Depreciation

W

WebBoard

Guest
From: Mojo Jojo


I would be very grateful on any clarification of the following;

I have just purchased an apartment that is eight years old. I have been told that I should contact the past owners and findout if they have claimed any depreciation on the fittings. If they were all owner occupiers or haven't claimed the depreciation then I can claim all of the depreciation. If they have then I can't claim any.

Can anyone confirm that for me?

thanks
 
Last edited by a moderator:
Reply: 1
From: Michael G


Hi,

Just as easy (and more accountable) to get a depreciation schedule from a qualified Quantity Surveyor. They will put together a report which you can use to make your claims that (in theory) will be fully approved by the Tax Office.

That is, tax office accepts reports created by Q.S.

As far as I understand, 1st owner depreciates items, then at sale time those tax savings are factored back into the capital gains. Thus rebalancing the ATO's books, then 2nd owner comes along and does the same thing,etc, etc. So each time the depreciations from the previous owner should have no bearing on the current owner.

If a house was purchased for $100k with $50k land and $50k building and sold for $200k 10 years later, and...

If the building ($50k) was written down 2.5% each year, then in year 10, it would only have a value of $39,800.

This means the $200k sale price would be $39,800 for building and $160,200 for land.

So the next owner would have a depreciation schedule showing roughly $40,000 in write offs as opposed to the first owner who had $50,000 in write offs.

Of course that $10k in depreciation the first owner claimed would be factored back into their capital gain of $50k when the sold the house.

I believe that's how it works... Dale?

Michael G.
 
Last edited by a moderator:
Reply: 1.1
From: Jacque Parker


Yes, I agree with Michael about getting your own quantity surveyor. The fee they charge well and truly covers the returns you will receive come tax time. They don't take long, write up a professional report that is more readily accepted by accountants and the ATO. Cheers, Jacque :)
 
Last edited by a moderator:
W

WebBoard

Guest
Reply: 1.1.1
From: Mojo Jojo


Thanks for the clarification. I always planned on getting a QS but as I said someone told me that if the previous owners had depreciated things then there probably wouldn't be anything left for me to depreciate. I'll get on to getting a QS.

thanks
 
Last edited by a moderator:
Reply: 1.1.2
From: Dale Gatherum-Goss


Hi Michael!

Yes, I believe that you are right. I'd ask if you want a job, but, who in their right mind would want to work as an accountant if they could do what you're doing!!!!

Have fun

Dale
 
Last edited by a moderator:
Top