Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) An amount is included in your assessable income or you can deduct an amount under this section instead of section 40- 285 if:
(a) a * balancing adjustment event occurs for a * car you * held; and
(b) you have deducted or can deduct an amount for the decline in value of the car for an income year under this Division; and
(c) you chose:
(i) the "cents per kilometre" method in Subdivision 28-C; or
(ii) the "12% of original value" method in Subdivision 28-D;
for deducting your car expenses for the car for one or more other income years.
Note 1: This means if you have only used the "log book" method or the "one-third of actual expenses" method since you began using the car, you calculate the assessable amount or deductible amount under section 40- 285.
Note 2: Also, if you have only used the "cents per kilometre" method or the "12% of original value" method since you began using the car, no amount is assessable or deductible under this section or section 40- 285.
(2) Work out the amount you include in your assessable income or the amount you can deduct in this way:
Method statement
Step 1. Subtract the * car's * adjustable value just before the * balancing adjustment event occurred from the car's * termination value.
Step 2. Reduce the step 1 amount by the part of the * car's decline in value that is attributable to your using the car, or having it * installed ready for use, for purposes other than * taxable purposes. You do this by applying the formula in subsection 40-290(2).
Step 3. Multiply the step 2 amount by the total number of days for which you deducted the decline in value of the * car under this Division.
Step 4. Divide the step 3 amount by the total number of days you * held the * car.
Step 5. The step 4 amount is a deduction if it is negative or it is included in your assessable income if it is positive.
(3) In working out the * adjustable value for the income years for which you chose the "cents per kilometre method" or the "12% of original value" method, you are to assume the decline in value was calculated under this Division on the same basis as those income years when those methods did not apply.
(4) In working out the reduction in step 2 for the income years for which you chose the "cents per kilometre method" or the "12% of original value" method, you must assume that:
(a) you had not chosen either of those methods for the * car; and
(b) Division 28 (car expenses) had not applied to the car; and
(c) you used the car for * taxable purposes:
(i) to the extent of 20% if you used the "cents per kilometre" method; or
(ii) to the extent of one-third if you used the "12% of original value" method.
Guide to Subdivision 40-E