Part D
Deductions
Specific rules for expenditure types
DB 28Amount from land affected by change and not already in income
This section applies when a person derives income under section CB 14 (Disposal: amount from land affected by change and not already in income) that is not their income under any other provision of this Act.
The person is allowed—
- a deduction allowed under any other provision of this Act; and
- a deduction to the extent described in subsection (3).
The maximum amount of the deduction is the greater of $1,000 and an amount calculated using the formula in subsection (4). However, the amount must not be more than the profit obtained from the disposal of the land.
The formula is—
Where:
In the formula,—
- percentage of profit is 10% of the profit on the disposal of the land:
- years is the number, up to and including 10, of consecutive years between the date on which the person acquired the land and the date on which they disposed of it, with the first year starting on the date on which the person acquired the land.
In this section, profit means the excess of the amount derived over the cost of the land.
This section supplements the general permission. The general limitations still apply.
Compare
- 2004 No 35 s DB 21