When an expenditure can be classified as either a capital asset or a regular expense, claim it as an expense. Expenses can usually be deducted in the year they are incurred, while capital assets must be deducted over a number of years by claiming capital cost allowance. The amount of an expenditure does not determine whether an item is a capital asset or an expense. Take into account issues such as whether the item purchased has a life span greater than the fiscal year, or whether something has been bettered or improved by the expenditure.
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