i’ve not read steve’s book,

but I disagree with not claiming depreciation because of the time value of money….the taxation of inflation. $100,000 now is worth much less than after 10,20,30 years. Even if you had to sell and pay CGT, you are give increase cashflow now, in the present.

Also I follow the principle when I buy a good asset that’s producing a good cashflow, the time to sell the asset is never. Warren Buffet works by this principle.

Alf

Div 43 is when you claim building depreciation
Div 40 is when you claim furniture

eg. You paid $100,000 for property
u sell for $150,000
Div 43 – u claim $10,000 of building depreciation
Div 40 – u claim $5,000 of fixture and fittings

When u sell, u have to do balancing adjustment of div 40 – lets assume its $3000

You assessable CGT is $50,000 + $10,000 + $3000
total is $63,000
50% discount $31,500 (assuming ur on 48.5% tax)
your tax is $15,277

now there are also other implications like GST,
if you are liable for GST, then u will have to pay $13,636 GST on the sale.

so like i said depending on your circumstances, if GST is applicable then your total tax will be
$28,913 (sux huh)

but most people will not have to pay GST, but depends on your situation

if your accountant does’nt tell u this, get a new accountant.
My charter accountant did’nt know about this, I had to learn it myself. I now have a new accountant who still does’nt know about this, I have to tell him what to do! go figure?

You can only claim the book if you already have an investment property
you cannot claim it if u use it to buy an IP

Alf,

that’s the simplified version
but there are so many variables
need to know what your situation is
what entity did you use to buy this asset

M1in12

can you tell me where i can find this information please cause it looks like the information i have may be erroneous

thanks

Westan

ru sure?

I spoke to this tax lawyer and he told me a change in trustees will trigger a CGT event. The trustee is the owners of the asset and held in trust for the trust. If you change trustees, the ato will require a re-evaluation of the trust assets and wack a CGT on that?

that’s what I’ve been told anyway

I’ll have to look this up now

I managed to find 2 in sydney, but it was not easy though

If you change trustees, you will trigger a CGT event, I think its E1 or something like that
Also there will also be stamp duty issue on change of trustee
ergo you have to decide now before who will become the trustee.

y

buying things in your own name could be parlous

u should be concerned about litigation and tax consequences

look at the structure that suits u

unfortunately in this complex society we live in, buying assets in your own name is parlous