What expenases are deductable when an IP reverts to a PPR in the same fiancial year.

[ggumpshots]

Replacing worn carpets or repainting walls and minor repairs are deductible in the year they occur.
However what happens if an IP reverts to PPR. The owner replaces/repairs the items, worn out during many years of renting AFTER IT REVERTS TO A PPR.
How long would the owner be able to claim these texpenses against the IP.
Would it need to be done within the tax year of the replacement or repairs

Tradesman can take months to start a job, in period of high demand. If the Ip became a PPR on june 23 , you would only have 1 week to do everything until the end of the financial year.

[ggumpshots]

Any help please or is this in the too hard basket?

[marg4000]

Can't help out much, except that I worked with a guy about 20 years ago (so this may be out of date) who returned from interstate to live in his house, thereby converting it back to a PPOR. Unfortunately he moved at the end of the financial year, and at the time was battling the tax department who would not allow any deductions because he had no rental income in the financial year when he did the repairs. At the time he was told that as it was not a rental property in the financial year he was not entitled to any deductions. I can't remember the eventual outcome, but this was in about 1990.

Better check with your accountant.
Marg

[buzzlightyear]

http://www.ato.gov.au/content/downloads/NAT1729_07.pdf

Check out page 12. It seems as if the costs to replace the carpet would have needed to be in the same period when the property ceased to produce income. I guess pre-paying for the work may have been an option (?)