Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2012 (23 of 2012)

Schedule 2   Increase to the small business instant asset write-off threshold

Part 1   Amendments contingent on the Minerals Resource Rent Tax

Income Tax Assessment Act 1997

43   Subsection 328-210(3) (example)

Repeal the example, substitute:

Example: Amanda's Graphics is a small business entity for the 2012-13 income year and chooses to use this Subdivision for that year. The business has an opening pool balance of $7,000 for its general small business pool for that year.

During that year, Amanda acquired a new computer for $8,000. The taxable purpose proportion of its adjustable value is:

$8,000 × 85% business use estimate = $6,800

Amanda also sold her business car for $9,600 during that year. The car was used 100% in the business.

To work out whether she can deduct an amount under this section, Amanda uses this calculation:

$7,000 + $6,800 - $9,600 = $4,200

Because the result is less than $5,000, Amanda can deduct the $4,200 for the income year. The pool's closing balance for the year is zero.