Capital Cost Allowance (CCA)

The capital cost of a passenger vehicle purchased after 1997 is restricted to $26,000, and the restriction increased to $27,000 for passenger vehicles purchased after 1999. These amounts do not include GST and PST. The annual CCA is 30 percent on a declining balance, except for the years of acquisition and sale, when the allowance is limited to one-half, or 15 percent.

Monthly Interest Deduction

The deduction for interest on money borrowed to purchase a passenger vehicle is restricted to a maximum of $250 per month.

Monthly Lease Deduction

The monthly passenger vehicle lease deduction is restricted to $650 per month for agreements entered into after 1997, and to $700 a month for agreements entered into in 2000. These amounts do not include GST and PST.

Business Meals and Entertainment

The Income Tax Act imposes a restriction on the deductibility of business-related meals, beverages and entertainment expenses. With certain exceptions, only 50 percent of such expenses are deductible. The 50 percent deduction also applies to the GST paid on the meals and entertainment expenses.

Recreational Properties and Club Dues

No deduction is allowed for the use or maintenance of a yacht, camp, lodge, golf course or health club, unless the taxpayer made or incurred the expense in the ordinary course of his business of providing the property for hire or reward.

Also, the Income Tax Act prohibits the deduction of any expense incurred by the taxpayer in respect of membership dues (whether initiation fees, green fees or otherwise). This entitles the taxpayer, his or her employees or anyone else to use the facilities of any club whose main purpose is to provide dining, recreational or sporting facilities for its members.