Hi guys,
Was just after a bit of tax advice in regards to a purchase my 2 brothers and i just made.
Basically we purchased a 4 bedroom house with DA approved plans for subdivision and a new house. Our plan is to rent out the house that is there, build the new house, subdivide and sell both. The loan is under my younger brothers name (his income is $130k)
Purchase price was 825k, rent will be $700/week, cost of new build 350-400k. Hopefully sell both for around $800k each.
My question is are there any tax implications we need to know about that are not obvious? My 2 brothers will be completing the build (they are licensed builders). I was wondering are we better to charge them out at an inflated hourly rate (thus reducing capital gain but in turn increasing their individual income tax), or at a reduced hourly rate thus increasing capital gain but in turn increasing their income tax?
Any help would be greatly appreciated because we have not alot of idea in regards to taxation matters!
Thanks
Dan
Was just after a bit of tax advice in regards to a purchase my 2 brothers and i just made.
Basically we purchased a 4 bedroom house with DA approved plans for subdivision and a new house. Our plan is to rent out the house that is there, build the new house, subdivide and sell both. The loan is under my younger brothers name (his income is $130k)
Purchase price was 825k, rent will be $700/week, cost of new build 350-400k. Hopefully sell both for around $800k each.
My question is are there any tax implications we need to know about that are not obvious? My 2 brothers will be completing the build (they are licensed builders). I was wondering are we better to charge them out at an inflated hourly rate (thus reducing capital gain but in turn increasing their individual income tax), or at a reduced hourly rate thus increasing capital gain but in turn increasing their income tax?
Any help would be greatly appreciated because we have not alot of idea in regards to taxation matters!
Thanks
Dan