# Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS

Division 28 - Car expenses

Subdivision 28-F - The " log book " method

SECTION 28-90   How to calculate your deduction

28-90(1)
To use the " log book " method, you multiply the amount of each * car expense by the * business use percentage.

The expense

28-90(2)
The expense must qualify as a deduction under some provision of this Act outside this Division (or would qualify if, while you * held the * car, you had used it only in producing your assessable income). If only part of the expense would qualify, you multiply that part by the * business use percentage.

Example:

You borrow money to buy a car. You make repayments of principal and payments of interest.

You cannot deduct the repayments of principal because they are capital expenses.

The interest payments would be deductible in full if, throughout the income year, you had used the car only in producing your assessable income.

Using the " log book " method:

• • if you held the car for the whole income year - multiply the interest payments by the business use percentage;
• • if you held the car for only 6 months of the income year - multiply the interest payments for those 6 months by the business use percentage.
• To find out whether an expense qualifies as a deduction under this Act, see Division 8 (Deductions).

The percentage

28-90(3)
The business use percentage is calculated by dividing:

• • the number of * business kilometres that the * car travelled in the period when you * held it during the income year;
• by

• • the total number of kilometres that the car travelled in that period;
• and expressing the result as a percentage.

28-90(4)

Business kilometres are kilometres the * car travelled in the course of:

(a) producing your assessable income; or

(b) your * travel between workplaces.

28-90(5)
You calculate the number of business kilometres by making a reasonable estimate. The estimate must take into account all relevant matters, including:

(a) any log books, odometer records or other records you have; and

(b) any variations in the pattern of use of the * car; and

(c) any changes in the number of cars you used in the course of producing your assessable income.

28-90(6)

You hold a * car while you own it, or it is leased to you, for use in the course of producing your assessable income, even if it is also used for some other purpose.
##### Note 1:

In certain circumstances the lessee of a luxury car is taken to be its owner (see subsection 242-15(2) ).

##### Note 2:

In certain circumstances the notional buyer of property is taken to be its owner (see subsection 240-20(2) ).