Claiming Art as a Depreciable Asset In Canada

Did you know that as a sole proprietor or corporation you can claim Canadian art costing $200.00 or more as an asset on your taxes in Canada, allowing you to depreciate it over time (i.e. deduct a portion of it each year as an expense). There are certain conditions to be met, which I will outline.

The first is that artwork has to be created by someone who was Canadian when the art was made.

Non-Canadian art is not eligible, so if you have an artwork costing more than $200.00 that was not produced by a Canadian it cannot be claimed.

The second is that the artwork cannot be “an engraving, etching, lithograph, woodcut, map or chart, made before 1900” or an antique (furniture or otherwise) produced more than 100 years before it was purchased costing $1,000.00. These assets cannot be claimed, even if the artist or artisan is Canadian.

The third is that items should be depreciated as Class 8 assets, meaning that they are, generally speaking, depreciated on a declining balance basis at 20% (20% of the balance of the cost of the asset less all-time depreciation claimed is taken into expense, meaning each year the depreciation is less than the previous year).

The fourth is that art should serve a business purpose. If it is for your personal use, i.e. hanging in your home and employees or clients won’t see it, then it should not be claimed.

There you go! For all those interested in purchasing art for their business. If you have questions about the above feel free to contact me.

References

https://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._945/page-18.html#h-586441

https://artmatch.ca/is-canadian-art-tax-deductible/