So I have a YouTube Channel that is generating income, and of course has expenses as well. Since I'm also a full time employee, for now I have declared my additional income as Misc income on my (white) tax form, together with expenses.
I have some expenses that went over the limit of "can be expensed in whole at once" of 100,000 JPY for the white tax form, so I've been doing linear depreciation based on the NTA straight line method guidelines.
So now comes the question: what if I sell an item I purchased for the channel before the depreciation period is over? So for instance let's say I bought an expensive video camera for 500,000 JPY on January 1st last year and as per NTA guidelines it depreciates over five years. So last year I declared an initial expense of 100,000 JPY, and I would again this year, etc until the camera is deemed worthless.
But what if say this year I decide that the video camera is no longer useful and sell it on Yahoo Auctions or whatever. I get 300,000 JPY for it. The sale happened on July 1st for instance.
So what would I then do? Do I need to declare 300,000 JPY as business income, but keep with the linear expense year after year? Or do I need to declare depreciation this year of half a year's worth (so 50,000 JPY) AND also declare a loss on the sale of 50,000 JPY? Since technically I would have sold an item still worth 350,000 JPY for just 300,000 JPY.
And in contrast, if I had managed to sell the camera for 400,000 JPY, I would need to still declare depreciation of half a year's worth (50,000 JPY) AND a profit of 50,000 JPY on the sale at the same time?
Thank you!!
by lostinoverstress