Private ruling: Decline in value of depreciating assets
Date of advice: 4 April 2023
Published: 29 May 2023
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: XX April 20XX

Ruling: Q1: Are you entitled to claim a deduction for the decline in value of a piano that you use at home for work related purposes? | A1: Yes. Division 40 of the Income Tax Assessment Act 1997 (ITAA 1997) indicates that you may claim a deduction for the decline in value of your piano over the time it is used for the purpose of producing assessable income. You will need to apportion the deduction to exclude any private use of the piano. To determine the appropriate apportionment amounts, the onus is on the taxpayer to maintain accurate and truthful records when completing the apportionment calculations. Further information about 'Decline in value of depreciating assets' can be found by searching 'QC 63126' on our website ato.gov.au .

Relevant facts and circumstances: Your work involves music education at a university. On XXXX you purchased a musical instrument for $XX. The musical instrument is located at your home residence. You are required to maintain your musical instrument skills to stay current in your musicianship discipline, which is required as part of your employment in order to teach students in various music teacher education subjects. You use the musical instrument to practice and study songs that you will play and/or teach in your lectures. You also use the musical instrument to maintain your skills in order to be able to play the musical instrument at university lectures, when required. You do have access to a musical instrument at work, but it is not in a sound-proof space, therefore you are unable to practice without distracting other staff and students. Additionally, when you are at your workplace you spend most of your time on the computer, teaching, or in meetings. Therefore, your musical professional development and preparation for lectures is done at home. Your employer provided a letter confirming that you require a musical instrument for professional development related to your work. The letter also states: due to space constraints and limitations, your employer is unable to provide ideal conditions for every aspect of that development need, and therefore a musical instrument located at your residence is needed and justified. You keep a logbook to calculate the personal and work-related use of the musical instrument which you will use to determine the apportionment for the decline in value deductions of the instrument.

Relevant legislative provisions: Division 40 of the Income Tax Assessment Act 1997