Body Corp - Tax Breakup

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From: Gordon Austin


Ok tax experts see if you can beat Dale to answer this one.

The Body Corp fee can consist of Admin, Sinking fund and Insurance. I think I recall reading that the Sinking Fund needs to be reported separately as it is not treated as a standard rental deduction. Can someone clarify this for me please.

Thanks - Gordon
 
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Reply: 1
From: Dale Gatherum-Goss


HI

Do I get a prize? Oh well, I'll just do it because I like to . . .

Are you asking from the BC's point of view, or the landlord who own an IP?

Dale
 
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Reply: 1.1
From: Gordon Austin


As the landlord thanks Dale.

Yeah you get the prize - a free night out with TW (should I ask her first?).

GA
 
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Reply: 1.1.1
From: Dale Gatherum-Goss


Hi!

I'll take it! She is one amazing lady and any chance to learn more from someone as experienced and knowledgeable as TW would be very much welcomed.

OK, assuming the invoices were sent separately, or at least specified as normal BC fees, and sinking fund . . .

the normal costs are, of course, tax deductible.

the sinking fund contribution is not tax deductible

However, when the BC actually does the improvements for which they required the sinking fund, you can claim a "Capital Works" deduction for your share of ownership.

Does this help?

Dale
 
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Reply: 1.1.1.1
From: Gordon Austin


Dale,

I only ever receive the one invoice from the Body Corp manager. The invoice is for a single amount but if you look at the breakup there is a separate amount for Admin, Sinking fund and Insurance. This would be typical for many investors who own units, apartments or townhouses. Also for one of my units the property manager pays the body corp and rates etc as part of their management service. Hence I don't get to see the bill. I just receive their monthly statement and if they have paid the body corp bill it just shows on my Property Manager's statement as a single amount.

So still a little confused how to record the breakout.

Thanks - Gordon
 
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Reply: 1.1.1.1.1
From: Dale Gatherum-Goss


Hi

In that case, you should be able to claim a tax deduction . . . unless you know for sure that there is a sinking fund contribution.

Worth a thought

Dale
 
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