FILE NO:30735 OFFICE LOCATIONS 2-Dec-11 Sample House Delivered via E-mail Dear Client, Sample House Thank you for choosing Washington Brown to prepare your depreciation report. We attach for your information our assessment of depreciation for the above project based upon the Diminishing Value method and the Prime Cost method. You must choose either the Prime Cost method or Diminishing Value method. Once you choose your method of claim, you cannot alternate between the two options. The final page of this report is a graphical representation of the both methods in order to assist in the decision making process. This depreciation schedule has been prepared for the sole purpose of depreciation claims and may not be used for any other purpose. We have based our assessment upon the information as provided, together with the property inspection and our estimate of probable construction costs. A depreciating asset as defined in the Income Tax Assessment Act (ITAA) 1997 sect. 40-30(1), is an asset that has a limited effective life and can reasonably be expected to decline in value over the time it is used. The calculation of the amount of a deduction allowed with respect to a depreciating asset in part depends upon the cost of that asset. The cost has been determined by the amount you have paid to hold a depreciating asset.
OFFICE LOCATIONS The building allowance as defined in Section 43 of the ITAA 1997 is the amount of the deduction determined by the construction cost of the entity which incurred the expenditure (and not by what an entity incurred to acquire the capital work). We have not included items such as soft landscaping, demolition and the developers profit. However, we have included such items as design, council fees, authority fees and building preliminaries. The items classified as plant and equipment have been determined, in part, by TR2011/2. Where depreciating assets are co-owned, but are not partnership assets, the capital allowances provisions applies to the asset as if an individual's interest in the asset is the relevant asset. Each co-owner therefore must treat their depreciating asset (their interest in the underlying asset) in accordance with their own tax profile. This report will become void if you sell this property. Future owners should contact this office to discuss any future claims. Please refer to the year end summary pages in order to make your claim. Washington Brown Depreciation Pty. Ltd. does not accept any contractual, tortious or other form of liability for any consequences, loss or damage which may arise as a result of any other person acting upon or using this valuation. Yours faithfully, Washington Brown Depreciation Pty. Ltd. Registered Tax Agent 26956 002
OFFICE LOCATIONS PURCHASE OF A BUILDING KNOWN AS Sample House DATE OF SETTLEMENT September 28, 2009 CONTRACT EXCHANGE DATE September 7, 2009 CONSTRUCTION COMMENCEMENT YEAR 2000 CERTIFICATE OF CAPITAL EXPENDITURE INCURRED UPON PLANT AND EQUIPMENT ATTRACTING DEPRECIATION AND THE BUILDING ALLOWANCE
OFFICE LOCATIONS We hereby certify that the following costs in our opinion relate to the Plant and Equipment as included within the Purchase Contract between the relevant parties. This certification is in accordance with Division 40 of the Income Tax Assessment Act 1997. We hereby certify that the following costs in our opinion relate to the Capital Works Allowance as included within the Purchase Contract between the relevant parties. This certification is in accordance with Division 43 of the Income Tax Assessment Act 1997.
