Bill,

I tell you what… send them to [email protected] we’ll put them up on the site and then give out your e-mail at the bottom (with a big juicy plug) so people can contact you.

I don’t like long posts with people leaving e-mail addresses. It’s an easy target for e-mail mine bots.

Cheers,

Steve McKnight

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Provided these CDs are free then no problems.

Pls confirm.

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

Check out their website http://www.personalinvestor.com.au/

Some of the articles are available for free!

Cheers,

Steve McKnight

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Hi,

I need to be quick…

The reason why I don’t believe in the tax deduction side of investing is that it justifies a valid reason for making a loss or having -ve cashflow.

As for depreciation – see my thoughts at: https://www.propertyinvesting.com/depreciation

Depreciation is tax deferral, not a tax saving.

Cheers,

Steve McKnight

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Hi,

My understanding is that the image was there after a modification to allow us to track people entering the site via google links.

As such, it is not advertising in nature – more reflective that we use their free technology. Kind of like the link to Snitz at the bottom of this forum.

Cheers,

Steve McKnight

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Alf,

Yes – I agree with you!

Building writeoff (now called capital works) comes off the cost base (ie. is not a balancing adjustment).

However, depreciation of fixtures and fittings does NOT come off the cost base. Instead, it is (usually) repaid if the property value appreciated rather than depreciated.

This point outlines the different tax treatment of the two types of depreciation deduction. See my earlier example to numerical clarification.

Cheers,

Steve McKnight

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Hi Alf,

Don’t quote me on this (IE. This is NOT advice), but my understanding was that:

1. Fixture and fittings depreciation is 100% repayable (ie. outside the 50% exemption).

2. The building writeoff came off the cost base of the asset, and as such was OK re: capital gains purposes.

Quick example…

A. $100,000 property bought (nett) 7/2001
B. Depreciation b/w 7/01 and 6/03:

Fixtures and Fittings: $10,000
Building writeoff: $3,000

C. Property sold for (nett) $150,000 in 6/03
D. Tax calc:

1. Carrying value of the property is $87,000 ($100,000 – $10,000 – $3,000).

2. Taxable profit on sale therefore $63,000 ($150 – $87,000).

3. Of this taxable profit:

$10,000 is a balancing adjustment as it represents recouped depreciation (fully taxed at the taxpayers applicable marginal income tax rate)

$53,000 is a capital gain, of which 50% would be exempt and 50% taxed at the taxpayers applicable marginal income tax rate.

Ie: amount to be included in the tax return:

Balancing charge: $10,000

Included because the asset appreciated, rather then depreciated!

The only way to get around this is to individually itemise on the sale agreement what you’re buying and pay more for the land and less (ie. book value) for the depreciated chattles.

and

Capital Gain: $ 26,500

Hope this is clear enough… this should definitely be discussed with a qualified tax adviser.

Further Study

Balancing adjustments:http://www.ato.gov.au/individuals/content.asp?doc=/content/31610.htm&page=5#P402_36398

Capital Works
http://www.ato.gov.au/individuals/content.asp?doc=/content/31610.htm&page=7#P585_51465

Items affecting an assets cost base
http://www.ato.gov.au/individuals/content.asp?doc=/content/31610.htm&page=7#P689_60350

Specifically For You

quote:

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Also if anyone knows if one claims say 2.5% building dep. on 100000 building cost.

[email protected]%=2500
30% tax rate=750

which figure does one use for the CGT the 2.5% or the 750 30% tax rate.

---

Your cost base would be reduced by $2,500.

quote:

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The other question i have is if one sells in the financial year and makes a profit is that profit added to the say wages taxable income so one pays the higher tax rate.
eg.
taxable income 48000
profit 90000
CGT………? 30% or at 48.5% for calculation
is the tax worked out at 48000 that is 30% for CGT purposes or the higher tax rate of 48.5%

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OK – I assume ‘profit’ here is CGT, yes?

If so, and it was an individual, then 50% of it would be exempt, so included in the tax return would be:

salary (?): $48,000
capital gain ($90k * 50%): $45,000
Taxable income: $93,000
Tax payable: $31,090 + medicare

Hope this has helped you understand the concept further.

Cheers,

Steve McKnight

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Hi,

Interesting post… let me know if you give it a go and whether or not it keeps that hungry ants away.

There is a termite association (no kidding – Australian Environmental Pest Managers Association)

quote:

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Australian Environmental Pest Managers Association Ltd represents professional pest managers and promotes the interests of the professional pest management industry.

---

Website: http://www.aepma.com.au/

Perhaps a call (1800 252 772) to these guys to see what they think might be worth it.

Cheers,

Steve McKnight

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Hi,

Here’s something perhaps out of left field… pls don’t take it personally []

I suggest that a large part of your problem seems to be that you wait until tax time to get all your reports together.

You’d be better served allocating an hour a month to keeping the records in order, perhaps on something like MYOB and the just running off summary sheets for tax purposes.

Sometimes electronic record keeping is more effort than the old yet simple paper trail anyway.

No matter how efficient the software, responsibility for using it and retaining control remains with the investor.

Anyway, just another angle to think about the issue, if appropriate.

Good luck!

Steve McKnight

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Hi,

Hmmmmm… I sense this is dangerous ground, but oh well.

The Bible is clear that you cannot serve two masters, and that you must choose between serving God and serving money.

Having said that, my understanding is that financial freedom is a great goal, provided that you keep God as the #1 priority.

It is certainly no sin to be rich, so long as you remain humble before God and mindful that it is He who blesses you.

This is a work in progress for me, and might actually one day turn into another book.

Clifford, if you want to get in touch, send an e-mail to [email protected]

Cheers,

Steve McKnight

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