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Re: How do we calculate deprecation if we have used the cents per km method

Initiate

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Replies 4

So if as an employee you have claimed 3 years of cents per kilometer for travel and you sell the MV do you have to declare the disposal? If so what is the book value as how do you calculate what the depreciation component of the Cents per kilometer is depreciation. 
likewise what if an employee then becomes a sole trader - what if she claims Cents per km and then sells the mv.  Must it be declared and how do we calculate the depreciation component and thus the book value (thus the gain or profit ) 

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Taxicorn Registered Tax Practitioner

Replies 3

So if as an employee you have claimed 3 years of cents per kilometer for travel and you sell the MV do you have to declare the disposal?

 

No  see  https://www.ato.gov.au/law/view/document?locid=%27TXR/TR20006/NAT/ATO%27&PiT=20000329000001

 


likewise what if an employee then becomes a sole trader - what if she claims Cents per km and then sells the mv.  Must it be declared and how do we calculate the depreciation component and thus the book value (thus the gain or profit ) 

 

See ruling above.

 

 

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Most helpful response

Taxicorn Registered Tax Practitioner

Replies 3

So if as an employee you have claimed 3 years of cents per kilometer for travel and you sell the MV do you have to declare the disposal?

 

No  see  https://www.ato.gov.au/law/view/document?locid=%27TXR/TR20006/NAT/ATO%27&PiT=20000329000001

 


likewise what if an employee then becomes a sole trader - what if she claims Cents per km and then sells the mv.  Must it be declared and how do we calculate the depreciation component and thus the book value (thus the gain or profit ) 

 

See ruling above.

 

 

Initiate

Replies 2

Thank you for your response.  Just one confusion though. It references that there is no balancing adjustment required if they have only used cents per km method, (i understand and agree) but it doesn't confirm that we have to declare the disposal or not.  (even without balancing adjustment)

 I ask this, because when she bought the car she was not registered for GST, but now she is. so if she does have to still declare the sale (she is a sole trader) then she is behind on the GST aspect.   

The answer to whether or not it must be declared as a disposal (becuase of the GST aspect) will affect my decision as to how to treat the MV in the 2021 year. 

Thank you in advance

Taxicorn Registered Tax Practitioner

Replies 1

Thank you for your response.  Just one confusion though. It references that there is no balancing adjustment required if they have only used cents per km method, (i understand and agree) but it doesn't confirm that we have to declare the disposal or not.  (even without balancing adjustment)

 I ask this, because when she bought the car she was not registered for GST, but now she is. so if she does have to still declare the sale (she is a sole trader) then she is behind on the GST aspect.   

The answer to whether or not it must be declared as a disposal (becuase of the GST aspect) will affect my decision as to how to treat the MV in the 2021 year. 

 

Still a disposal for GST  -  but see the link in my answer to your GST post.

 

Initiate

Replies 0

Thank you, yes i did get that.

I was just worrying that the "no need for balancing adjustment" on cpk method was impacting on declaring disposal (with GST)

thanks for your help