Regarding where a taxpayer acquired Class 14.1 property after 2016 pursuant to a s. 85 rollover, CRA noted that, for taxation years ending before 2017, Reg. 1100(1)(c.1)(i) allowed a claim of additional CCA of 2% on a portion of the undepreciated capital cost of Class 14.1 property at the beginning of January 1, 2017, and stated:
Consequently, a taxpayer is not eligible for the additional deduction provided for in subparagraph 1100(1)(c.1)(i) in respect of a property in Class 14.1 of Schedule II where that property is acquired by the taxpayer after December 31, 2016 as a result of a rollover pursuant to section 85 … .
If you are of the view that this tax treatment is not appropriate, we invite you to contact the Department of Finance.