Hi there,
As of this FY year I've started working at a new job that allows me to claim a deduction for business use of my personal car. Currently it looks like the car will be around 70% business use (I'm in the middle of completing the logbook method).
I'd like to claim depreciation for my car. I bought it 4 years ago for $10,000 and until now has never been used for anything other than personal use (i.e. no deductions). If I were to keep things simple and use the prime cost method over say 8 years, I could argue the car has a remaining value of $5,000 and I would be able to consider the car to depreciate by $1,250 each year for the next four (which I know would then need to be multiplied by my business use percentage).
The catch is looking up comparable models, it seems my car is worth around $12,000 now on the market. I think its a combination of second hand car prices being up post covid and me getting a good deal at the time. Could I define the value of my car to be $12,000 as of today, based on market prices, and begin depreciating it from there?
I'm assuming the cost basis needs to be what I paid for the car ($10,000, 4 years ago), but given the vehicle is swapping from personal to partial business use, I'm not sure if a 'recosting' exercise is appropriate. I'm not a sole trader so theres no ABNs involved and theres no actual transfer of car ownership to any business.
Cheers,
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