taxation question

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From: David Corey


Can anyone help and answer me this.

I have three other I.Ps. I have placed a deposit on two more. I have not made settlement on either at this time (expected on 5th July 02, Next fiscal year. One of the houses is a reno with approx $25.000 to be done. I have a month off work and want to start the work now. I am sure that settlement will happen, so not worried about doing work for nothing if the vendor pulls out. Now the question, because I am already into I.Ps, can I claim my taxation deductions in relation to the reno, even though I have not made settlement on it.I consider I am already in the business so I can claim. Any one know?
David Corey
ALICE SPRINGS
 
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Reply: 1
From: Dale Gatherum-Goss


Hi David

Unfortunately, renovations are not tax deductible regardless of your situation.
The best result is that you can claim depreciation on the cost of the renovations.

Sorry

Dale
 
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Reply: 1.1
From: David Corey


Thanks for the answer Dale. I may not have explained that as well as I could have. I know I can only claim depreciation. But can I claim the portion of costs that I spend prior to settlement of the property. I.E would it mater if the property was not yet in my name.

David Corey
ALICE SPRINGS
 
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Reply: 1.1.1
From: Dale Gatherum-Goss


Hi David

Yes, you can. Your intention is to generate an income, if not a higher income, from that property and so it should not be a problem.

The only catch would be if there was an unreasonable delay between the costs incurred and the rental income. This might scare the tax office a little more.

Have fun

Dale
 
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