I have a few questions related to exactly what can and can’t be claimed as tax deductions for body corporate fees and charges. Let’s use a hypothetical example of body corporate fees of $1,000 per annum, that comprises $750 administration fees and $250 contribution to a sinking fund. In any given year, there may be no use of the sinking fund, so how much would be claimable that year? The next year, there is a project to paint the exterior of the building and this is funded from the sinking fund. Based on evenly distributing the cost across all the units in the body corporate, an amount of $500 is taken from the sinking fund on behalf of each unit. Does $500 then become deductible? If for painting, it would be immediately deductible wouldn’t it? What about if the complex requires a new pool pump, filter etc. Should the cost of these be apportioned across each unit and appropriate depreciation claimed? What about if the unit is owned for say 5 years and none of the money contributed to the sinking fund are expended and the owner decides to sell. Do the sinking funds contributed for 5 years get added to the cost price of the unit, to reduce capital gains? I have read the relevant section in ATOs rental Properties guide (NAT 1729-6.2003) but I find it rather vague. Any ideas? Regards, ChrisOs.