rent and losses

[granev]

hi all

my partner and i have bought 2 IPs together , for tax and other purposes , is there any set rule where we have to split half the rent and half the expenses / deductions 50/50 , or can one of us claim all the rent and the deductions , and the other nothing , even though the properties are in both our names.

thanks in advance

graham

 

[TheCamel]

I beleive you can assign a "portion" to a person.. but i don't know if you can do 100/0

you might be able to do 99/1

 

[MattR]

hi all

my partner and i have bought 2 IPs together , for tax and other purposes , is there any set rule where we have to split half the rent and half the expenses / deductions 50/50 , or can one of us claim all the rent and the deductions , and the other nothing , even though the properties are in both our names.

thanks in advance

graham

Basically for tax its as per the Title of the property when you bought it.

If Joint Tennants then 50/50 or if Tennants in Common, then whatever ratio that is when you bought the property.

 

[granev]

rent received

hi matt
was talking about rent received , as an owner , not a tennent.
basically , i want all of the rent to go to my partner and none to be counted on my net income. of couse by doing this , i know i cant make any deductions against my income

the reason being is that the CSA take into account all gross income on working out what you have to pay in child support , but they dont take any costs , deductions etc into account.

so given that we now get an extra $500 a week between us , do i cop $250 a week ($13,000 a year) and have to pay 27% of that on top of what i already pay , even though they are negativly geared and i am in effect making a loss at this early stage.

i am not trying to shirk child support , i already pay $15,000 a year , but i am trying to avoid paying any more ($3510 more) given the properties are running at a loss

 

[alexlee]

hi matt
was talking about rent received , as an owner , not a tennent.
basically , i want all of the rent to go to my partner and none to be counted on my net income. of couse by doing this , i know i cant make any deductions against my income

Matt's talking about ownership. 'Joint Tenants' and 'Tenants in common' are legal terms that define ownership.
Alex

 

[Mry]

That's why people with child support should salary sacrifice their loan repayments, rates etc so that the losses don't exist to be ignored.

 

[Apocalypse]

hi matt
was talking about rent received , as an owner , not a tennent.
basically , i want all of the rent to go to my partner and none to be counted on my net income. of couse by doing this , i know i cant make any deductions against my income

the reason being is that the CSA take into account all gross income on working out what you have to pay in child support , but they dont take any costs , deductions etc into account.

so given that we now get an extra $500 a week between us , do i cop $250 a week ($13,000 a year) and have to pay 27% of that on top of what i already pay , even though they are negativly geared and i am in effect making a loss at this early stage.

i am not trying to shirk child support , i already pay $15,000 a year , but i am trying to avoid paying any more ($3510 more) given the properties are running at a loss

CSA only add back on your total rental property loss...so if your share of income is 13000, and your share of expenses (interest, rates, etc etc) is, say, 16000, then CSA would add the difference back on to your TAXABLE income...

So the net effect is such that they are calculating it on the figure you would have if you had no IPs at all. So it shouldn't be "more". As Mry suggested, sal sac effectively "moves" the deductions to a different area of your income.

 

[granev]

thanks all for the replies

if you are right apocalypse i am not sure how this works
my taxable income was approx $600 less than last year according to my notice of assesment
the exempted income amount has gone up approx $600 according to the latest CSA notice
my fringe benifits are the same as last year
yet my child support income amount has gone up approx $2500 , and on friday when i was on the phone for over an hour between the tax office and the CSA , they told me the difference is because of rent received , and when i asked about deductions , the tax office said that the CSA dont take them into account , meaning i pay an exta $40 a month , which is neither here nor there , but these calculations are made on only 5 months income on one property , next year will be 12 months income on 2 properties , and like i said , if i was making a profit i can understand , but i am making a loss out of them , but i can see myself up for an extra $300 a month this time next year if i am calculating right

 

[letiha]

You can ask CSA to reasess the amount taking into the account the expenses for your property. You have to request this though.

 

[Apocalypse]

thanks all for the replies

if you are right apocalypse i am not sure how this works
my taxable income was approx $600 less than last year according to my notice of assesment
the exempted income amount has gone up approx $600 according to the latest CSA notice
my fringe benifits are the same as last year
yet my child support income amount has gone up approx $2500 , and on friday when i was on the phone for over an hour between the tax office and the CSA , they told me the difference is because of rent received , and when i asked about deductions , the tax office said that the CSA dont take them into account , meaning i pay an exta $40 a month , which is neither here nor there , but these calculations are made on only 5 months income on one property , next year will be 12 months income on 2 properties , and like i said , if i was making a profit i can understand , but i am making a loss out of them , but i can see myself up for an extra $300 a month this time next year if i am calculating right

My information is from here: http://www.csa.gov.au/guide/2_4_1.htm
Towards the bottom of the page under "Supplementary amount", it says (about IP income)

rental property loss - the amount by which the parent's allowable rental property deductions under the Income Tax Assessment Act exceed the parent's rental property income (sections 38A(4) and 45A(4)). This does not include rental income derived as part of a partnership.

I would suggest you write to the CSA. Phone calls oftwen aren't worth the paper they're written on.

 

[granev]

thanks so much for your trouble apocalypse you are a champ

and everyone else who replied , thank you