Claimable repairs ...

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From: Will G


I have had repairs done on a bathroom in an IP but are not sure what proportion I can claim as repairs or renovations.

Tiles were falling off the wall in the shower, there were cracks in the shower screen and the vanity unit was badly water damaged.

I had everything ripped out to verify the damages and as a result had everything replaced with new items(tiles, screen, tapware and vanity unit).

Q1. What am I be entitled to claim as a tax deduction ?

Q2. What would the ATO class as 'capital improvements' that should be depreciated at 2.5% ?

Q3. If the whole lot is classed as 'Capital Improvement' can I claim the remainder of the written off value of the damaged bathroom as a tax deduction and depreciate the new bathroom @ 2.5% ?.

Cheers,
Will
 
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Reply: 1
From: Nigel W


Here's another one - resurfacing a shower or bath which has been damaged with cigarette burns and cracking (what the!...who smokes in the shower I ask you?!). Is it "repair" or of a capital nature?

I lean towards the former (but then I've got a vested interest!)

Any thoughts oh great tax gurus (and we all know who I'm referring don't we D...)

Cheers
N.
 
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Reply: 2
From: Dale Gatherum-Goss


Hi Will


>I have had repairs done on a
>bathroom in an IP but are not
>sure what proportion I can
>claim as repairs or
>renovations.


let's see . . .


>Tiles were falling off the
>wall in the shower, there were
>cracks in the shower screen
>and the vanity unit was badly
>water damaged.
>
>I had everything ripped out to
>verify the damages and as a
>result had everything replaced
>with new items(tiles, screen,
>tapware and vanity unit).


How long have you owned the IP? If it is less than 1 year, we would have to capitalise this cost and claim 2.5% depreciation as a tax deduction.

However, if it is longer than 1 year, then I would argue that the costs were in fact a repair of the original and restoring it to its proper position.

The facts will determine the exact claim.


I hope that this helps

Dale
 
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Reply: 1.1
From: Dale Gatherum-Goss


Hi Nigel


I believe that Duncan is busy just now and so I'll answer if I may . . .

>Here's another one -
>resurfacing a shower or bath
>which has been damaged with
>cigarette burns and cracking
>(what the!...who smokes in the
>shower I ask you?!). Is it
>"repair" or of a capital
>nature?


As i just mentioned to the original post, a lot will depend upon how long you have owned the IP. If it is within the first year, you will not be able to claim a tax deduction regardless of whether it is a repair or a capital improvement.

However, if you have owned the property for more than 1 year, I would think that we should be able to claim a tax deduction for repairing the item to its original state.


>I lean towards the former (but
>then I've got a vested
>interest!)
>
>Any thoughts oh great tax
>gurus (and we all know who I'm
>referring don't we D...)


Duncan? Your thoughts are expected it would seem . . .

have fun

Dale

>Cheers
>N.
 
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Reply: 1.1.1
From: Duncan M




> Duncan? Your thoughts are expected it would seem . . .

<Pats Dale on the head>

Good answer lad, right on the ball.


Regards,

Duncan.
 
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Reply: 1.1.1.1
From: Dale Gatherum-Goss


Ah!!!!!!! Bliss!!!

It is wonderful to have a mentor who is so kind and generous with his praise. Thank you. It is soooo inspiring.

have fun!

Dale
 
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Reply: 2.1
From: Will G



I have owned the IP since late 97. Thus it should be OK to claim as a deduction ...

Would that apply to the new Tapware ?. I suppose I could have got the Tapware reseated & replaced washers.

Thanks Dale & everybody for your help. This will help preparing my Tax return.

Cheers,
Will
 
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Reply: 2.1.1
From: Dale Gatherum-Goss


Hi Will

Yes, the whole costs should be tax deductible then because you have merely rectified the problem and repaired the item to it original state.

Have fun

Dale
 
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