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Calculating a capital gain or capital loss for a depreciating asset in a low-value pool

Last updated 5 October 2009

There are separate rules for depreciating assets that have been allocated to a low-value pool.

You make a capital gain if the depreciating asset's termination value is more than its cost. The amount of the capital gain is calculated as:

(Termination value − cost) × (1 − taxable use fraction)

Taxable use fraction is the percentage of use of an asset that will be for a taxable purpose, expressed as a fraction, that you estimated for the asset when you allocated it to the pool.

You make a capital loss if the depreciating asset's cost is more than its termination value. The amount of the capital loss is calculated as:

(Cost − termination value) × (1 − taxable use fraction)