The first time I read this article, I was not sure I fully understood. It was mentioned at one point that this deduction was valid for an individual. What you should know is that this individual must be in business, such as a self-employed person, he can then benefit from this tax reduction. It is also necessary that he has sufficient income to have to pay tax.
In fact, this tax deduction is interesting for Companies or Companies who buy a work of art for the purpose of investment and can amortize the expense over more than a year. They must display the works in their place of business.
They can claim an annual capital cost allowance corresponding to 20% of the amount paid, federally, and 33.3%, in Quebec. The half-rate rule, however, limits the deduction that can be claimed by the taxpayer in the first year to 10% at the federal level and 16.67% in Quebec. ''
They will therefore have a reduction of about half of the percentage they are entitled to in the first year. For the rest, it gets complicated. An accountant would know how to explain it.
The eligible works are as follows:
- Print, engraving, drawing, painting (Painting) and other works of art of a similar nature, the cost of which is at least $ 200
- Tapestry or carpet woven by hand or whose applications are made by hand and the cost of which is at least $ 215 per square meter (10.76 ft2);
- Engraving, lithography, woodcut or map made before 1900;
- Furniture or any other object manufactured more than 100 years before the date of acquisition and the cost of which is at least $ 1,000
The conditions to be respected:
The artwork must have been produced by an artist who was a Canadian citizen or permanent resident on the date it was created;
- The work must have been acquired from an arm's length person (not in the family)
- The work must have been acquired for the sole purpose of earning business income (adding value), for example to decorate a reception, a meeting room, hallways or a shareholder's office and be the view of the company's customers. The purchaser cannot bring the work to his personal residence, unless he has an office there where clients go, as is the case with certain self-employed workers (lawyers, accountants, consultants, etc.).