Accounting & Bookkeeping Query

Hi Guys,

Hope all forum G's & G's have a safe and happy Chrissy and New Year. I am glad it is the holis, so now I can catch up on the SS forum and get 'property thinking' again.....albeit only for 2 weeks.......oh well.

I have been meaning to query this for a while and forgot about it. It may come in handy for next years tax (and also last years tax if I can back date it).

With regards to time spent on managing the business side of all my rental properties (i.e. not Property Management side), I am trying to figure out how to claim time spent on doing various 'property investment' activities.

Some examples include:

1. Reading / Sorting / Filing all mail relating to investment properties.
2. Updating relevant spreadsheets (from accounting spreadsheets for submission to accountant at year end (this takes a bit of time, so that when I give the accountant the excel doc at end of financial year, they don't need to sort everything out and charge me more money in the process) to analysis spreadsheets for determing potential properties)
3. Reviewing all Property Management letters from all PM's (including invoices, and updating spreadsheets etc)

I know I can claim all telephone, travel, etc,but when it comes down to hours spent doing something like above, how do you allocate an hourly rate.

Do you just find out rates for bookkeppers and use that.

Also, can this time (or allowance for time) be broadened to cover time spent on internet searching for properties (in areas where you already have property), composing emails and letters to bank managers, broker, insurance, PM, etc.) telephone calls.

Interested in replies.

Cheers,

F
 
Gee, if I could work out a way for claimimg the time I spent doing such things, I'd go from paying nearly zero tax to having the ATO pay me.
 
Gee, if I could work out a way for claimimg the time I spent doing such things, I'd go from paying nearly zero tax to having the ATO pay me.

Good idea there Rob, I reckon we could lodge a claim and see what happens....:D
Otherwise pay the misses to do it ;)
 
With regards to time spent on managing the business side of all my rental properties (i.e. not Property Management side), I am trying to figure out how to claim time spent on doing various 'property investment' activities.
....when it comes down to hours spent doing something like above, how do you allocate an hourly rate.
Waste of time Fudge :rolleyes: What would become a deduction (if it were allowed, which it isn't) to your IP activities would become more taxabke income to you the individual.

Also, can this time (or allowance for time) be broadened to cover time spent on internet searching for properties (in areas where you already have property), composing emails and letters to bank managers, broker, insurance, PM, etc.) telephone calls.
In a word, "NO". There are no deductions available for searching for property. There are only deductions available for maintaining / inspecting property you already own.
 
I agree. You cannot work for yourself, ie pay yourself a wage. If your properties were owned by a separate entity then you could claim a wage - but then you would be diverting money from a tax efficient entity, such as a trust, to yourself and paying more tax.
 
Waste of time Fudge :rolleyes: What would become a deduction (if it were allowed, which it isn't) to your IP activities would become more taxabke income to you the individual.

In a word, "NO". There are no deductions available for searching for property. There are only deductions available for maintaining / inspecting property you already own.

OK, thanks Prop, but what if:.........................

As some of my properties are held in discretionary trusts, I am led to believe that the trust can pay a wage to any of my beneficiaries , for services such as administration activities of the trust (i.e. updating accounting spreadsheets) , or for the running of the trust's business or investments (i.e. internet searching / RP Data analysis, etc). (or even services for maintenance of internet connection / firewalls / security, software upgrades, etc.)

This way if the trust has a loss in the financial year, the income owed to the beneficiary will be paid in future years, (but withdrawn or borrowed and paid in real time from personal account) and minimise the tax paid once trust is making a net income.??

What are your thoughts.......

Cheers,

F
 
Discretionary trusts can just distibute to beneficiaries at the discretion of the trustee. So I cannot see the point in paying a wage as it may complicate things - withholding of tax etc.

Would be only beneficial if the person wasn't a beneficiary. eg. a friend with losses or low income.
 
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