Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 2/6)
Character Range: 847583–850387

to certain depreciating assets
40‑55 Use of the "cents per kilometre" car expense deduction method
40‑60 When a depreciating asset starts to decline in value
40‑65 Choice of methods to work out the decline in value
40‑70 Diminishing value method
40‑72 Diminishing value method for post‑9 May 2006 assets
40‑75 Prime cost method
40‑80 When you can deduct the asset's cost
40‑82 Assets costing less than $30,000—medium sized businesses—income years ending between 2 April 2019 and 30 June 2020
40‑85 Meaning of adjustable value and opening adjustable value of a depreciating asset
40‑90 Debt forgiveness
40‑95 Choice of determining effective life
40‑100 Commissioner's determination of effective life
40‑102 Capped life of certain depreciating assets
40‑103 Effective life and remaining effective life of certain vessels
40‑105 Self‑assessing effective life
40‑110 Recalculating effective life
40‑115 Splitting a depreciating asset
40‑120 Replacement spectrum licences
40‑122 Partial conversions of mining, quarrying or prospecting rights
40‑125 Merging depreciating assets
40‑130 Choices
40‑135 Certain anti‑avoidance provisions
40‑140 Getting tax information from associates

Operative provisions

40‑25  Deducting amounts for depreciating assets

You deduct the decline in value
 (1) You can deduct an amount equal to the decline in value for an income year (as worked out under this Division) of a *depreciating asset that you *held for any time during the year.
Note 1: Sections 40‑70, 40‑72 and 40‑75 show you how to work out the decline for most depreciating assets. There is a limit on the decline: see subsections 40‑70(3), 40‑72(3) and 40‑75(7).
Note 2: Small business entities can choose to both deduct and work out the amount they can deduct under Division 328.
Note 3: Generally, only one taxpayer can deduct amounts for a depreciating asset. However, if you and another taxpayer jointly hold the asset, each of you deduct amounts for it: see section 40‑35.

Reduction of deduction
 (2) You must reduce your deduction by the part of the asset's decline in value that is attributable to your use of the asset, or your having it *installed ready for use, for a purpose other than a *taxable purpose.
Example: Ben holds a depreciating asset that he uses for private purposes for 30% of his total use in the income year.
 If the asset declines by $1,000 for the year, Ben would have to reduce his deduction by $300 (30% of $1,000).
Note: You may have to make a further reduction under subsections (3) and (4) or section 40‑27.

Further reduction: leisure facilities
 (3) You may have to make a further reduction for a *depreciating asset that is a *leisure facility attributable to your use of it, or your having it *installed ready for use, for a *taxable purpose.
 (4) That reduction is the part