Section EE 1 — Income Tax Act 2007: What this subpart does

EE 1 What this subpart does Quantifying amounts of depreciation loss and depreciation recovery income (1) This subpart— (a) quantifies the amount of depreciation loss for which a person is allowed a deduction if the provisions of Part D (Deductions) are met; and (b) quantifies the amount of depreciation recovery income that is income under Part C (Income). When amount of depreciation loss arises (2) A person has an amount of depreciation loss for an item for an income year if— (a) the person owns an item of property, as described in sections EE 2 to EE 5 ; and (b) the item is depreciable property, as described in sections EE 6 to EE 8 ; and (c) the item is used, or is available for use, by the person in the income year; and (d) the amount of depreciation loss is calculated for the person, the item, and the income year under sections EE 9 to EE 11 . When amount of depreciation recovery income arises (3) A person has an amount of depreciation recovery income for an item for an income year if— (a) the person owns an item of property, as described in sections EE 2 to EE 5 ; and (b) the item is depreciable property, as described in sections EE 6 to EE 8 ; and (c) the item is disposed of or an event of a kind described in section EE 47 occurs; and (d) the amount of depreciation recovery income is calculated for the person, the item, and the income year under any of sections EE 22(5) , EE 38(5) , EE 48(1) , EE 49(2) , EE 51(3) , EE 52(3) , and EZ 23B(8) (Property acquired after depreciable property affected by Canterbury earthquakes). Amounts of loss incurred and income derived (4) To avoid doubt,— (a) an amount of depreciation loss is treated as being incurred in the income year for which it is calculated; and (b) an amount of depreciation recovery income is treated as being derived in the income year for which it is calculated. Allocation of deduction for depreciation loss (5) A person who in an income year uses an item for research or development or for market development that gives rise to a deduction allocated under section EJ 22 (Deductions for market development: product of research, development), and as a result has an amount of depreciation loss for the item for the income year, may choose to allocate all or part of the deduction for the depreciation loss— (a) to an income year after the income year for which the person has the depreciation loss; and (b) in the way required by section EJ 23 (Allocation of deductions for research, development, and resulting market development). Partial income-producing use (6) Subpart DE (Motor vehicle expenditure) and section EE 50 contain rules for calculating the amount of deduction available for depreciation loss in circumstances in which an item of property is only partly used or available for use in a way that satisfies the general permission. Defined in this Act: amount , deduction , depreciable property , depreciation loss , depreciation recovery income , development , dispose , general permission , income , income year , own , property , research , Compare: 2004 No 35 s EE 1 Section EE 1(3)(c): amended, on 2 November 2012, by section 34 of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88). Section EE 1(3)(d): amended (with effect on 4 September 2010), on 29 August 2011, by section 23 of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).