Accounting / Tax question

Discussion in 'Accounting and Tax' started by Pedro61, 19th Sep, 2014.

  1. Pedro61

    Pedro61 Member

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    Question for all the number crunchers on the Forum:

    Say I start proceedings on a property deal and go some way down the path but eventually pull out of the deal. If I incur any costs without actually buying, are those costs tax deductible?

    The reason I ask is that I have an accountant telling me that because there is no property to place those costs against, they are NOT deductible (in my case they are some minor legal costs that I incurred just before the deal went unconditional). Because I pulled out before the final deadline I got all my deposit back, but still have to pay the legal beagles.

    I would have thought that even without a property to claim that cost against, they are a general cost of investment and therefore legitimate. :confused:

    I welcome any constructive opinions.

    Pedro
     
  2. Terry_w

    Terry_w Member

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    That is correct. Not deductible as it does no relate to the production of any income.
     
  3. coastymike

    coastymike Member

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    As terry says doesnt form any of the cost base elements. Non deductible. Not a cost base item so no capital loss.
     
  4. Paul@PFI

    Paul@PFI Tax, SMSF & Planning

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    Its too preliminary. NEVER deductible or a CGT loss.
     
  5. Pedro61

    Pedro61 Member

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    Thanks for confirming,

    It helps when you get a second (fourth in this case) opinion.