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T2 Schedule 8- Class 14 Licenses Error Message- Exceeds Maximum Amount Allowed

#1 User is offline   Rod Patterson Icon

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Posted 23 August 2010 - 06:05 PM

I have a new company that has never filed a T2 Return since incorporation in 2005 (i.e. May 10) with fiscal year ending Dec.31. I have Profile tax software for 2005 and later years.

Company has purchased a License to certain Rights for a 5-year period with automative option to renew at the option of the company for a further 2 years(i.e. a 7-year life on the license). The purchase cost for the license is $200,000.

This is a Class 14 Asset which, under the CCA rules, can be written off over the life of the property (i.e. 14.286% per annum on a straight-line basis, with no applicable half-year rule (i.e.$28,571 per year max.). First year (2005)is not a full year, but 144 days of 365, which means $28,571 x 144/365 = $11,272 max.CCA for year 1.

T2 Return completed for 2005. Audit message: "T2 RSI #00812.7 S8/1 CCA claimed exceeds the maximum amount allowed. Please correct." and, of course, highlights Column 12 "CCA for the year".

Unless and until the amount of CCA claimed is Zero, Profile will not allow me to print RSI view T2 for filing with CRA.

Experimentally, I chose Nil CCA for 2005, and the error message went away, and printin RSI enabled. Then I went on to Year 2 (i.e. 2006- full calendar year-end). T2 Return completed for 2006. Audit message exactly the same for 2006 as was for 2005. Identical problem exists for 2006, with no RSI view printable.

Is this a software glitch in Profile, or am I doing something wrong here?


#2 User is offline   Lee@Intuit Icon

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Posted 24 August 2010 - 01:32 PM

Hi Rod,

Have you filled-in the date the Class 14 asset expires at the top of the S8Class form where you entered the rest of the asset info? I believe this will trigger the calculations you were expecting.

I can see that the wording for the field reads "Expired (Class 14)" which is in the past tense. I'm going to look into changing that to be more clear.

Hope this helps.


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