Laptop + Tax Offset Replace Every 2 Years Vs Replace Every 6 Years

Priester-Aus on 01/07/2022 - 16:40

Would it be better to buy a new laptop every 2 years or better to keep laptop for 6 years.

With new laptop used 100% for business my understanding is that it can be claimed as a deduction over 2 years.
When selling it on Gumtree/Facebook after 2 years does it need to be declared on the next tax return ?

If the sale does not need to be declared my thought process is:

If I start with a $1,400 macbook at 32.5% tax rate the "benefit" would be $455 looking at Facebook marketplace its seems plausible to sell it for $900 after 2 years.
-$1,400 + $455 + 900 total cost is $50 so $22.50 per year ?

Keeping the same macbook for 6 years you can probably sell it for $300
-$1,400 + $455 + $300 total cost is $50 so $107.5per year ?

Initial Cost Value of tax [email protected]% Value when sold Total cost years kept Cost per year
-$1,400 + $455 + $900 + $455 2 - $22.50
-$1,400 + $455 + $300 + $645 6 - $107.50

I always kept machines until they are barley alive and then some but looking at it it might be better to replace regularly ?

Financial Computer Laptop Taxation

Comments

  • CrowReally on 01/07/2022 - 17:10
    +2

    If your business sells a laptop you are claiming 100% deductions/depreciation on, yes, 100% of the proceeds would be assessable income to the business.

    A separate issue is whether the ATO would catch you (e.g. cash sale on Gumtree) but that's the "jaywalking is illegal but it's convenient for me to do it" aspect.

    • pollopollo on 01/07/2022 - 22:56
      -2

      Unless you're in the business of buying and selling laptops, the laptop sale proceeds is capital, not income, so doesn't need to be declared.

      • CrowReally on 02/07/2022 - 10:50
        +3

        no.

        If a business that sells icecream as its business model buys itself an office printer and claims a deduction for it, later on when it sells the printer it's income to the business.
        Because it's a business asset. Deductible when you purchase, assessable when you sell.

        If you want to call it capital, that's fine, but why would you get a tax deduction for adding capital to the business in the first place?

  • SmiTTy on 01/07/2022 - 19:13

    Your calculations seem solid.

    It'll be easier to see which comes out on top of you extend option 1 scenario with buying another laptop for 2 years, then again… In order to work out what happens after 6 years worth of tax deductions and resale. Because after you sell, assumingly you'll need to buy a new one!

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