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  • Selling a depreciating asset with other property



    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    If you received an amount for the sale of several items that include a depreciating asset, you need to apportion the amount received between the termination value of the depreciating asset and the other items. The termination value is only that part of what you received that is reasonably attributable to the asset.

    The Tax Office generally accepts independent valuations as a basis for this apportionment. However, if there is no independent valuation, you may need to demonstrate that your apportionment of the amount is reasonable. Apportionment on the basis of the market values of the various items for which the amount is received will generally be reasonable.

    Example: Depreciating asset sold with other property - ignoring any GST impact

    Ben receives $100,000 for the sale of both a chainsaw (a depreciating asset) and a block of land (not a depreciating asset). It would be reasonable to apportion the $100,000 between:

    • the termination value of the chainsaw, and
    • the proceeds of sale for the land

    based on the relative market values of the chainsaw and the land.

    Last modified: 08 Apr 2020QC 27597