Did you know that Canadian artwork and antiques can be a taxable expense?

Qualifying artwork can be capitalized and depreciated at a tax rate of 20% for tax purposes. To qualify, the artwork must meet the following criteria:

• the artwork must cost $200 or more
• is not held for resale and is exhibited in a place of business where it will be seen by clients
• is acquired for the purpose of gaining or producing income from an arm’s length individual
• was created by an individual who was at the time a Canadian

If the artwork has appreciated and is sold, it will result in recapture of CRA up to the amount of the original cost of the artwork and this recapture will be included in the business income. Any amounts over and above the original cost would be considered a capital gain.

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