How to treat the Sale of a Vehicle?

This thread is archived and the information may not be up-to-date. You can't reply to this thread.

(Enthusiast)Enthusiast

1 Nov 2023

Case:

One of our client purchased a vehicle amounting $110K in FY 2022. We claimed the asset immediate w/of on ATO luxury car limit of $67K and claimed GST accordingly. Now in FY 2023, the client has sold that vehicle for $90K.

Question:

1.Which amount should be treated as sale, whether we should proportionate sale like we did while claiming immediate depreciation?

2.What will be the GST portion on sale?, whether we should claim GST on proportionate sale?

0 likes

2,056 views

2 replies

2,056 views

2 replies

Most helpful response

Most helpful reply

CaroATO

(Community Support)Community Support

2 Nov 2023

Hi @JASAVS,

You'll need to look at doing what's called a balancing adjustment. This is where you compare the cost of the asset less depreciation deductions and the sale proceeds or adjustable and the asset's termination values.

Look at it as two dependant transactions. GST was claimed at purchase and now the vehicle has sold, you'll look at including the GST on the sale at label G1 on the BAS.