OFFICE LOCATIONS CERTIFICATE BASED UPON THE DIMINISHING VALUE METHOD
OFFICE LOCATIONS CONSTRUCTION SUMMARY - DIMINISHING VALUE DEPRECIATION & BUILDING ALLOWANCES BASED ON THE DIMINISHING VALUE METHOD AS OUTLINED IN THE NEW BUSINESS TAX SYSTEM (CAPITAL ALLOWANCES ) ACT1999. AMENDMENTS TO INCOME TAX ASSESSMENT ACT 1997 BY NEW BUSINESS TAX SYSTEM (CAPITAL ALLOWANCES) ACT 1999 (ACT 164 of 1999, ROYAL ASSENT 10 DECEMBER 1999). PROJECT: Sample House CLIENT: Sample House DATE: 2-Dec-11 JOB: 30735 DESCRIPTION VALUE CALCULATIONS PURCHASE PRICE $575,000 BUILDING COST (CIRCA 2000) $163,781 ADD BUILDERS PRELIMINARIES $29,481 ADD PROFESSIONAL FEES $3,276 ADD OWNERS INCLUSIONS $40,014 TOTAL CONSTRUCTION COSTS $236,552 $236,552 LESS TOTAL INSTALLED COST OF PLANT & EQUIPMENT ITEMS AS SHOWN OVER $21,841 LESS ALLOWANCE FOR ITEMS NOT ELIGIBLE FOR DEPRECIATION: $2,081 LESS TOTAL VALUE OF LOW POOL ITEMS $1,510 LESS CLIENT INCLUDED CAPITAL WORKS $34,403 SUB TOTAL $59,835 -$59,835 ORIGINAL BUILDING COSTS - DIVISION 43 ALLOWANCE $176,716
SCHEDULE OF DEPRECIABLE ITEMS BASED UPON THE DIMINISHING VALUE METHOD PROJECT: Sample House DATE: 2-Dec-11 CLIENT: Sample House JOB: 30735 Category : ASSETS GENERALLY (5 items) Life (DV) Diminishing Value Air Cond - Mini split systems $ 2,197 5 40% Floor coverings - Carpet $ 4,760 3 66.67% Hot water systems (excluding piping) - gas $ 1,972 2 100% Lights - Fittings (excluding hardwired) $ 1,524 <= $300** 100% Window blinds, internal $ 2,190 <= $300** 100% Category : BATHROOM ASSETS (1 item) Life (DV) Diminishing Value Exhaust fans (including light/heating) (30/11/2010) $ 284 <= $300** 100% Category : FIRE CONTROL ASSETS (1 item) Life (DV) Diminishing Value Alarms: Heat & smoke $ 220 <= $300** 100% Category : KITCHEN ASSETS (3 items) Life (DV) Diminishing Value Cook top (30/11/2010) $ 1,047 12 16.66% Dishwasher (30/11/2010) $ 1,640 10 20% Oven (30/11/2010) $ 1,875 12 16.66% Category : OUTDOOR ASSETS (4 items) Life (DV) Diminishing Value Automatic garage doors - Controls $ 182 <= $300** 100% Garden sheds, freestanding (24/03/2011) $ 2,265 15 13.34% Rain Water Tank $ 1,395 10 20% Rain Water Tank - Pumps $ 290 <= $300** 100% VALUE OF PLANT ITEMS $ 21,841 ** Indicates items that are less than or equal to $300.00.
Category : LOW VALUE POOL ITEMS (2 items) Life (DV) Diminishing Value Range hood (30/11/2010) $ 765 Low Pool* 18.75% Automatic garage doors - Motors $ 745 Low Pool* 18.75% VALUE OF LOW POOL ITEMS $ 1,510 * Indicates items allocated to Low Pool Category. These items must be calculated using Diminishing Value Method. Low Pool items are depreciated at 18.75% in the year of acquisition. In the following year the opening tax value of the pool is written down using the Diminishing Value rate of 37.5% p.a. Category : CLIENT INCLUDED CAPITAL WORKS (4 items) Life (PC) Prime Cost Bathroom renovation (30/11/2010) $ 15,490 Fencing (30/11/2010) $ 1,865 Kitchen renovation (30/11/2010) $ 11,673 Painting (30/11/2010) $ 5,375 VALUE OF CLIENT INCLUDED CAPITAL WORKS $ 34,403 Category : BUILDING ALLOWANCE (Capital Works) Life (DV) Diminishing Value Building allowance $ 176,716 VALUE OF BUILDING ALLOWANCE $ 176,716
