Home – New Forums Money matters How to record vehicle purchase that includes private usage

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  • #995060
    Paragon Window Cleaning
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    Hi all, I would like some help in recording an asset purchase in MYOB.
    Hyundai i30 purchased 1 July 2015, 55% Business use, 45% Private. Cost $12000.
    I am not registered for GST, and I’m a sole trader. The vehicle was purchased with my own personal money, not from the business account.

    This is how I have recorded the transaction:
    1/7/15
    Credit Owners Drawings $12000
    Debit Business Vehicles at cost $12000
    30/6/16
    Credit Business Vehicle Accum Depreciation $6600 (55% Business depreciation write-off)
    Debit Depreciation Expense $6600

    This leaves me with a book value of $5400 for the Vehicle even though it’s technically fully depreciated. Is this correct?

    Also, when I sell the vehicle, how would I record the transaction if I sold it for $6000

    Many thanks

    Jeff

    #1199781
    Taxopia
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    1. Yes in your example the tax WDV would be $5400.
    2. If you later sold for $6000 then the proceeds relevant to the business would be 55% of this being $3300. This would be assessable income in the year of disposal as per Sect 328.215(4) of ITAA 1997.

    Just be aware that the ATO are devoting audit resources to abuse of these new concessions. If there is a contrived arrangement whereby assets are bought and sold within a short period of time for an unjustifiable reason then you will be caught and likely penalised under the administrative penalty regime. There are reporting labels for these claims in the tax returns so they know what is being claimed and then later sold.

    Cheers
    Alex

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