Books, seminars, etc and tax

[TerryG]

G'day all,

My situation ... 1 IP and looking for my next one ......
(gee, it's a bit like AA, isn't it ...)

Just wondering how property and investment-related books, magazines, seminars, etc can be claimed? Or can they?

Do I combine them into a library which depreciates? Do I claim them individually for the financial year? Do I add them to the cost base of buying a property? Or do I stick them in the outhouse and realise their true value? ;-)

Any hints appreciated
Cheers, Terry

 

[Starting out]

Your accountant should organise this for you. We just supply the receipts and they are claimed with the financial year of purchase.
Reagards
S.O

 

[geoffw]

This year, for the first time, my accountant was questioning the content of the books.

Books relating to renting out a property (business I was already engaged in) were OK- but books related to investment activities I was not currently involved in (say if I'd bought a book on flipping) were not really kosher.

I believe there was a recent case where a deduction for a seminar on property investment was only partially allowed. The investor had buy and hold properties, but did not trade. He was allowed the portion of the seminar relating to things to do with renting, but not the parts relating to other activities.

This is probably a really murky area.

The ATO state that

No deduction is allowable for self-education expenses if the study is to enable a taxpayer to get employment, to obtain new employment or to open up a new income-earning activity (whether in business or in the taxpayer's current employment). This includes studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.

but I gather that they are becoming a lot tighter about what they regard as "opeing up a new income-=earning activity", probably especially after the amount of money claimed for seminars in the last few years.

 

[TerryG]

Thanks for the replies.

Certainly food for thought .....

I don't use an accountant ... yet!

What I plan to do is this:
(i) all education items generated before my 1st IP purchase get added to it's cost base. This would be the majority of the items anyway.
(ii) all items incurred whilst holding IP's will be split and claimed equally amongst them in the year they are incurred.

I figure this to be pretty close to ATO's interpretation.
Hopefully, anyway ....

Cheers, Terry