INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances  

Subdivision 40-D - Balancing adjustments  

Operative provisions

SECTION 40-290   Reduction for non-taxable use  

40-290(1)  
You must reduce the amount (the balancing adjustment amount ) included in your assessable income, or the amount you can deduct, under section 40-285 for a * depreciating asset if your deductions for the asset have been reduced under section 40-25 .

40-290(2)  
The reduction is:


Sum of reductions
Total decline
× Balancing adjustment amount

where:

sum of reductions
is the sum of:


(a) the reductions in your deductions for the asset under section 40-25 ; and


(b) if there has been roll-over relief for the asset under section 40-340 - the reductions in deductions for the asset for the transferor or an earlier successive transferor under section 40-25 ; and


(c) if you * hold the asset as the * legal personal representative of an individual - the reductions in deductions for the asset for the individual under section 40-25 .

total decline
is the sum of:


(a) the decline in value of the * depreciating asset since you started to * hold it; and


(b) if there has been roll-over relief for the asset under section 40-340 - the decline in value of the asset for the transferor or an earlier successive transferor; and


(c) if you * hold the asset as the * legal personal representative of an individual - the decline in value of the asset for the individual.

40-290(3)  
You must further reduce the amount included in your assessable income, or the amount you can deduct, under section 40-285 for a * depreciating asset (the current asset ) if:


(a) the asset ' s * cost (for you) was worked out under section 40-205 (Cost of a split depreciating asset) or 40-210 (Cost of merged depreciating assets); and


(b) you used the depreciating asset from which the current asset was split, or a depreciating asset that was merged into the current asset, or had it * installed ready for use, for a purpose other than a * taxable purpose.

40-290(4)  
The further reduction is such amount as is reasonable having regard to the extent of the use referred to in paragraph (3)(b). Exception: mining, quarrying or prospecting information

40-290(5)  


This section does not apply to *mining, quarrying or prospecting information.

View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.