Section EE 12 — Income Tax Act 2007: Depreciation methods

EE 12 Depreciation methods Meaning of depreciation method (1) Depreciation method means— (a) a method that a person may use to calculate an amount of depreciation loss: (b) a rate determined by the Commissioner under section 91AAF or 91AAG of the Tax Administration Act 1994: (c) a maximum pooling value determined by the Commissioner under section 91AAL of that Act. Methods described (2) The depreciation methods are— (a) the diminishing value method, which— (i) may be used for any item of depreciable property except one referred to in subparagraph (ii) or (iii); and (ii) must not be used for an item of fixed life intangible property; and (iii) must not be used for an item of property in the circumstances described in section EZ 9 (Pool method for items accounted for by globo method for 1992–93 income year): (b) the straight-line method, which— (i) may be used for any item of depreciable property; and (ii) must be used for an item of fixed life intangible property: (c) the pool method, which— (i) may be used for any item of poolable property except one referred to in subparagraph (ii); and (ii) must not be used for an item of fixed life intangible property; and (iii) must be used for an item of property in the circumstances described in section EZ 9 . Person chooses (3) A person chooses which of the depreciation methods they will use for each item of depreciable property they own. How person chooses (4) The person chooses the method by using the chosen method for the item in their return of income for the income year for which they make the election. Diminishing value or straight-line method fixed for income year (5) If the person chooses the diminishing value method or the straight-line method, they must use the method for the item and the income year and must not change the election for the income year. Pool method fixed for income year and later income years (6) If the person chooses the pool method, they must use the method for the item and the income year and must not change the election for— (a) the income year; or (b) a later income year in which the item is still poolable property that they own. Defined in this Act: amount , depreciable property , depreciation loss , depreciation method , diminishing value method , fixed life intangible property , income year , own , pool method , poolable property , property , return of income , straight-line method , Compare: 2004 No 35 s EE 12