Hello all
I have been trying to persuade my nephew to get a depreciation schedule done for the reno he has just done on his IP. ca$70K.
This is the answer I got from him.
“Re getting a depreciation schedule. The ATO has a pretty comprehensive list of items and how they can be treated with respect to deprecation ie listing different items and the life over which the ATO allows them to be deprecated. Why would I pay anyone to give info that is freely available on the ATO’s website?
My property is built in the 1960s basically it is too old to deprecate but the improvements made to property plus whitegoods, furniture electrical items etc can all be depreciated as per the ATO’s schedule (even the borrowing costs like loan insurance etc)â€
When I renovated a commercial IP some years ago my accountant advised me to get a dep.sch. which I did and his comment afterwords was that it was worth every penny it cost. This argument has had no effect on him.
I know that there are experts on this forum in this area. Can you please give me an answer I can use to persuade him. [blink]
Thanks in advance
ElkaYou can do your tax return over the web as well..my prefernce is to use an accountant used to dealing with property investors and possibly an invetsor himself ;o)
“Money is a currency, like electricity and it requires momentum to make it Effective”
Online Positive Cashflow and Renovating CalculatorsThanks Redwing. He has an accountant as well so I hope the guy knows what he is doing and will recommend a schedule.
Cheers
ElkaProbably not the answer you want to hear – but if he is very well informed and has access to the right info he can probably do it himself.
I wouldn’t though…
I reckon it was $600 well spent and my last one was for a house built in 1960 with minor renovations done since.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
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0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks Simon. I guess then the next thing I should ask him is what his time is worth. I assume it’s a time consuming job if your doing it for the first time.
After that I shall just drop the subject.
Thanks [smiling]
ElkaHi Elka
To a certain degree your nephew is correct.
The ATO has released a pretty comprehensive list of what is plant and what is capital.
Why people would use a QS in the situation would include…
A. Well most firms would give you a year by year breakdown and an analysis of prime cost vs. Diminishing Value.
B. Would be able to determine/maximise any individual plant items effective life – pool them or write them off if applicable.
C. Depending upon the level of detailed furnished – be able to classify some work as repair and thus write off.
D. Having a third party prepare this type of work surely has impartiality advantages!
E. Enhancing the individual attached to the plant and equipment. Will your nephew simply start the value of the plant item @ $800 (Cost of harvey norman ) all will he be able to work this item up to $1250 or so?
E – worth the price alone.
and the fee maybe less if no inspection is required.
Regards
Tyron Hyde
http://www.washingtonbrown.com.auThanks Tyron. I will pass this on. Good point E.
Cheers [smiling]
Elka
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