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Any accountants in the house? want to write a bike off (Tax)

Discussion in 'General Motorcycling Discussion' started by sucram, Mar 27, 2007.

  1. I was speaking with a friend and he mentioned that he (his business) might have to pay tax this year as they cant write enough off on tax. Previous years they didnt have a problem, I think it was because he purchased a dyno and a few other big ticket items.

    I mentioned to him that it would be cool to write a bike off on tax. I was speaking with his old boss a while ago at a BBQ and he used to write off race tyres/pads/consumables and track days as expenses (for testing etc)

    Say writing it off as advertising, research and development, etc etc. His business is automotive but he does the service/repairs/tunes/upgrades on all of our mates bikes. Its not a dedicated "bike shop"

    His accountant is away for the next 2 weeks or so and asking him while on his honey moon is not really classed as an emergency...

    I vaguely recall you can lease a bike/car and only write off the repayments interest, depreciation, insurance, fuel, service and mods (if you have a good mechanic) but he wants to write the whole cost of the bike/car off in one hit as its the majority of whats left owing. Can this be done?

    2nd question, he wouldnt want to buy new as the initial hit on depreciation is too much. Can he purchase an 05/06 model 2nd hand from a private sale and still write it off under tax

    I did a quick search under the ATO website but couldnt find much (just case files).

    Sorry if my comments/assumptions are wrong, I know nothing about tax!
  2. Putting the running and maintainance asside as im pretty sure its the same tax implications wether you lease or buy, from what i understand you can either
    1 lease a vehical and claim the lease costs
    2 buy a vehical and claim depreciation

    also i have no idea what the FBT implications are for a bike.
  3. If the bike is classified as a "Vehicle" for FBT, then the bike would need to be capitalised and depreciated as such. There would then be FBT implications even if it was leased. The only way to avoid any FBT in this situation would be if the running costs of the bike are paid for by the employee who has rights to use the vehicle and those out of pocket running costs are equal to or greater than the value of the lease on the bike.

    Unless the bike is for trading stock, i.e. going to be sold later, I dont see any other way around the item having to be depreciated. Given the excessive value (i.e. a few thousand $$).

    I'm an accountant but not a tax expert.
  4. I'm studying accounting right now.

    Well u can't write off the entire bike.

    U would have to depreciate it the bike over a period of time (useful life). Also a bike will come under "travel" expenses and not "motorvehicle" because its a vehicle other than a car.

    And also the bike has also has to have a "direct" relationship with your work and not "personal".
  5. Sounds from the original post as though he doesn't own the bike now and wants to buy it this year and write off the full cost this year. Sounds from the other posts like that's not an option. D'oh! Shoulda bought it 3 years ago.
  6. Well yes thats right, once u buy an asset that has previously been used u have to use the same depreciating method (eg straght line) as the previous owner.

    But if the owner has written it off I would doubt it that the tax office will let u write off the same asset twice.

    But do seek professional advice, i'm not.... professional..... just advice lol.

  7. WTF? Lol You had better go read your text book some more. How the previous owner of an asset accounted/depreciated it has nothing to do with what you do with it.

    If someone disposes of a building to you for 100 grand, and they fully amortized it, you are telling me you are gonna do shit all about the 100g you payed? Its all based on cost and/or market value depending on the asset. You think the government has a database of every asset in existence? "Sorry son! That building aint got no tax benefits left in it. *Squeezes building* See! Dry as a bone! Better go after that bastard that owned it before you."

    As for tax laws in Australia, Im not sure of anything. But assuming it is anything like canada, as said above, it is to be depreciated over several years (tax laws may specify capital cost allowance). Generally if it is a mix of business/personal a portion can be deducted but not the full value.
  8. im in my second year of an accounting major and i dont know what the fcuk you guys are talking about.
  9. ha wait till your third year you'll forget everything then! :LOL: