taxes by smoothing out your income year to year.

Alan, you can deduct 100% of the allowed depreciation in the first year. I did it and it worked. Unless you have a reason to "go slow".

[allan5oh]

Just because you sent it in that way, does not mean that it is ok. If you are audited likely they will change that.

[specialkay]

Thanks for the correction Allen. I couldn't find the #'s when I posted. BTW Tracer I'm from southern Ontario also. I see you around here and there.

[tracer]

Originally Posted by specialkay

Thanks for the correction Allen. I couldn't find the #'s when I posted. BTW Tracer I'm from southern Ontario also. I see you around here and there.

Right now I'm deep deep deep in the South enjoying some R&R in Jacksonville, FL. I'll be easier to spot when I come back because after Jan-16th my bright yellow truck will be pulling a RED rolling tarp Wilson stepdeck with a WHITE nose cone on the front. I don't expect any wildlife crossing the highway in front of the truck as I think they'll be scared by all these loud colors