Depreciation disallowance

Tibor

Tibor

Hi everyone,

I migh tbe missing a thread, but can not find anything about the latest ATO induced property investor pain, reclassification, what is building and what is not.

Last month API have alerted on this matter and I already got some offer to redo my depreciation schedule for $67 a piece on each property by DEPRO. Obviously I will be forced to redo it an use the new figures which will be considerabky less beneficial than the previous (AO approved) were. It is a real shame that some silly legal eagle on some stupid tribunal can make a decision which has very little or no commercial sense (40 years depreciation for kitchen and bathroom!!! Hello anyone at home?)

Any thoughts?


Tibor
 
Tibor,

You will still get the same benifit from the revised QS report over the 40 year term, just not the higher deminishing to start off with like it was before.
 
Rixter

Not quite the same effect.

If certain plant is now part of building (40 years depn at 2.5%), then not only is it a reduced cash flow by longer period to depreciate, but ultimately it would have an effect on the CG calculation if one was to sell.

That asuumes I understand the effects of these depreciation changes.

I'm hoping common sense will prevail and it will be cahllenged or changed ... but I'm not holding my breath.

Regards
Joe D
 
Hi

There was an appeal lodged against this decision, but, it was then withdrawn. So, at the moment, we're stuck with it.

Dale

Originally posted by Joe D

I'm hoping common sense will prevail and it will be cahllenged or changed ... but I'm not holding my breath.

Regards
Joe D
Click to expand...
 
Hi

This is a stupid argument I agree but it comes down to "what is a fixture, fitting or attachment."

Originally the wall of a building as an example was considered as part of the building. If it was removed the building could fall down. So it formed part of the building and therefore was subject to 2.5% depreciation.

Kitchen cupboards were attached to the wall, albeit by screws or similar and if removed would not cause the building to collapse, so these were classified as attachments, and claimable as such.

Now the ATO has decided in its wisdom that a kitchen cupboard as an example, as it is now "screwed" to the walls is really a part of the building, and now no longer an attachment to the building and therefore their current ruling. It seems to me that they are really trying very hard to gain a few extra dollars each year.

The annoying part I find is that the ATO can arbitraliy make a ruling, their ruling, which you must accept or challenge at your expense.

Regards

Ross
 
The annoying part I find is that the ATO can arbitraliy make a ruling, their ruling, which you must accept or challenge at your expense.
Click to expand...
I understand that the Tax Commissioner has a power that no member of parliament has. He can decree (for tax purposes) that something that did happen did not happen, and he can decree that something which did happen did in fact happen.

Yes, I find that more than annoying. It has cost me a bucketload.
 
But when you renovate the kitchen you get the remaining write off value.

Therefore, when I knock down a wall, I should get a write off value for the materials.... no?

There is now less plant, so why wouldn't it work???

Jas
 
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