Plain language law

New Zealand law explained for everyone

EE 10: Calculation rule: item temporarily not available
or “How to treat items temporarily unavailable due to repairs or inspection”

You could also call this:

“How to calculate depreciation in the year you dispose of an item”

You don’t lose money on depreciation for things you own in the year you get rid of them. But there are some exceptions to this rule.

If you get rid of a building or something related to oil and gas work, you can still lose money on depreciation in that year.

There are special ways to figure out how much depreciation you lose in certain situations:

When you get rid of some types of things, you use the method in section EE 22(4)(a).
For some disposals or events, you use the method in section EE 48(2).
For other disposals or events, you use the method in section EE 50(6).
And for some other disposals or events, you use the method in section EE 50(9).

These rules help you know how much depreciation to count when you get rid of things you own.

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Next up: EE 12: Depreciation methods

or “How to calculate the decrease in value of your property over time”

A person does not have an amount of depreciation loss for an item of depreciable property for the income year in which they dispose of it.
A person has an amount of depreciation loss for an item of depreciable property for the income year in which they dispose of it, if it is—
a building; or
an item of petroleum-related depreciable property.

A person has the amount of depreciation loss calculated under section EE 22(4)(a) for an income year for a disposal to which the subsection applies.
A person has the amount of depreciation loss calculated under section EE 48(2) for a disposal or event to which the subsection applies.
A person has the amount of depreciation loss calculated under section EE 50(6) for a disposal or event to which the subsection applies.
A person has the amount of depreciation loss calculated under section EE 50(9) for a disposal or event to which the subsection applies.

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Notes

Section EE 11 list of defined terms building: inserted (with effect on 30 July 2009), on 28 May 2010, by section 84 of the Taxation (Budget Measures) Act 2010 (2010 No 27).