Tax Deduction on Un-baught investment property ?

[hpresident]

Hi Tax Gurus,

My understanding is cost associated with purchasing an investment property can be tax deducted, BUT what if the contract fall through at the end?

Situation:
Put a property under contract, paid solicitors to do the searches and building inspection, later pull out due to unsatisfactory building inspection. Could I then deduct my solicitor fees and inspection cost?

 

[Terry_w]

Hi Tax Gurus,

My understanding is cost associated with purchasing an investment property can be tax deducted, BUT what if the contract fall through at the end?

Situation:
Put a property under contract, paid solicitors to do the searches and building inspection, later pull out due to unsatisfactory building inspection. Could I then deduct my solicitor fees and inspection cost?

no connection to the production of incomes so I would say no.

 

[Paul@PFI]

Preliminary expenses incurred to find a IP - Never part of cost base and never deductible.
Preliminary expenses incurred to find an actual IP (good example is buyers agent) where successful - Part of coat base. Non-deductible. However personal travel etc is not. That's a private expense.

Unsuccessful acquisition is never deductible or a cost base issue. If you lose your deposit same applies since you never acquired a CGT asset there can be no CGT loss.