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EZ 14: Pre-1993 depreciation rate
or “Choosing and using old depreciation rates for items acquired before 1995”
You could also call this:

“Depreciation rate for certain old property in the 1992-93 tax year”

The law talks about how much you can reduce the value of certain old property for tax purposes in the 1992-93 tax year. This reduction is called depreciation.

You use a rate called the section 108 rate. This rate is what the Commissioner of Inland Revenue said you could use if your tax year ended on 31 March. You don’t add any extra rates to this.

The section 108 rate comes from an old law called the Income Tax Act 1976. It’s the rate the Commissioner allowed for property like yours in the 1992-93 tax year.

There are two other rates mentioned in the law, but you don’t use them. These are the section 108A rate and the other sections rate. They were extra reductions allowed in the old law.

If you’re allowed extra depreciation under other parts of the law, the Commissioner might let you adjust the rate. If you do this, you can’t claim the extra depreciation separately.

You have some choices when using this rate. If it’s a diminishing value rate (which reduces the property’s value faster at first), you can change it to a straight-line rate (which reduces the value by the same amount each year). To do this, you round the rate to the nearest one in a special list and use the matching straight-line rate.

You can also do the opposite. If you have a straight-line rate, you can change it to a diminishing value rate using the same list.

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Next up: EZ 16: Amount of depreciation loss for plant or machinery additional to section EZ 15 amount

or “Extra wear and tear claim for heavily used business machinery”
Next

Part E Timing and quantifying rules
Terminating provisions

EZ 15Annual rate for excluded depreciable property: 1992–93 tax year

  1. This section is about the annual rate that applies to an item of excluded depreciable property.

  2. The rate is the section 108 rate, without adding the section 108A rate or the other sections rate. The rates referred to in this subsection are described in subsections (3) to (5).

  3. Section 108 rate means the rate of depreciation that the Commissioner allowed persons with a standard balance date to use for the 1992–93 tax year to calculate a deduction for depreciation under section 108 of the Income Tax Act 1976, as in force for the 1992–93 tax year, for property of the same kind as the item.

  4. Section 108A rate means the rate of additional deduction under section 108A of the Income Tax Act 1976, as in force for the 1992–93 tax year, for which the item was eligible for the 1992–93 tax year.

  5. Other sections rate means a rate of additional or supplementary deduction under section 113A or any other provision of the Income Tax Act 1976 for which the item was eligible for the 1992–93 tax year.

  6. If a person has an additional amount of depreciation loss for an income year for an item of excluded depreciable property under section EZ 16 or EZ 17 or any other provision of this Act,—

  7. the rate applicable to the item under subsection (2) may be adjusted to incorporate the additional amount of depreciation loss in a manner prescribed or allowed by the Commissioner; and
    1. when an adjusted rate is applied to the item, the person does not have a separate amount of depreciation loss for the item under section EZ 16 or EZ 17 or the other provision.

      1. A person applying the rate in subsection (2) has the following choices:

      2. if the rate is a diminishing value rate, the person may instead use the straight-line rate by—
        1. rounding the diminishing value rate to the nearest rate specified in schedule 10, column 1 (Straight-line equivalents of diminishing value rates of depreciation); and
          1. taking the equivalent straight-line rate specified in column 2 of the schedule; or
          2. if the rate is a straight-line rate, the person may instead use the diminishing value rate by—
            1. rounding the straight-line rate to the nearest rate specified in schedule 10, column 2; and
              1. taking the equivalent diminishing value rate specified in column 1 of the schedule.

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