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Edited version of private ruling
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Ruling
Subject: Non-commercial losses - other assets test
Question
Is the closing pool balance for depreciable assets pooled under Division 328 of the Income Tax Assessment Act 1997 (ITAA 1997) included in the $100,000 other assets non-commercial loss test?
Answer
Yes.
This ruling applies for the following period
For year ended 30 June 2009
The scheme commenced on
1 July 2008
Relevant facts
You are a primary producer, and have Division 40 of the ITAA 1997 horticultural write-off assets and pooled assets under Division 328 of the ITAA 1997, each individually with written down values under $100,000. the combined value of the two pools exceeds $100,000.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 35-45(2)
Income Tax Assessment Act 1997 Division 40
Income Tax Assessment Act 1997 Section 328-175
Reasons for decision
Assets counted for the other assets test are assets whose decline in value 'can' be deducted under Division 40 of the ITAA 1997. In effect this means 'depreciating assets'. It does not say they have to be deducted under Division 40, as long as they 'can' be deducted under Division 40.
Small business entities can choose to calculate their deductions under Subdivision 328-D instead of under Division 40 for all depreciating assets that they hold [subsection 328-175(1) of the ITAA 1997], but they 'can' deduct the decline in value under Division 40.
This is supported by the information fact sheet: Non-commercial losses: the other assets test - where it describes assets to be included as 'depreciable assets'
The closing pool balance for depreciable assets pooled under Division 328 of the ITAA 1997 can be included in the $100,000 other assets non-commercial loss test.