Home – New Forums Money matters I operate as a sole trader Vehicle Mandatory

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    Back in April 2018, I acquired a business vehicle for $64k and applied depreciation as follows: 15% in the 2018/2019 financial year and then 30% annually thereafter. By the time the 2020/2021 financial year arrived, the vehicle’s value had been completely written down to $0 through depreciation. Subsequently, I sold the vehicle for $50k, resulting in a straightforward $50,000 profit from its sale. (Please note that I did not acquire a new business vehicle during that same tax year.)

    Fast forward to September 2021, I purchased another business vehicle for $79,000. As of April 2022, I could sell it for the same amount, $79k. Furthermore, there is a scarcity of these vehicles for the next six months, and the ones arriving in six months will cost an additional $6k. In other words, this vehicle’s value isn’t depreciating as vehicles have in the past.

    My query is whether I am required to depreciate this vehicle. If the $150,000 instant asset write-off scheme is still in effect, I would depreciate it to $0. However, upon selling it, I would once again generate a substantial profit. This scenario leads to significant peaks and troughs in my financial records.

    Please note that you need not worry about logbooks, business usage, or GST limits as I have taken care of those aspects.

    Thank you.

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