DIMINISHING VALUE - YEAR END SUMMARY Sample House DEPRECIATION LOW VALUE CAPITAL WORKS FINANCIAL YEAR PLANT & EQUIPMENT POOL ITEMS DEDUCTIONS END AMOUNT CLAIMABLE $9,172 $140 $3,341 2009 / 2010 $12,653 $3,746 $370 $4,920 2010 / 2011 $9,036 $2,102 $375 $5,278 2011 / 2012 $7,755 $1,397 $234 $5,278 2012 / 2013 $6,910 $1,021 $146 $5,278 2013 / 2014 $6,446 $788 $92 $5,278 2014 / 2015 $6,158 $627 $57 $5,278 2015 / 2016 $5,962 $507 $36 $5,278 2016 / 2017 $5,821 $414 $22 $5,278 2017 / 2018 $5,714 $341 $14 $5,278 2018 / 2019 $5,633 $282 $9 $5,278 2019 / 2020 $5,568 $234 $5 $5,278 2020 / 2021 $5,517 $194 $3 $5,278 2021 / 2022 $5,476 $162 $2 $5,278 2022 / 2023 $5,442 $135 $1 $5,278 2023 / 2024 $5,415 $113 $1 $5,278 2024 / 2025 $5,392 $95 $1 $5,278 2025 / 2026 $5,373 $80 $0 $5,278 2026 / 2027 $5,358 $67 $0 $5,278 2027 / 2028 $5,345 $56 $0 $5,278 2028 / 2029 $5,334 $47 $0 $5,278 2029 / 2030 $5,325 $40 $0 $5,278 2030 / 2031 $5,318 $34 $0 $5,278 2031 / 2032 $5,312 $28 $0 $5,278 2032 / 2033 $5,306 $24 $0 $5,278 2033 / 2034 $5,302 $20 $0 $5,278 2034 / 2035 $5,298 $17 $0 $5,278 2035 / 2036 $5,295 $15 $0 $5,278 2036 / 2037 $5,293 $12 $0 $5,278 2037 / 2038 $5,290 $10 $0 $5,278 2038 / 2039 $5,288
OFFICE LOCATIONS CERTIFICATE BASED UPON THE PRIME COST METHOD
OFFICE LOCATIONS CONSTRUCTION SUMMARY - PRIME COST DEPRECIATION & BUILDING ALLOWANCES BASED ON THE PRIME COST METHOD AS OUTLINED IN THE NEW BUSINESS TAX SYSTEM (CAPITAL ALLOWANCES ) ACT1999. AMENDMENTS TO INCOME TAX ASSESSMENT ACT 1997 BY NEW BUSINESS TAX SYSTEM (CAPITAL ALLOWANCES) ACT 1999 (ACT 164 of 1999, ROYAL ASSENT 10 DECEMBER 1999). PROJECT: Sample House CLIENT: Sample House DATE: 2-Dec-11 JOB: 30735 DESCRIPTION VALUE CALCULATIONS PURCHASE PRICE $575,000 BUILDING COST (CIRCA 2000) $163,781 ADD BUILDERS PRELIMINARIES $29,481 ADD PROFESSIONAL FEES $3,276 ADD OWNERS INCLUSIONS $40,014 TOTAL CONSTRUCTION COSTS $236,552 $236,552 LESS TOTAL INSTALLED COST OF PLANT & EQUIPMENT ITEMS AS SHOWN OVER $23,351 LESS ALLOWANCE FOR ITEMS NOT ELIGIBLE FOR DEPRECIATION: $2,081 LESS TOTAL VALUE OF LOW POOL ITEMS N/A LESS CLIENT INCLUDED CAPITAL WORKS $34,403 SUB TOTAL $59,835 -$59,835 ORIGINAL BUILDING COSTS - DIVISION 43 ALLOWANCE $176,716
