Step 1: Track Each Vehicle Separately
Keep a logbook for each vehicle, recording business and personal kilometers driven
Record the odometer reading on the date you switched vehicles
Note the purchase or lease date of the new vehicle
Step 2: Calculate Business Use for Each Vehicle
Determine the percentage of business use for each vehicle separately
Use the same method as a single-vehicle calculation, but apply it to each car individually
Step 3: Separate Vehicle Expenses
Track gas, maintenance, insurance, and repairs separately for each vehicle
If both vehicles were financed or leased, track loan interest or lease payments separately
Keep records of parking fees and tolls if applicable
Step 4: Capital Cost Allowance (CCA) Adjustments
If you purchased a new vehicle, you must calculate CCA correctly:
First Vehicle: Claim CCA only for the months it was used before switching
New Vehicle: Determine the fair market value at the time of purchase and start a new CCA calculation
If you sold or traded in the first vehicle, report the sale price and adjust the Undepreciated Capital Cost (UCC)
Step 5: Reporting on Your Tax Return
Use CloudTax to enter details for each vehicle
CloudTax makes it easy—just follow the step-by-step guide to enter expenses and mileage
Why This Matters
Accurately tracking vehicle changes ensures:
✅ Maximum tax deductions
✅ Correct business-use percentage calculations
✅ CRA compliance to avoid audit issues
CloudTax simplifies everything—no complicated calculations needed!