Forum Replies Created
Hi GTD
Your more than likely right, we checked with our attorney (the property is in the US) last night and he said the same.
But we still have to have him or our PM front up to the beak.
I guess its not a big thing but just something that haas to be dealt with….
Tony
Hi Doc
Yep up for deductible, (excess).
The story continues. Just got a writ from neighbour suing us for damage to the fence….
Tony
Hi KP
The best way to get some certainty in these types of tax arrangements is to get a private ruling from the ATO prior to entering the transaction.
Otherwise, when clients ask me for watertight quarantees. I let them know, “if the ATO take a dim view then you only thing you have to rely on is an argument. And thats all it is, an argument”.
Regards
TonyHi Frank
By the sounds of it the property is unable to be sold GST (for whatever reason)and you have the timing issue of the short fall.
Whatever you do suggest you settle on the last day of your bas and claim back asap to reduce the time you are out of pocket.
You could put it on your creditcard….
Regards
TonyHi Antonio
Take care with distributions to non residents as the amount of withholding tax depends on
1) the type of income distributed (ie interest/dividends) and
2)the beneficiaries (tax) residencyAlso, don’t forget imputation credits are wasted on non resident beneficiaries.
Regards
TonyHi Frank
Is it “legal”? Yes this is normal practice as is you paying for the val. One solution is to register for GST.
You still have the problem of funding the the GST to the vendor on settlement (even though you will claim it back in your next BAS). There possible solutions for this but you haven given enough detail in your question, such as why it is subject to gst in the first place (assuming the vendor is registered).
tony
Hi Carl
Thats why they are called hybrids. You might think they should act like that but they can act in a different way. Sound too good to be true? Time will tell, but to have a better argument with the ATO if they come knocking on your door down the track it would pay to get a private ruling from ATObefore entering the transaction.
Regards
Tony
cal
Residential IP’s are input taxed ie you can’t claim GST on a purchase.
Commercial IP’s different story and you can claim.
Regards
tonyHi Rick
How was texas? Did you get wet?
Regards
Tony
Hi Carl
Common trap for young player, as the interest at your personal level is not deductible.
Look at a HDT to overcome.
Regards
TonyChatel mortagages have been around for years, they have become more relevant in recent years for taxpayers registered for GST on a cash basis and who want to claim the full amount of GST back in the period of the purchase. Where as if they purchased using a commercial hire purchase the GST would be claimed over the term of the HP.
Use one for an IP purchase? There is no GST benefit to do so over a normal mortgage and the interest rate would probably be higher anyhow.
Regards
tonyHi Checker
I like to think that 90% of places are rented so the odds are in my favour + the places we have bought are in good neighbourhoods close to all the things that make up a community. No different to the properties we own here.
Regards
Tony
Originally posted by SteveMcKnight:The biggest issue to solve is finance.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Hi Steve
Look forward to your reading your article.
To bring in a partner, they have to add something to your MO or why bother?
With the US in the dark ages compared to us with finance + our issue of being “aliens”, we have thought of bringing in a US based family member to solve the x coll and high upfronts on finance. Of course they have to be like minded…
I guess the alternative is to take the time to build the FICO but of course we are all looking for the fastest route….
Regards
Tony YoungHi
For us starting out, which wasn’t that long ago, with 3 boys under the age of 5 it was tough. But with a united determination of “why” we investing we were able to push through the long distance drives and overnights away from home, (a small tip an in car DVD helps and motels that have pool do too!).
We realised to really make it we had to endure some pain. Most recently for us that pain was being apart from our boys while investing in the USA for 2 weeks. Next month we are going back again to the USA for 3 weeks investing but this time we have decided to take the kids, (the pain this time being the cost, and a 14hr non stop Pacific flight ….but it will be worth it)
If you know why you are doing it you can make it happen.
Regards
Tony
Hi Andrew
There is no doubt the US has so many great +V CF opportunities. The same fundamentals that apply here apply there.
However, there are many more issues to deal with than investing here or in the 7th State (NZ). Things like getting you team right. For us the PM has been a challenge. We met with a number of recommended PM’s and none seemed to suit. None were aware of the withholding tax issues on rent for non resident aliens. Reasonable upfront cost on financing has and will be a continuing challenge. The call I had from the ATO last week asking me to explain our USD transfers from Aust to the US added an unexpected twist as well (seems the ATO are flagging property investors on AUSTRAC – talk about real time auditing, so get your structure right)
Check the “buying in the US” thread on somersoft. There are a few red herrings in it but on the whole this is a great start to know what your could be getting yourself into.
Regards
Tony
Hi Brad
Sorry to hear things didn’t work out…
1) quick, tax free, move on with your life,
2) you may (?)make more money, CGT issues and a multitude of other potential issues that can cost you time money and angst….
What would I do? Sell.
Good luck
TonyBardon
Your spot on.
If you require the USA income in aust. (as we do as we have some AUD borrowings to fund the purchases in the USA) then the C Corp will result in double taxation, an effective rate of around 60%.
Even if you don’t require the income in Aust now, you will have to bring it back one day with the same result….
Other then that PM me and I can give you the details of the tax advisers we use both here and in the US.
Regards
TonyHi Adam
do you mean the income units that were issued to enable deductablity of interest at an individual unit holder level?
If yes, then you have the HDT redeem when you are +ve geard to allow the trustee to redirect the income to a beneficiary with the lowest marginal tax rate otherwise why redeem them as you lose your interest deductibility? Does this make sense?
Regards
Tony
