A sheep farm purchased for $2.6 million
From the tax depreciation schedule, they find out they can claim a huge $311,500 in depreciation deductions in the first full financial year alone and a massive $1,066,000 in the first five cumulative years
Some of the biggest depreciation deductions he can claim in the first full financial year belong to the following assets:
- $176,000 for sheds
- $44,200 for dams
- $28,000 for silos
- $23,200 for yards and loading ramps
- $17,400 for fences
- $10,300 for water tanks
This is just a selection of assets found within the property, so is not an exhaustive list.
The table below shows the difference depreciation can make to Doug and Kathleen’s scenario.
|Depreciation claimable||Tax savings (30%)|
|First financial year||$311,500||$93,450|
|First 5 cumulative years||$1,066,000||$319,800|
Simply by claiming depreciation, Doug and Kathleen improved their after-tax cashposition by $410,100.
Case studies and figures are based upon tax depreciation schedules completed by BMT Tax Depreciation and do not represent any particular person or investment property scenario. The information provided is a general guide and does not constitute financial, legal or taxation advice. All figures are supplied as examples and may not represent your personal circumstances.
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The tax depreciation deductions in this case study have been calculated based on the diminishing value method of depreciation and are based upon a first full year of ownership.
turnover less than $50 million, depreciation deductions are likely to be even higher.