Investment course & tax return

Hi All,

I did a property investment course in the financial year 2012/13. I didn't own any investment property during that FY.

I am going to buy an investment property this FY (2013/14).
Will I be able to claim the course in my tax return for the FY 2012/13 or the next FY 2013/14?

Thanks,
Michael
 
If you did the course in 2012/13 then you won't be able to claim it in 13/14. Generally you are only able to claim a portion of property investing courses, the portion that relates to how to maintain properties and increase rent, that sort of thing.

Anything related to buying the right property is unlikely to be deductible as it has no nexus (the ATO love that word!!) to the rental income you will be earning.

Hope that helps
 
Hi All,

I did a property investment course in the financial year 2012/13. I didn't own any investment property during that FY.

I am going to buy an investment property this FY (2013/14).
Will I be able to claim the course in my tax return for the FY 2012/13 or the next FY 2013/14?

Thanks,
Michael

Neither unfortunately. It doesn't relate to the production of income at the time of the course.
 
Course

And even if you do a course AFTER buying an IP.. s8-1 ITAA97 requires that the cost was incurred in production of assesable income or earning assessable income. There is a limb that excludes private and capital expenditure.

The ATO might consider the course is unrelated to that IP and was capital / private expenditure. So not deductible.

"It depends" would be my answer. For example if course considered which props to buy etc then its likely relates to a future IP not the one you bought. If course covered maintaining your IP its more likely to be deductible. The ATO take the view that if its unclear they will disallow and its your problem to argue on appeal.
 
So you should keep a copy of the course structure/timetable with your receipt?

Would entrance tickets to home shows (where you find out about renovations etc) be fully deductible if you already own an income producing property?
 
Hmmm, I would answer question 2 first. How does the cost become necessarily incurred in producing assessable income ? I will use an example...You attend a home show about renovations. Thats a capital expense. I would argue non-deductible if its about the reno. Sure reno = higher rents. But its too early to incur such costs. But if you attend the show to meet "Mr Depreciator" and seek his wisdom on merits of depreciation schedule and order one for a discounted price... Deductible. Its has to be less about what you may do in the future. That said seeking opinion on what changes you can make to enhance rents might be deductible.

Another example - You own a boat and its leased. Attending the boat show sounds like a private expense. There is possibly no nexus to income.

Its also like visiting your gold coast agent for a week and claiming 100% of travel....When you meet agent for 10mins and talk crap about how appalling the SE Qld market is at moment.

Second question - yes keep records. When taxpayers are audited the more crap you can send that supports your position makes it unlikely the desk jocket declines your deduction.

So you should keep a copy of the course structure/timetable with your receipt?

Would entrance tickets to home shows (where you find out about renovations etc) be fully deductible if you already own an income producing property?
 
Top