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From: Michael Mudman
Following on from previous discussions on hybrid trusts, I was wondering how depreciation works if money is borrowed in my own name to buy units in a trust.
I understand the trust receives the rental income and pays all the expenses before distributing what's left to the unit holder. This is then offset against the interest on the loan, allowing you to still negative gear the property.
Is the depreciation report from the QS used in the personal tax return of the unit holder? I'm a bit unsure of how this works because the unit holder has borrowed the money to buy units in the trust - not to buy the actual property itself. Can a depreciation schedule still be used?
Following on from previous discussions on hybrid trusts, I was wondering how depreciation works if money is borrowed in my own name to buy units in a trust.
I understand the trust receives the rental income and pays all the expenses before distributing what's left to the unit holder. This is then offset against the interest on the loan, allowing you to still negative gear the property.
Is the depreciation report from the QS used in the personal tax return of the unit holder? I'm a bit unsure of how this works because the unit holder has borrowed the money to buy units in the trust - not to buy the actual property itself. Can a depreciation schedule still be used?
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