Hi Team,
I’d like to confirm the correct income tax treatment for the sale of a business motor vehicle.
Scenario:
- I am a sole trader and not registered for GST.
- I purchased a used Isuzu FRR Series truck for $30,000.
- The vehicle was used 100% for business purposes.
- The cost of the vehicle was claimed in full under temporary full expensing (not depreciation over time).
- I also claimed running expenses such as insurance, registration, fuel, and repairs.
- I later sold the vehicle for $18,000.
Questions:
- Do I need to report the sale of the vehicle in my tax return?
- If yes, how should it be reported?
My understanding:
- As the vehicle is a depreciating asset used for business and was fully expensed, its adjustable value is nil.
- The sale proceeds of $18,000 represent the termination value.
- This results in a balancing adjustment assessable income of $18,000, which should be included in my tax return.
Please confirm if this treatment is correct or if there are any additional tax implications I should be aware of.
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181 views
1 replies