To expense or to Amortize?

[agent007]

Hi there,

Hope any of you have the answer to my question:

I have over $6k in document expenses (surveyor and Council fees) due to a subdivision. I'm doing my tax declaration and hence the question- Do I expense them in the fiscal year they were incurred or do I amortize them over a period of years? If the latest then, for how many years?

Thank you!

 

[Mry]

What makes you think you can amortize or expense cost base expenditure?

 

[Aaron_C]

Neither. It's added to cost base when you sell the properties.

 

[coastymike]

Could be a property developer and what constitutes trading stock changes. See Kurts developments case as to what is added to trading stock and what is expensed if thismis on revenue account

 

[Terryw]

Maybe 007 is a developer?

 

[coastymike]

How strange terry. Looking at the time stamps we were thinking the same thing at the same time.

 

[Terryw]

great minds think alike?

 

[Mry]

If he was a property developer, he would have already performed this activity several times and known the answer from those. So I assumed this was a once off.

 

[agent007]

Neither. It's added to cost base when you sell the properties.

Thank you all for your input!

 

[coastymike]

Mry

Could be a first time development or a myer type situation 'profit from an isolated transaction'

 

[Rob G.]

Mry

Could be a first time development or a myer type situation 'profit from an isolated transaction'

If not of a commercial flavour, then it could be a profit making scheme for which it is on the capital account with respect to land development.

There is of course the spectre of being an enterprise for GST (this does not always align with income tax law), or dealing in new land.

Cheers,

Rob

 

[coastymike]

Agreed Rob. Whatever happened to making things simpler.

 

[Rob G.]

Agreed Rob. Whatever happened to making things simpler.

I love every time a new government gets elected.

They always start with a promise to simplify the tax laws.

Newspaper headlines state most tax advisors/agents will be out of work.

Cheers,

Rob