Tax Office Targets

Hi Guys,

Recieved this in my Email and thought, this might be something important to share.

Each year the tax office targets tax payers who are making claims in particular areas. For the third year in a row property investors are once again the target. The three main areas for review this year will be:

Depreciation – Claims for construction or fitting and fixtures depreciation must be backed up with firm evidence. Assumptions on value made by investors has never been an acceptable method for calculating depreciation, and where original receipts for assets do not exist the only acceptable evidence is a quantity surveyor’s report.

Legal Expenses – Most of the legal expenses incurred in settling your new property may only be claimed as a capital expense. This means that you may not make a claim as a deduction against income, but you can make a claim against profit upon sale, which will reduce the capital gains tax payable. This year the tax office is targeting those investors attempting to claim these costs against income. See the new book, ‘The Pocket Guide for Investing in Positive Cash Flow Property’ for a list of these items.

Travel Expenses – How many times have I heard a property marketer sell property based on the investors ability to have a ‘tax paid’ holiday twice a year to inspect it! Firstly, it is not ‘tax paid’, it is tax deductible (very different, especially if you are in the 17% tax bracket) and secondly, it is not even tax deductible! To claim travel expenses on a trip to inspect a property you would have to do only that – inspect the property. The moment you do something else while on that trip, the purpose for the trip changes and so does you ability to claim a tax deduction. So, if you fly in, go to the property and inspect it and then fly out again, you may have a claim. If you stay overnight, you may also have a claim but only if you can prove that there were no return flights out that day. If you do anything else while you are there, the most you will be able to claim will be the return taxi fare from the airport and possibly one nights accommodation.

Cheers,
sis

so why is it… that the tax office likes to target property investors… [!]

People 4get that by saving just $3 a day & investing it sensibly
over a working life, you’ll end up with around $1 million