Typical Example: The Popular 21 Foot Class C

A $54,900 Motorhome is purchased with $5,000.00 down and the balance is financed at 6.9% for 10 years.

Operation During the First Year
Cash Inflow: Rental Income for 18 weeks at Mid-Season Rate $129/day @ 60% = $9,752.40


Cash Outflow:   Deductible Expenses:
Finance Payments
Insurance
Service
License Plates
$ 6,921.77
$ 2,000.00
$ 250.00
$ 90.00
$ 9,261.77 		  Interest on Financing
Insurance
Service
License Plates
Capital Cost Allowance 		$ 2,781.70
$ 2,000.00
$ 250.00
$ 90.00
$ 4,630.70
$ 9,752.40

 

Cash Inflow - Cash Outflow = Total Tax Free Profit
$9,752.40 - $ 9,261.77 = $ 490.63


Under the current tax system, capital cost allowance can be used with other allowable
deductions to equal total cash inflow. The above is a hypothetical example.
All figures are subject to change.