Deduction：A scrapped Div 43 asset
Scenario:
My question is, can the balance of a Div 43 item (spa) used in an investment property written down to $6,300(original cost $9,200) that has been scrapped to be claimed as an outright deduction? If not, for tax purpose, how the closing value on the date of disposal should be treated?
Explanation:
If a Div 43 asset is scrapped, the owner is able to claim an immediate deduction where the asset has been “destroyed”. The deduction balance is equal to the undeducted construction expenditure at the date of destruction less the amount (if any) that the taxpayer has received, or has a right to receive, for the destruction of the capital works (ITAA 1997 s 43-40).