Tax Time Question-Balancing Adjustment Offset Amount

Hi
Doing my tax at the moment and have a laptop i purchased for $800 in Sept 2020 and no longer use it- last used was July 2021 (just in the basement i.e not sold)

I plan to use the prime cost method (say i use it 100% work)
Not sure how to do the :
Balancing adjustment offset amount enter dollars and cents

1)I assume the termiinal value is $0 because I haven't sold it. but do i calculate the balancing adjustment offset amount?

2)Also i used the 2 years life as the effective life so i assume for "
Have you self-assessed the effective life for this asset?" I'll just say no?

3)Also my sister has an Investment property and used one of those BMT schedule for depreciation value- where exactly is it inserted into the mygov ATO- under rental just as other expenses?

Thanks first time we're trying to do it ourselves ah

Comments

  • +2 votes

    I can't help with the tax questions, but just wanted to ask - do you actually have a basement?

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      Dungeon?
      .

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    These pages may be helpful.

    For Q1 and Q2
    https://www.ato.gov.au/Business/Depreciation-and-capital-exp...

    For Q3: it's under "Deductions for decline in value* and "Capital works deductions" in the rental schedule.
    Depending on the date your sister bought the rental property (unless it's brand new), she may only be entitled to the building depreciation (aka capital works), and depreciation on any equipment that she installed herself.
    https://www.ato.gov.au/uploadedFiles/Content/IND/Downloads/R...
    https://www.bmtqs.com.au/bmt-insider/how-recent-changes-to-d...

  • +2 votes

    1) Balancing adjustment is only applicable upon sale of the laptop so you can disregard that.

    2) Prime cost is reserved mainly for property improvements, I would use diminishing & an effective life of 3 years as that is the generally accepted laptop effective life. Then you say no to self assessed, if you use 2 then say yes.

    3) Her Div 40 from BMT should be depreciation in the rental expenses, Div 43 capital works. It should be in a rental schedule along with all other rental expenses & the rental income.

    The fee for having the BMT schedule prepared (if this was the year it was prepared) is a sundry rental deduction

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      Thanks. So helpful ^_^

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      i checked through the ato the way to do this is Depreciation and Capital Allowances Tool. however then she has to input everything rather than the figures the BMT schedule prepared- or is this the same as "Total capital allowances – manually calculated" or "Total capital works – manually calculated"

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    With that the ATO is up to, best to find yourself an accountant!

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    OP if you need more help you can call the ATO they are very helpful. I've never used a tax agent.

  • +1 vote
    1. Seeing as in the 2021 financial year you were still technically using the laptop you cant do a balancing adjustment offset yet. If you choose to do it, it will be in 2021/2022 financial year. Also, if you just cease to use it the value should be the Market Value at the time you stopped using it.

    2. self assessed - no
      Generally the diminishing method is used for these assets as you get a larger sum back at the beginning but if you think prime is better for you go for that (calcs for both below)

    prime cost method (assuming 1 sept) should be;
    800(302/366)50% = $330.05 for year 1
    800* (365/365) *50% = 400.00 for year 2
    800 - 330.05 - 400 = 69.95 for year 3

    Diminishing value method;
    800*(302/366) = $660.11 for year 1
    139.89 * (365/365) = 139.89 for year 2

    1. For the BMT report it goes under the rental property schedule.

    There should be 2 columns "Division 43" and "plant and equipment"
    Plant and equipment goes in
    "Total capital allowances – manually calculated"

    Division 43 goes in
    "Total capital works – manually calculated"