Capital Cost Allowance (CCA) is the means by which Canadian businesses may claim depreciation expense for calculating taxable income under the Income Tax Act (Canada). Similar allowances are in effect for calculating taxable income for provincial purposes. General rules for CCA calculation Capital property Capital property eligible for CCA excludes: land property the cost of which is deductible in computing the taxpayer's income property that is described in the taxpayer's inventory property that was not acquired for the purpose of gaining or producing income property that was acquired by an expenditure in respect of which the taxpayer is allowed a deduction under section 37 specified artwork and crafts acquired after November 12, 1981 property that is a camp, yacht, lodge or golf course or facility acquired after December 31, 1974 if any outlay or expense for the use or maintenance of that property is not deductible by virtue of paragraph 18(1)(l) CCA is calculated on undepreciated capital cost ("UCC"), which is generally defined as: the capital cost of property that is acquired or made available for use (whichever is the later date) plus legal, accounting, engineering or other fees incurred to acquire the property plus, in the case of a property a taxpayer manufactures for his own use, it includes material, labour and overhead costs reasonably attributable to the property, but nothing for any profit which might have been earned had the asset been sold less the proceeds of disposition for a sold asset (but no greater than its original capital cost) less any assistance (including tax credits) the taxpayer has received with respect to the acquisition of the property less any CCA previously claimed with respect to the class Where the UCC for a class is negative, a recapture of depreciation is deemed to take place, thus adding to taxable income and bringing the balance of UCC back to zero. Where UCC for a class is positive, but all assets with respect to that class have been disposed of, a terminal loss is deemed to take place, thus deducting from taxable income and bringing the balance of UCC back to zero. CCA calculation CCA itself is generally calculated using the following items: CCA = capital cost allowance for the current fiscal period UCC = undepreciated capital cost before claiming CCA in the current fiscal period t = the proportion of days in the current fiscal period vs a normal