All Topics / Help Needed! / What kind of claim a HWC?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of Matt KennyMatt Kenny
    Member
    @matt-kenny
    Join Date: 2004
    Post Count: 41
    July 31, 2004 - 9:44 am

    Our IP has a very old and now leaky HWC, it also runs very hot and chews through the power. We are about to bite the bullet and replace it.

    What category does a HWC fit for tax purposes? Is it a capital expense? Or can it be claimed as a replacement/repair because of the condition of the old one?

    Thanks

    Mstt

    Profile photo of TeacherK6TeacherK6
    Member
    @teacherk6
    Join Date: 2003
    Post Count: 164
    August 1, 2004 - 4:54 am

    Ok ill giv it a shot,

    As far as i knew, A HWC (Hot Water System)??? is not a capital expense, however what its classed as may be changed depending on the time is replaced.

    eg, if u buy a place, and the system was on the way out, and u knew that this was the case, and u wanted to change it b4 it was rented, then the cost would be added to the purchase cost and not claimable as an expense…

    however, if the place was rented, with the system working, and u needed to change it after several months, then it would be classed as a repair that is tax deductable over several years. that is if its over $300. if its less then u may be able to claim it in one hit.

    This is going off the top of my head with no looking up, thus the vagueness of my reply.

    Jason :)

    Profile photo of westanwestan
    Member
    @westan
    Join Date: 2002
    Post Count: 1,950
    August 1, 2004 - 8:24 am

    Hi guys

    i’m under the impression that it is a capital expense that will be claimed as a depreciatable item over the years, i’m not an accountant but am prety sure i’m right.

    regards westan

    I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database

    Profile photo of Matt KennyMatt Kenny
    Member
    @matt-kenny
    Join Date: 2004
    Post Count: 41
    August 1, 2004 - 10:23 am

    Thanks guys.

    The HWC is very old but was in perfect working condition when we purchased the property. Since then it continues to work well but with low pressure and has also developed a leak.

    Certainly I’ll check with the account to clarify.

    Matt

    Profile photo of IbuycashflowIbuycashflow
    Participant
    @ibuycashflow
    Join Date: 2004
    Post Count: 274
    August 1, 2004 - 9:41 pm

    The question you have to ask is “can the existing system be repaired?” If it can and you replace it it is a capital expense which must be depreciated. If it can’t be repaired and you “up grade” the system it is also a capital expense.

    If it can’t be repaired and you replace it with the same you may get it through as repairs and maintenance but if you don’t claim it you won’t get it.

    Cheers
    Jeff

    Profile photo of thecrestthecrest
    Participant
    @thecrest
    Join Date: 2004
    Post Count: 992
    August 3, 2004 - 12:02 pm

    It would be very convenient if it ceased working and had to be replaced.
    cheers
    thecrest

    thecrest | Tony Neale - Statewide Motel Brokers
    http://www.statewidemotelbrokers.com.au
    Email Me | Phone Me

    selling motels in NSW

Viewing 6 posts - 1 through 6 (of 6 total)

You must be logged in to reply to this topic. If you don't have an account, you can register here.