PoTL 2018 Ch 14 Answers.docx - Principles of Taxation Law...

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Diminishing value method (s 40-72) : Decline in value: 1 June 2016–30 June 2016: \$6,000 x (30/365) x (200% / 3) = \$329 1 July 2016–30 June 2017: (\$6,000 - \$329) x (366/365) x (200% / 3) = \$3,791 1 July 2017–31 August 2017: (\$6,000 - \$329 - \$3,791) x (62/365) x (200% / 3) = \$213 See [14.70] [14.90] . Adjustable value = \$6,000 - \$4,333 = \$1,667: ITAA97, s 40-85 Termination value = \$3,000 Termination value > Adjustable value; therefore Rogan has an assessable income amount of \$1,333 for the year: ITAA97, s 40-285(1). As Rogan only used the scooter for business purposes 90% of the time, his depreciation deductions would have been reduced by 10%; therefore, his balancing adjustment amount must also be reduced by 10%. Therefore, balancing adjustment amount = \$1333 x 90% = \$1,200: ITAA97, s 40-290.
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