This bit of news comes at a very opportune time for me personally as I teeter on the precipice of purchasing my very own iPhone (or Blackberry, or Zune, or iPod Touch – don’t ask!).
The CRA was asked whether an Apple iPhone is considered depreciable property falling into the same class as general purpose computers.
Schedule II of the Income Tax Regulations lists the various classes of depreciable capital property and the applicable rates of CCA. “General-purpose electronic data processing equipment” (i.e., laptops and computers) acquired after March 18, 2007, is included in Class 50 (55% CCA rate) and if it is acquired after January 29, 2009 and before February 2011, subject to certain other conditions, it is included in Class 52 (100% CCA rate).
“General-purpose electronic data processing equipment” is defined as electronic equipment that requires an internally stored computer program that (i) is executed by the equipment, (ii) can be altered by the user, (iii) instructs the equipment that to perform certain functions, and (iv) depends on the data processed to determine the sequence of its execution.
In the CRA’s view, an Apple iPhone would qualify as general-purpose electronic data processing equipment.
Of course, the CRA took the time to caution that only the portion of the cost of the iPhone that is used for the purpose of gaining and producing income would qualify for CCA. This means I have to keep track of all the time I will spend playing PacMan, listening to Lady Ga Ga, taking videos of natural disasters as they occur, Googling myself, chatting with my wife, my kids, my mom and my bookie, then add up this time, divide by the total time I use the iPhone and multiply the result by the total cost of the iPhone and add that amount to the appropriate CCA class (and apply the half-year rule) – and I must do it all on the day I buy the iPhone! Hopefully, there’s an App for that!