Note that you make a capital gain from a depreciating asset only to the extent that you have used the depreciating asset for a non-taxable purpose.
Step 1: Determine whether you satisfy the basic conditions for the small business CGT concessions.
If so, go to step 2.
If not, go to step 3.
Step 2: Determine whether you qualify for the small business 15-year exemption (not relevant to capital gains from depreciating assets).
If yes, disregard the entire capital gain. You don't need to apply any of the other CGT concessions.
Step 3: Offset any capital losses against the capital gain.
Step 4: Determine whether you are eligible for the CGT discount.
If so, reduce the remaining capital gain.
Go to step 5.
Step 5: Determine whether the capital gain is from a depreciating asset and used at least partly for a non-taxable purpose.
If so, you are not eligible for any other concessions and can't reduce your capital gain any further.
If not, go to step 6.
Step 6: Determine whether you qualify for the small business 50% active asset reduction (if you answered yes at step 1 you will qualify). If so, reduce the remaining capital gain.
Note: You can choose not to apply the 50% active asset reduction and go straight to the small business retirement exemption or rollover in step 7
Amount remaining equals the net capital gain to be included in your assessable income for the year.Step 7: Determine whether you qualify for the small business retirement exemption or rollover. If so, reduce the remaining capital gain.
Note: Keep the necessary CGT records