I have a query regarding the disposal of a motor vehicle (small business assets pool). Self testing ex. 3 includes the disposal of a car for $32,400 (70% business usage and original cost $50,000) and a computer sold for $1,500. The text does not include any detail regarding the treatment for the disposal of a motor vehicle and using the cost base rather than the sale proceeds to determine the reduction in the asset pool. In this question, the total sale proceeds for both the computer and the cost base for the car (x % usage for business) is subtracted from the opening balance + additions of the pool.
My question is, why is the cost base of the car used as the disposal value instead of the sale proceeds? All examples I found on the ATO website treats the disposal of a motor vehicle the same as the disposal of any other asset within an asset pool, that is, the sale proceeds. The text is silent on the matter.
Thanks for the query.
We have made an addendum on FNSACC502 regarding of Car Disposal on page 218 – Solution Self Testing Exercises 3 (13th & 14th Edition)
Less Disposals – Car $32400 x 70% = $226800
thanks for the query.
Those figures are Luxury Car tax Thresholds for maximum amount of luxury car depreciation between 2009 to 2012. Please find below ATO weblink:
Note and suggestion:
Tax law has changed since 2016-2017. I will suggest you to study current version of tax law (15th edition), rather than outdated.
You must be logged in to reply to this topic.