Issue
When using the Logbook method to apportion motor vehicle expenses, the depreciation amounts may appear inconsistent between the Work Related Car Expense worksheet and the Depreciation sub-worksheet.
Explanation
This behaviour is expected.
When the Logbook method is selected, the Car Expense worksheet uses the full (100%) depreciation amount from the Depreciation sub-worksheet.
It does not use the Business Use % entered in the Depreciation sub-worksheet.
Instead, LodgeiT calculates the deductible depreciation by:
- Retrieving the 100% depreciation amount from the Depreciation sub-worksheet.
- Including this amount as part of the total car expenses.
- Applying the Business Use % entered in the main Car Expense worksheet (the Logbook percentage) to the total expenses, including depreciation.
Scenario
A motor vehicle has the following expenses:
| Expense | Amount |
|---|---|
| Fuel and oil | $4,000 |
| Registration | $2,000 |
| Depreciation | $10,000 |
| Insurance | $1,500 |
| Repairs and maintenance | $2,000 |
| Total Expenses (100%) | $20,000 |
The Business Use (Logbook) percentage is 70%.
How LodgeiT Calculates the Deduction
The Car Expense worksheet lists all expenses at 100%, including the full depreciation amount of $10,000.
LodgeiT then applies the 70% Logbook Business Use to the total expenses:
Why the Depreciation Appears as $10,000
The Depreciation Worksheet calculates:
- Decline in Value: $10,000 (100%)
- Business Portion Decline in Value: $7,000 (70%)
Although the Depreciation Worksheet displays both the full depreciation and the business portion, the Car Expense worksheet always imports the 100% depreciation amount ($10,000) into the list of expenses.
It then applies the Logbook Business Use % (70%) to the total expenses, rather than applying the business percentage to each expense individually.
Result
| Item | Amount |
|---|---|
| Total Car Expenses (100%) | $20,000 |
| Logbook Business Use | 70% |
| Deductible Car Expenses | $14,000 |
Note: This behaviour is expected. When using the Logbook method, the Business Use % entered in the Car Expense worksheet determines the final deductible amount. The Business Use % shown in the Depreciation Worksheet is informational and is not separately applied within the Car Expense calculation, preventing depreciation from being apportioned twice.
Important
When using the Logbook method:
- Enter the Business Use % in the main Car Expense worksheet.
- The Business Use % entered in the Depreciation sub-worksheet is not used in the Logbook calculation.
- The depreciation line may display the 100% depreciation amount, but the final deductible amount is calculated using the Logbook Business Use % from the Car Expense worksheet.
This ensures the depreciation is apportioned consistently with all other motor vehicle expenses under the Logbook method.