An employee purchased a car for $20000 and claimed depreciation of $2000 in year 1 according to the logbook method.The business percentage in year 1 was 70%.
The vehicle was destroyed in an accident in the month of April in year 2 and the amount of recovery was nil .In year 2 the logbook business percentage was 80%.The depreciation amount claimed in year 2 was $1600.
The adjustable value as of April in year 2 is=20000-2000-1600=$16400.
A deduction of $16400 needs to be applied before factoring in the business percentage.I need clarification on whether I can use average of year 1 and 2 percentage or not.
1)Do I need to average the business percentage across 2 years?
OR
2)Do I need to use year 2 business percentage of 80%?
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167 views2 replies
2 replies
167 views
2 replies