SCHEDULE OF DEPRECIABLE ITEMS BASED UPON THE PRIME COST METHOD PROJECT: Sample House DATE: 2-Dec-11 CLIENT: Sample House JOB: 30735 Category : ASSETS GENERALLY (5 items) Life (PC) Prime Cost Air Cond - Mini split systems $ 2,197 5 20% Floor coverings - Carpet $ 4,760 3 33.33% Hot water systems (excluding piping) - gas $ 1,972 2 50% Lights - Fittings (excluding hardwired) $ 1,524 4 25% Window blinds, internal $ 2,190 4 25% Category : BATHROOM ASSETS (1 item) Life (PC) Prime Cost Exhaust fans (including light/heating) (30/11/2010) $ 284 10 10% Category : FIRE CONTROL ASSETS (1 item) Life (PC) Prime Cost Alarms: Heat & smoke $ 220 6 16.67% Category : KITCHEN ASSETS (4 items) Life (PC) Prime Cost Cook top (30/11/2010) $ 1,047 12 8.33% Dishwasher (30/11/2010) $ 1,640 10 10% Oven (30/11/2010) $ 1,875 12 8.33% Range hood (30/11/2010) $ 765 12 8.33%
Category : OUTDOOR ASSETS (5 items) Life (PC) Prime Cost Automatic garage doors - Controls $ 182 3 33.33% Automatic garage doors - Motors $ 745 3 33.33% Garden sheds, freestanding (24/03/2011) $ 2,265 15 6.67% Rain Water Tank $ 1,395 10 10% Rain Water Tank - Pumps $ 290 10 10% VALUE OF PLANT ITEMS $ 23,351 Category : CLIENT INCLUDED CAPITAL WORKS (4 items) Life (PC) Prime Cost Bathroom renovation (30/11/2010) $ 15,490 Fencing (30/11/2010) $ 1,865 Kitchen renovation (30/11/2010) $ 11,673 Painting (30/11/2010) $ 5,375 VALUE OF CLIENT INCLUDED CAPITAL WORKS $ 34,403 Category : BUILDING ALLOWANCE (Capital Works) Life (PC) Prime Cost Building allowance $ 176,716 VALUE OF BUILDING ALLOWANCE $ 176,716
PRIME COST - YEAR END SUMMARY Sample House DEPRECIATION LOW VALUE CAPITAL WORKS FINANCIAL YEAR PLANT & EQUIPMENT POOL ITEMS DEDUCTIONS END AMOUNT CLAIMABLE $3,368 N/A $3,341 2009 / 2010 $6,709 $4,787 N/A $4,920 2010 / 2011 $9,707 $4,360 N/A $5,278 2011 / 2012 $9,638 $2,686 N/A $5,278 2012 / 2013 $7,964 $1,522 N/A $5,278 2013 / 2014 $6,800 $963 N/A $5,278 2014 / 2015 $6,241 $828 N/A $5,278 2015 / 2016 $6,106 $819 N/A $5,278 2016 / 2017 $6,097 $819 N/A $5,278 2017 / 2018 $6,097 $819 N/A $5,278 2018 / 2019 $6,097 $692 N/A $5,278 2019 / 2020 $5,970 $538 N/A $5,278 2020 / 2021 $5,816 $458 N/A $5,278 2021 / 2022 $5,736 $279 N/A $5,278 2022 / 2023 $5,557 $151 N/A $5,278 2023 / 2024 $5,429 $151 N/A $5,278 2024 / 2025 $5,429 $110 N/A $5,278 2025 / 2026 $5,388 $0 N/A $5,278 2026 / 2027 $5,278 $0 N/A $5,278 2027 / 2028 $5,278 $0 N/A $5,278 2028 / 2029 $5,278 $0 N/A $5,278 2029 / 2030 $5,278 $0 N/A $5,278 2030 / 2031 $5,278 $0 N/A $5,278 2031 / 2032 $5,278 $0 N/A $5,278 2032 / 2033 $5,278 $0 N/A $5,278 2033 / 2034 $5,278 $0 N/A $5,278 2034 / 2035 $5,278 $0 N/A $5,278 2035 / 2036 $5,278 $0 N/A $5,278 2036 / 2037 $5,278 $0 N/A $5,278 2037 / 2038 $5,278 $0 N/A $5,278 2038 / 2039 $5,278
Diminishing Value Method Vs. Prime Cost Method $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 2029 / 2030 2027 / 2028 2025 / 2026 2023 / 2024 2021 / 2022 2019 / 2020 2017 / 2018 2015 / 2016 2013 / 2014 2011 / 2012 2009 / 2010 Diminishing Value Method Prime Cost Method