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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    View history reference

Subdivision 40-D - Balancing adjustments    View history reference

Operative provisions

SECTION 40-290  Reduction for non-taxable use  

 View history reference ITAA 36

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)  

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


 



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