Capital Cost Allowance Rates for Computers

Capital cost allowance (CCA) is essentially the term used for depreciation in tax parlance. Currently, the cost of computers and associated

peripheral hardware are pooled in a class of assets that allows for CCA at a rate of 30% on a declining-balance basis (only 15% in the year of acquisition). Generally, the result of this rule is that if a computer is scrapped or sold for an amount lower than its undepreciated value, the loss is not recognized for tax purposes unless there are no other assets left in the pool at the end of the year (usually unlikely since the computer is usually replaced). Therefore, the current rules also allow for an election to have each computer system (costing at least $1,000) or other certain "rapidly-depreciating electronic equipment" each put in a separate "pool" (rather than pooled with other similar assets) in order to allow accelerated loss claims (i.e., the loss is available on the computer's disposition because there would be no other computer equipment left in the "pool").