CTT Limited has an asset which cost $300 with related accumulated depreciation of $100. The accumulated depreciation for tax purposes is $180 and the company tax rate is 30%. The tax base of this asset is:
A) $120;
B) $220;
C) $80;
D) $20.

Question

Quizplus · Accepted Answer

The tax base of the asset is the cost of the asset minus the accumulated depreciation for tax purposes. In this case, the cost of the asset is $300 and the accumulated depreciation for tax purposes is $180. Therefore, the tax base of the asset is $300 - $180 = $120.

CTT Limited Has an Asset Which Cost $300 with Related