How do I know whether a particular capital cost is eligible as a designated immediate expensing property (DIEP)?

Designated immediate expensing property (DIEP) refers to a property category eligible for accelerated tax depreciation. This means that business owners can claim the full cost of the property as a deduction in the year it was purchased, rather than spreading the deduction over the useful life of the property.

DIEP includes certain types of depreciable property used primarily for manufacturing or processing goods for sale or lease, including machinery, equipment, and buildings.

Immediate expensing property (IEP) is property acquired by an eligible person or partnership (EPOP) and includes all property subject to the capital cost allowance (CCA) rules, but excludes property included in the following CCA classes (generally long-lived asset classes):

• Classes 1 to 6 (e.g., buildings, greenhouses, structures);
• Class 14.1 (e.g., goodwill);
• Class 17 (e.g., surface construction such as roads);
• Class 47 (e.g., transmission or distribution equipment and structures used for transmission or distribution of electrical energy);
• Class 49 (e.g., pipelines, including monitoring devices, valves, etc. used for the transmission of oil and gas); and
• Class 51 (e.g., pipelines, including control and monitoring devices, valves, etc. used to distribute natural gas).

For more information please see Canada Revenue Agency(CRA)  

Expansion of the Eligibility for Tax Support for Business Investments 

How to complete the capital cost allowance (CCA) charts

For more information please see our TurboTax articles:  

Accelerated Investment Incentive 

Tax Tip: Tools of the trade deduction

For more clarification please contact the CRA at 1-800-959-8281.

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