Example of Depreciation Calculation

Capital gain on depreciating asset

Larry purchased a truck in August 2006 for $10,000 and sold it in June 2008 for $8,000.

He used the truck 10% of the time for private purposes.

The decline in value of the truck under the UCA system up to the date of sale was $2,000.

Therefore, the sum of his reductions relating to his private use is $200 (10% of $2,000).

Capital gains tax is calculated as follows:

($10,000 – $8,000)

200
2,000

Capital gain from CGT event = $200 (before applying any discount)

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