Hi all,
I bought a property in 2003 and sold it in May 2006. During this time I had about 10 depreciable assets in which i claimed annual depreciations deductions for. Now that I have sold the property, how should I treat the depreciable assets?
I obviously get the 50% discount on sale of the property as I''ve held it for more than 1 year, but what about the depreciable assets? Do I add the Written down value at date of sale of the depreciable assets to the cost base, minus the total cost base figure (purchase price add WDV of depreciable assets) from the proceeds and that is my capital gain, then is the 50% discount applied to that figure?
Please help!
Hi,
You want to be selling the depreciable assets at their written down value so that you do not make a profit or loss on them. These assets are not eligible for the capital gains tax discount. the best thing is to include a depreciation schedule in the contract of sale showing the assets at their written down value.
To calculate your capital gain, your cost base will be reduced by the depreciation claimed since the beginning.
i.e. Cost base = purchase price + purchase costs + capital improvements + selling costs – depreciation claimed
Cheers,
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