I have a question regarding the disposal of a motor vehicle over the depreciation cost limit. The car is 100% for business use, and below are the motor vehicle details.
My question is, when I fill in the tax return, should I disregard the accounting loss of $13495? Should I only include the balancing adjustment gain of $4315.21 in the tax return?
I am a bit confused because the car was sold at a loss, but it was sold with a gain in the tax return.
Original purchase price $85,090.00
Accumulated depreciation up to disposal date $41,595.00
2017 Depreciation cost limit $57,581.00
Termination value (disposal proceeds) $30,000.00
Accounting adjustable value (WDV) = $85090 - $41595 = $43,495.00
Accounting loss = $30000 - $43495 = -$13,495.00
Balancing adjustment calculation using depreciation cost limit:
Reduced termination value = $30000 x ($57581/$85090) = $20,301.21
balancing adjustable value (WDV) =$57581 - $41595 = $15,986.00
balancing adjustment gain =$20301.21 - $15986 =$4,315.21
33,438 views
2 replies