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Income Tax Act 2007

Timing and quantifying rules - Depreciation - Adjusted tax value

EE 58: Base value in section EE 56 when no previous deduction

You could also call this:

“Calculating value of previously unclaimed items for tax purposes”

This law talks about how to figure out the base value of certain items for tax purposes. It applies to things that aren’t buildings or related to oil and gas. These items haven’t been used to make money before, and you couldn’t claim any tax deductions for them in the past.

The base value is the item’s market price when you start using it to make money. However, if the item is an aircraft engine or an aircraft, you need to reduce this value by a certain amount mentioned in section EZ 23BA(2).

This rule is for items you got after the 1992-93 tax year, or for special items described in section EZ 22(3).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514710.

Topics:
Money and consumer rights > Taxes
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EE 57: Base value in section EE 56 when none of sections EE 58, EE 59, and EZ 22(1) applies, or

“How to calculate an item's base value when standard rules don't apply”

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EE 59: Base value in section EE 56 when property is petroleum-related depreciable property, or

“Calculating the starting value of petroleum-related assets for tax depreciation”

Part E Timing and quantifying rules
Depreciation: Adjusted tax value

EE 58Base value in section EE 56 when no previous deduction

  1. This section applies when all the following apply to the item:

  2. it is not a building; and
    1. it is not an item of petroleum-related depreciable property; and
      1. it is not an item that the person—
        1. acquired to use or have available for use in deriving assessable income or carrying on a business for the purpose of deriving assessable income; and
          1. first used for the purpose of deriving assessable income or carrying on a business for the purpose of deriving assessable income; and
          2. it has been, since the person acquired it and first used it or had it available for use for any purpose, an item for which the person could not in any income year have been allowed a deduction for an amount of depreciation loss, whether because of the nature of the person’s use of the item or the person’s non-residence or for any other reason; and
            1. in relation to the 1992–93 income year,—
              1. it was acquired by the person after the end of that income year; or
                1. it was an item described in section EZ 22(3) (Base value and total deductions in section EE 56: before 1 April 1995).

                2. Base value is the item’s market value when the person starts to use it, or to have it available for use, for the purpose of deriving assessable income or carrying on a business for the purpose of deriving assessable income, reduced for an item that is an aircraft engine or aircraft by an amount referred to in section EZ 23BA(2) (Aircraft acquired before 2017–18 income year: adjusted tax value, base value, reduced; total deductions increased) for the item.

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                Notes
                • Section EE 58(2): amended, on , by section 66(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                • Section EE 58 list of defined terms aircraft engine: inserted, on , by section 66(2) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                • Section EE 58 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).