Hey,
I also have a few questions for the property savvy accountants on this forum:
1. I settled on a property (purchased by the trustee of a HDT) in Aug 2007. Immediately after settlement, the seller rented from me for a month whilst she looked a place to move into. After she moved out, I renovated the house - painted the entire house, put in new freestanding wardrobes, put in new carpet, polished the floorboard, replaced all lights, replaced all taps, replaced all door handles. The renovation took 3 weeks, and immediately after the renovation, the house was rented out to a tenant on a 12 months lease. Can I claim the renovation cost in FY08 tax return? or does the cost have to be added to the cost base?
2. Are the tools (electric sander, drill, screw driver, etc), equipment (paint brushes, etc) and building materials (nails, wood, plaster, paint, etc) used in the renovation deductible in FY08? All of these items are less than $300 each, but the total amount tallies to a few thousand dollars.
3. Over the last few months, I have been using my credit card to pay for the materials, tools, equipment, and tradies when we were renovating the investment property that is owned by the Trust. I don't have a bank account or a credit card in the name of the Trustee. However, I have kept all the receipts. Some receipts have my name on them, and some don't have any names on them. I am wondering if I would get in trouble with the ATO if they ask for substantiation of these expenses? Do I need to open up a bank account or credit card in the name of the Trustee to show that the expenses are incurred by the trustee?
4. For items that fall under Division 43 (eg, door handles), do they have to be depreciated at 2.5% regardless of their cost. ie, if the item costs less than $300, or greater than or equal to $300, they would still be depreciated at 2.5% regardless of their cost ?
5. Does the $300 limit for Division 40 items apply to EACH property or ALL properties. EG, this financial year, Light shades are purchased for two IPs. $150 of shades purchased for property 1 and $250 for property 2. Am I able to claim $150 for property 1, and $250 for property 2 at the end of the financial year? or do I have to depreciate the total amount ($400) over a number of years?
6. Is painting an investment property (AFTER being tenanted) considered a capital cost or maintenance? I should add that I am only painting walls that need to be painted, and I am not painting the entire house.
7. The trust and company trustee was set up in Aug 2006. No income was earned and no expense was incurred (except in the cost of setting it up) during the FY07. Is a Tax return required to be lodged for the trust in FY07?
8. Lastly, I have another IP which was brand new at settlement (Oct 2002). I got a depreciation schedule done by a Quantity surveyor in 2002. They only provided a schedule up to FY 2007. Hence, I got another depreciation schedule done by a different quantity surveyor in Aug 2007, but the latter schedule provided much less depreciation amounts. Are we able to use the first depreciation schedule and extrapolate the depreciation figures for future years ?
Cheers,
PM
I also have a few questions for the property savvy accountants on this forum:
1. I settled on a property (purchased by the trustee of a HDT) in Aug 2007. Immediately after settlement, the seller rented from me for a month whilst she looked a place to move into. After she moved out, I renovated the house - painted the entire house, put in new freestanding wardrobes, put in new carpet, polished the floorboard, replaced all lights, replaced all taps, replaced all door handles. The renovation took 3 weeks, and immediately after the renovation, the house was rented out to a tenant on a 12 months lease. Can I claim the renovation cost in FY08 tax return? or does the cost have to be added to the cost base?
2. Are the tools (electric sander, drill, screw driver, etc), equipment (paint brushes, etc) and building materials (nails, wood, plaster, paint, etc) used in the renovation deductible in FY08? All of these items are less than $300 each, but the total amount tallies to a few thousand dollars.
3. Over the last few months, I have been using my credit card to pay for the materials, tools, equipment, and tradies when we were renovating the investment property that is owned by the Trust. I don't have a bank account or a credit card in the name of the Trustee. However, I have kept all the receipts. Some receipts have my name on them, and some don't have any names on them. I am wondering if I would get in trouble with the ATO if they ask for substantiation of these expenses? Do I need to open up a bank account or credit card in the name of the Trustee to show that the expenses are incurred by the trustee?
4. For items that fall under Division 43 (eg, door handles), do they have to be depreciated at 2.5% regardless of their cost. ie, if the item costs less than $300, or greater than or equal to $300, they would still be depreciated at 2.5% regardless of their cost ?
5. Does the $300 limit for Division 40 items apply to EACH property or ALL properties. EG, this financial year, Light shades are purchased for two IPs. $150 of shades purchased for property 1 and $250 for property 2. Am I able to claim $150 for property 1, and $250 for property 2 at the end of the financial year? or do I have to depreciate the total amount ($400) over a number of years?
6. Is painting an investment property (AFTER being tenanted) considered a capital cost or maintenance? I should add that I am only painting walls that need to be painted, and I am not painting the entire house.
7. The trust and company trustee was set up in Aug 2006. No income was earned and no expense was incurred (except in the cost of setting it up) during the FY07. Is a Tax return required to be lodged for the trust in FY07?
8. Lastly, I have another IP which was brand new at settlement (Oct 2002). I got a depreciation schedule done by a Quantity surveyor in 2002. They only provided a schedule up to FY 2007. Hence, I got another depreciation schedule done by a different quantity surveyor in Aug 2007, but the latter schedule provided much less depreciation amounts. Are we able to use the first depreciation schedule and extrapolate the depreciation figures for future years ?
Cheers,
PM
