Repairs on New Property - a few questions

Hi all,

Looked through a few threads but couldnt find the answer I need.

Situation: I do my own tax returns. I have a 2 story Townhouse IP 2 years old - QS depreciation report done when new (bought house on completion). Property has floating floorboards downstairs and carpet in staircase, upstairs foyer and all bedrooms.
Tenant damaged carpet upstairs in foyer by dropping an iron- carpet is discontinued, therefore whole carpet should to be replaced otherwise will look tacky - will cost a fair bit and tenant will not pay 100% to replace (dont expect them to).

Scenario 1: To save on costs I was thinking of getting floating floor boards (matching downstairs) to replace carpet in staircase and foyer and leave carpets in bedrooms.
Q1 - can i depreciate floating floorboards over its life span -if so, can i work out the depreciation using ATO methods or do I legally need to get a QS to do a report just on the new section of the floating floorboards.
Q2. Can i continue to depreciate the whole carpet (as I would have done if not damaged) for the remaining 8 years of life or do i NEED to "write off" section that was replaced and continue depreciating the remainder (or do i have a choice either way?). For my own simplicity i would rather continue depreciating the whole carpet over time as if the carpet was not damaged.
Q3. My QS report just states Carpet and the total cost. If i MUST "write off" the portion being replaced by floorboards (approx 1/4 of carpet in house) am i just able to 1/4 the total cost of carpet and "write off" its remaining life (8 years) while continuing to depreciate the remaining 3/4's over the next 8 tax years?

I obviously want to do my tax return correctly - any help is appreciated. Im sure other people have been in a similar situation.

By the way unfortunately i cant claim insurance because AAMI does not do accidental damage. I will be looking for new insurers that do for any future tenant accidents.
 
Most but not all insurers offer an accidental damage option for extra $. Pays to read coverage and shop around. We took it out thank God. I chipped our ceasarstone bench in kitchen. (Its bloody hard stuff I really smacked it hard with a bowl) Tiling also affected. Major job and major $$. My cost $450 excess. Lifetime max no claim - sweet.
LL insurance might be better suited to that sort of claim.

Q1 Depreciation based on actual cost - Easy
Q2 Yes write off and claim a "balancing adjustment" for the balance of its value.
Q3 - Apportionment would be reasonable. Work out sq mt and apportion that way.

Not sure I would leave carpet in beds but timber in halls. Might look bad and you cant come back and match it later. Joins etc will be all wrong. Timber all through will look better to a tenant and for resale. Low allergy. Maybe a reason to up rent too. Keep many spare boxes to repair tenant damage too. ie water, scratches etc.
 
Thanks for your reply. I have signed up to another insurre offering accidental damage for any future damage to the property by tenants.

re: Q1 - I'm glad i can use the formula myself to depreciate
Q2 - So i need to write off the remaining value - damn
Q3 - Great - im glad i can estimate % replaced.

I'm trying to work out the cheapest upfront option due to low cash reserves at present.
 
The diminishing value method gives you the greater upfront deduction.

Re question 2 write off the balance means claim the remaining balance less any cash you received for it (nil if you binned it).
So you can possibly claim the balance of the assets written down value = great!
 
Tip - You cannot change depreciation methods. So if you used prime cost previously Speary's tip wont help you. However a revised QS report may assist.
 
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