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The adjusted cost of an individual tool is calculated as
D - (D x [E / A])
D = the original cost of the eligible tool.
E = the total of the tradesperson's tools and apprentice
mechanic tools deductions that you claimed in the year that the tool was
purchased (assume the entire apprentice mechanic tools deduction was claimed
in the year, even if a portion was carried forward).
A = the total cost of eligible tools that you purchased in
We will use the examples used in the
tradesperson's tools deduction and the apprentice mechanic's tools
deduction. The total cost of tools is $3,000. Let's
say there are 2 individual tools, for $2,000 plus $1,000.
Assume that in 2016, the higher cost tool is sold for $1,200.
adjusted cost of the tool is calculated using:
A = Tool purchases in 2015 = $3,000
D = Original cost of sold tool = $2,000
E = Tools deductions of $500 + $1,227.50 =