INCOME TAX ASSESSMENT ACT 1997 - SECT 328.210 Low pool value

INCOME TAX ASSESSMENT ACT 1997 - SECT 328.210

  (1)   Your deduction for a * general small business pool for an income year is the amount worked out under subsection   (2) (instead of an amount calculated under section   328 - 190) if that amount is less than $1,000 but more than zero.

Note 1:   See section   328 - 215 for the result when the amount is less than zero.

Note 2:   This threshold may be affected by section   328 - 180 (about temporary increased access to accelerated depreciation) or 328 - 181 (about temporary full expensing) of the Income Tax (Transitional Provisions) Act 1997 .

  (2)   The amount is the sum of:

  (a)   the pool's * opening pool balance for the income year; and

  (b)   the * taxable purpose proportion of the * adjustable value of each * depreciating asset you started to use, or have * installed ready for use, for a * taxable purpose during the income year and that is allocated to the pool; and

  (c)   the taxable purpose proportion of any cost addition amounts (see subsection   328 - 190(3)) for the income year for assets allocated to the pool;

less the sum of the taxable purpose proportion of the * termination values of depreciating assets allocated to the pool and for which a * balancing adjustment event occurred during the income year.

  (3)   In that case, the * closing pool balance of the pool for that income year then becomes zero.

Example:   Amanda's Graphics is a small business entity for the 2014 - 15 income year and chooses to use this Subdivision for that year. The business has an opening pool balance of $8,500 for its general small business pool for that year.

  During that year, Amanda acquired a new computer for $2,000. The taxable purpose proportion of its adjustable value is:

  $2,000 x 80% business use estimate = $1,600

  Amanda also sold her business car for $9,600 during that year. The car was used 100% in the business.

  To work out whether she can deduct an amount under this section, Amanda uses this calculation:

  $8,500 + $1,600 - $9,600 = $500

  Because the result is less than $1,000, Amanda can deduct the $500 for the income year. The pool's closing balance for the year is zero.