Depreciation report or no?

Im a bit undecided as to a dep report on my newest property,
Its being rented for one year until I move into it, not sure if I should have a dep report drawn up for just one year. .

Plus I know it will increase tax if I ever sell, right now I say no but maybe someone might have a twist for me?

Hard to say whether it's worth doing. Depends on the age of the place and what is inside it.
In a year's rental, there will be hadly anything claimed on the building, so hardly any CGT imposte.
Assets (fixtures and fittings) worth under $300 will be claimed in full. Those $300 - $1,000 will go into the LVP (18.75% for the first part year).
Got any photos you can email me?
Scott

Yeah mate, Ill pm them through right now, thanks alot!

Is it worth getting a dep schedule done for a unit built about 33-34 yrs ago?
There's been a minor refurbishment of the kitchen only.

Thanks,

Email me some photos if you have them and I'll let you know what I think. There will be depreciation to claim, but it probably won't be worth the cost to you of sending a QS there.

Scott

Hey Scott,
Got a few more to get you to do in next couple of months, quick q though (sorry to hijack) but 26/6/86 is on my strata plan date, would it be worth while doing one for this dump?

want2bewealthy said:

Plus I know it will increase tax if I ever sell, right now I say no but maybe someone might have a twist for me?

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Catch 22

You will have to reduce the cost base by the amount of capital allowances you could have claimed regardless of whether you actually claim.

Also, you will be required to produce this info for any purchaser in the future so they can determine how much they can claim.

Cheers,

Rob

You will have to reduce the cost base by the amount of capital allowances you could have claimed regardless of whether you actually claim.

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This was rescinded a couple of years ago, Rob. I think they realised it was pretty silly.

Nathan, that 1986 place of yours might fall into the 4% window, so it could be worth doing. Building start start is the date you need.

Scott

depreciator said:

This was rescinded a couple of years ago, Rob. I think they realised it was pretty silly.

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First time I have heard the CGT adjustment has been rescinded ?

PS LA 2006/1 states:

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1. For the purpose of working out the «cost» «base» and reduced «cost» «base» of a CGT asset under Division 110 of the Income Tax Assessment Act 1997 (ITAA 1997), the Commissioner will accept that a taxpayer cannot deduct an amount under Division 43 of the ITAA 1997 for construction expenditure in respect of an asset if the taxpayer:

- does not (as a question of fact) have sufficient information to determine the amount and nature of the expenditure, and

- does not seek to deduct an amount in relation to the expenditure under Division 43 (or any other provision).

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NOTE This is not just a mere election not to bother with Capital Works deductions. You must be in a situation where you do not have information AND it is unreasonably onerous to try to find such information.

This is judged on a case-by-case basis !!!!

Cheers,

Rob

Semantics, Rob. I'll have to take your word about the relevance of PS LA 2006/1 - it seems to be about the following and I'm not wading through it:

PS LA 2006/1
SUBJECT: Remission of additional superannuation guarantee charge imposed under Part 7 of the Superannuation Guarantee (Administration) Act 1992 and administrative penalty imposed under subsection 284-75(3) of Schedule 1 to the Taxation Administration Act 1953 .

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The ATO CGT Guide states:

...however if you omitted to claim capital works deductions because you did not have sufficient information to determine the amount and nature of the construction expenditure, there is no need to exclude the amount of such deductions from the reduced cost base of the CGT asset.

So let's just agree that they've relaxed their stance and made it more sensible. As an aside, I wonder how often it was enforced previously? Rarely, I'm guessing.

Scott