A quick tax deduction question

[craig73]

Hi,

I'm wondering can I claim travel/phone/postage expenses incurred during the construction of a rental home or is this considered capital expense?

Thanks, Craig.

 

[craigb]

i am far from a clever guru like others on this site, but as i under stand it what ever you are required to do to conduct your buisiness, can be claimed.
in a fair and justifiable reasoning.

 

[davewill]

the interest on the loan would be deductible straight away but i'd think that the other expenses would be capital if they incurred as a result of building. my opinion only, i'm not an accountant.

 

[BV]

the interest on the loan would be deductible straight away but i'd think that the other expenses would be capital if they incurred as a result of building. my opinion only, i'm not an accountant.

I agree and I am not an accountant either

 

[craig73]

Thanks everyone.

Yeh I have a feeling it should be considered an expense of building therefore it's capital. I will still take records to account and see what he says because it is quite a bit if it's claimable.

Craig.

 

[poppy]

If you travel to the property in relation to installing say the airconditioner or carpets (ie depreciating assets), you can add the cost of the travel etc to the item and depreciate it over the life of the item. That is actually documented in one of the ATO's new booklets on depreciating assets.

If you travel to the property to assist with the installation of some item of the building (eg a clothesline), then you may be able to add the cost of the travel to the building cost and depreciate that at 2.5% (but I think that is more of a grey area).

Also if you travel to the new property to say, meet the new Property manager and give them a copy of the keys, you should be able to claim some travel costs for that.

Travel to the property to do the practical completion inspection, or to assist with the landscaping, is more likely to be part of the cost base ie you can't claim it till you sell.

So it really depends on exactly what you are doing, and you may have to apportion it.

 

[Gee Cee]

From memory I think if you keep a detailed record and receipts then hand to your accountant that the majority of these expenses will be added to cost base.
IE not claimable in first year rented .

I am not a accountant. just thinking back over some stuff

Gee Cee

Greg

 

[craig73]

Thanks again. Yep, I have been to the accountant and I could claim a trip to meet with the managing agent for renting it out but for all else he will put it in the depreciation schedule.

Craig.