CM-871 Overhead...

[Hammerhead]

(01-17-2018 )Starlight Wrote:  My accountant puts all tools purchases under parts purchases. They are assets but wear out therefore need to be replaced from time to time so why would they need to be depreciated like a hard asset over a period of years. Not a very good accountant.

Yes for you as a shop, tools are consumed/depreciate at a much faster rate than as an "accessory/maintenance component" was how my acct explained it to me, so your threshold is much higher.
I'm sure if you bought a shiny new >$10k toolbox your acct would depreciate it because a toolbox doesn't wear out in one year, however it could easily be argued that what for an O/O like ddlighttruck or myself would be a several years useable tool, for your would easily be worn out in time for an annual depreciation.
Same idea as computers and specialty software, it depreciates out in 3 years for us who use a computer (not a diagnostic unit, but an office unit) to "enhance/simplify our business", but I have a friend that is a custom computer builder and software developer. Because of his "need to be on top of advancements" he is allowed to completely write off/depreciate 6 computers by 90% in the first calendar year of production with no problem...Cousin Justin's CRA henchmen would take us straight to court for trying that...

He also explained the exceptional circumstance claim;
Now if I was to purchase a mid-stop counterbore tool during an inframe, I could argue that it would be acceptable to depreciate/write off this tool in this tax year because the cost of the tool is less than the cost of labour to rebuild my motor, and I already own the rest of the tools to complete said job, so it is a financially justifiable expense, even as a "one time use". If the labour costs of having an inframe done was less than the cost of this one tool, then too bad so sad, depreciate over 5 years...

This is why I drive a truck instead of being a tax lawyer...too damn many "exceptions".