food

[mikezen]

Hi there
if I do a reno in a different state, for a newly acquired ip can I claim my food costs? I know I can claim travel etc

thanks heaps

 

[Aaron_C]

Hi there
if I do a reno in a different state, for a newly acquired ip can I claim my food costs? I know I can claim travel etc

thanks heaps

No......I wish.

 

[mikezen]

damn I say.....

 

[jrc]

It seems paradoxical if you can claim travel costs to do a reno on a newly acquired IP, yet if you stayed at home and got someone else to do the work, the cost would not be tax deductible but would probably be seen as initial repairs and form part of your cost base. Maybe you should check that your knowledge is correct.

 

[mikezen]

ill let my accountant sort it out next year, I just needed to know if I should keep my 500 MacDonald's receipts

 

[Aaron_C]

There has to be a nexus between the expense and the income producing activity. You would have eaten food regardless of whether you had an IP or not. It's not like you had to eat the food to renovate.

 

[geoffw]

As jrc suggests, even the travel might not be able to be claimed as a current expense, as it is improving the property, and forms part of the cost base when you sell. I had thought that you could claim travel only when repairing a property- to bring it back to a standard the same as when you had bought it.

ATO- Claiming repairs

There is nowhere that states you can claim food, even as part of the cost base or when repairing.

I don't know if there would be a different treatment if the property were being purchased through a trust- I'd be interested to know from the experts out there if the trust could send you to repair a property and reimburse travel expense- including a travel allowance.

 

[bbmick]

Assuming you're just the average property investor (not a business or developer etc), then I would see it as food not claimable, transport not claimable, the cost of reno's is added to the capital base - repairs are also treated same way - not expensed (as normally done).

 

[mikezen]

Thanks for the replies

 

[mikezen]

this guys saying I can claim food but I should of renod after I let it!

http://somersoft.com/forums/showthread.php?t=76489

available for rent [/I]and when it actually becomes income producing***

There are other threads along these lines, I just couldn't be buggered digging them out. Try searching When to Reno, Reno costs, Depreciation etc.

Ian

 

[Rob G.]

I am impressed that you are using selective forum posts instead of legislation, case law and ATO public documents.

You might want to read ATO tax ruling TR97/23 about improvements and initial repairs.

You might want to read up on Division 32 entertainment expenses as well.

But this will take a lot more time than a quick forum search.

 

[jrc]

I am impressed that you are using selective forum posts instead of legislation, case law and ATO public documents.

You might want to read ATO tax ruling TR97/23 about improvements and initial repairs.

You might want to read up on Division 32 entertainment expenses as well.

But this will take a lot more time than a quick forum search.

Next thing Rob you'll be like Dazz and suggest people need to read their leases, contracts etc and not guess and rely on the misinformation of others.

 

[mikezen]

I am impressed that you are using selective forum posts instead of legislation, case law and ATO public documents.

You might want to read ATO tax ruling TR97/23 about improvements and initial repairs.

You might want to read up on Division 32 entertainment expenses as well.

But this will take a lot more time than a quick forum search.

um well I believe that's what I pay my accountant for, and maybe I don't have time to bury my head in ato essays

 

[bbmick]

um well I believe that's what I pay my accountant for, and maybe I don't have time to bury my head in ato essays , unlike some people

You may pay them, but some accountants push the envelope too far & leave you holding the can if an audit from the ato happens.

If you truly still want to know, then a quick read here might throw some light on your questions (check out all the bullet points & you'll get the basic picture). It's not the full tax law but is put into easy language to understand, so it's not hard reading.

What I essentially get from it is that if you do these reno's up front, prior to renting out for the very first time - then you cannot claim travel etc as you are suggesting. However if you do the reno's after the first tenant, then it is possible to claim.

 

[Rob G.]

However if you do the reno's after the first tenant, then it is possible to claim.

Not if it is an improvement.

Not if it needed doing prior to renting but you delayed it hoping to disguise it as a repair after being tenanted.

That could be classed as tax evasion incurring penalties & interest with an unlimited time for the Commissioner to review your tax returns.

Rob

 

[Rob G.]

um well I believe that's what I pay my accountant for, and maybe I don't have time to bury my head in ato essays

I am giving you a free informed general opinion from your brief facts.

Feel free to ignore it and the resounding "no" you got from others in this thread and cherry pick other isolated posts that appear to disagree.

But make sure you check it with your accountant.

I am probably giving advice to your accountant anyway, since he is too busy taking your money to be bothered burying his head in "ATO essays"

Rob

 

[bbmick]

Not if it is an improvement.

Not if it needed doing prior to renting but you delayed it hoping to disguise it as a repair after being tenanted.

That could be classed as tax evasion incurring penalties & interest with an unlimited time for the Commissioner to review your tax returns.

Rob

oops......my bad.

Of course, I confused repairs with improvements

 

[Rob G.]

No worries.

Probably the biggest hurdle to finding your way around tax law is the jargon used to communicate with accountants and the ATO !

The best way to get value for money out of advice from an accountant is to clearly detail what you want to do rather than merely label an activity.

Cheers,

Rob

Rob