Adding Back Depreciation


I had a bit of discussion on this point to a few professionals, and everyone is giving me a different numerical answer.

Purchase price of property $188K 1/1/00

Sale price of property $250k 1/3/02

Depreciation write off since purchase - $21K

Closing written down value of Depreciation schedule $5K

Total of value of chattels at the start $40K

For arguments sake the property has been held for more than 12 months, and we will disregard all other capital expenses.

This is a hypothetical example only.

My Question is do I need to add back the depreciation into the cost base at all when calculating the capital gains.?

Is the value of chattels needed to work out the capital gain?

What do you do with the closing w.d.v. Is that a writeoff?

I have purchased Dales book and there is no reference to adding back depreciation at all, however I have been told a few times that It should be done. If you don't then it is considered DOUBLE DIPPING.

I hope someone can clarify this for me.

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