Commonwealth Consolidated Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

INCOME TAX ASSESSMENT ACT 1997 - SECT 40.370

Balancing adjustments where there has been use of different car expense methods

             (1)  An amount is included in your assessable income or you can deduct an amount under this section instead of section 40- 285 if:

                     (a)  a * balancing adjustment event occurs for a * car you * held; and

                     (b)  you have deducted or can deduct an amount for the decline in value of the car for an income year under this Division; and

                     (c)  you chose the "cents per kilometre" method in Subdivision 28-C for deducting your car expenses for the car for one or more other income years.

Note 1:       This means if you have only used the "log book" method since you began using the car, you calculate the assessable amount or deductible amount under section 40- 285.

Note 2:       Also, if you have only used the "cents per kilometre" method since you began using the car, no amount is assessable or deductible under this section or section 40- 285.

             (2)  Work out the amount you include in your assessable income or the amount you can deduct in this way:

Method statement

Step 1.    Subtract the * car's * adjustable value just before the * balancing adjustment event occurred from the car's * termination value.

Step 2.    Reduce the step 1 amount by the part of the * car's decline in value that is attributable to your using the car, or having it * installed ready for use, for purposes other than * taxable purposes. You do this by applying the formula in subsection 40-290(2).

Step 3.    Multiply the step 2 amount by the total number of days for which you deducted the decline in value of the * car under this Division.

Step 4.    Divide the step 3 amount by the total number of days you * held the * car.

Step 5.    The step 4 amount is a deduction if it is negative or it is included in your assessable income if it is positive.

             (3)  In working out the * adjustable value for the income years for which you chose the "cents per kilometre method", assume the decline in value was calculated under this Division on the same basis as those income years when that method did not apply.

             (4)  In working out the reduction in step 2 for the income years for which you chose the "cents per kilometre method", assume that:

                     (a)  you had not chosen that method for the * car; and

                     (b)  Division 28 (about car expenses) had not applied to the car; and

                     (c)  20% was the extent of your use of the car for * taxable purposes.

Guide to Subdivision 40-E



AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback