Part E
Timing and quantifying rules
Depreciation
EE 39Items no longer used
This section applies when a person in an income year has an item of depreciable property that—
- is no longer used or, because the geothermal energy proving period has ended, becomes unavailable for use under section EE 6(4); and
- is not a building, unless the item meets the requirements of subsection (2); and
- has not been depreciated using the pool method.
This section applies to a building that meets the requirements of subsection (1)(a) and (c) if—
- the building has been irreparably damaged and rendered useless for the purpose of deriving income; and
- the damage occurs—
- in the 2005–06 income year or a later income year:
- as a result of the extreme climatic conditions that occurred during the month of February 2004 in New Zealand:
- as a result of the storm event that occurred during the month of July 2004 in the Bay of Plenty area; and
- in the 2005–06 income year or a later income year:
- the damage is caused other than as a result of the action or failure to act of the person, an agent of the person, or an associated person.
The person has an amount of depreciation loss under this section and under no other provision of this subpart.
The person has an amount of depreciation loss if—
- they no longer use the item in deriving assessable income or carrying on a business for the purpose of deriving assessable income; and
- neither they nor a person associated with them intends to use the item in deriving assessable income or carrying on a business for the purpose of deriving assessable income; and
- the costs of disposing of the item would be more than any consideration they could derive from disposing of it.
The amount of depreciation loss is the item’s adjusted tax value at the start of the income year.
The item’s adjusted tax value at the end of the income year is zero.
Compare
- 2004 No 35 s EE 32
Notes
- Section EE 39 list of defined terms building: inserted (with effect on 30 July 2009), on , by section 84 of the Taxation (Budget Measures) Act 2010 (2010 No 27).