If something is purchased (eg carpet) on an agc interest free term,so it offically hasnt been paid for yet,but is being used,can depreciation & any other costs associated with the carpet,be claimed that year??[confused2]
I don’t see why not, but I’ll need to confirm. If you’ve entered into a contract to pay, taken delivery of something, and installed it in a property, you should be able to depreciate it. There’s a logic to this. Having said that, ATO logic isn’t sometimes different from yours or mine. Can you send me a PM and remind me to check on this one?
ScottL.O.L. [biggrin] Sorry if i;m reminding you of this horrid time of year.But i hope my many qu’s also help others with ideas,too.Also,it’s a hell of alot cheaper to ask you guys than my accountant[biggrin].
The reason i’m askn about the interest free carpet,is b/c i have a tenant who is getting cheap rent b/c there’s no flooring yet,but i feel terrible that it must be very cold for them.So,i;m just looking at my options for pay it now,when funds i have avail were to be used on s/thing else.
I figure if it’s paid off b4 interest kicks in, i’m on a winning idea![biggrin]A deduction is available for the decline in value of a ”depreciating asset’ that is held by the taxpayer at any time during the year. The deduction is reduced to reflect the extent to which the asset was used during the income year for a purpose other than a ”taxable purpose” (eg private or domestic purposes or to produce exempt income) under the (ITAA97 sec 40-25)
The question is whether the asset is installed and ready for used in producing assessable income. In your case the carpet is installed and ready for use. The fact that you have an interest free loan over the carpet is not the determining factor for tax purposes.
You will be able to claim a depreciation deduction from the date the carpet installation was completed.
Be careful with interest free periods, particularly AGC. Just make sure you repay the entire amount of the loan before the inetrest free period expires otherwise an interest rate of around 20-30% will apply and it is BACKDATED to the date of the original transaction. NASTY !!
Misty1
its not intertest free believe me i’ve worked in thr=ese areas.
The credit charge is built in to the purchase price.
If you offer cash you should get a 5 – 10% discount.
rgds
Cobrathanx for responses.I’m learning![grad]
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