i have just purchased a comercial property under my familiy trust, as i can not claim depreciation because it would place the income into negative, could i claim depreciation from the capital gain when the property is sold ?
Felish
I don’t quite understand… Depreciation is a matter of assets reducing in value due to fair wear and tear. To my knowledge it isn’t related to the income they may or may not produce.
For example:
Carpet laid in an investment property is depreciated over (I think) 10 years. That is to say that at the end of 10 years the carpet no longer holds commercial value and needs to be replaced to maintain value. Thus each year you can claim 10% of the value of the carpet as depreciation and this in turn reduces your taxable income (even below $0). The assumption is that you will need to pay the full replacement cost at the end of 10 years to put in new carpet.You can carry tax losses over from one year to the next. Depending on your exact set up I believe you can also carry your trust loss over to your own income, though this is something a tax accountant / lawyer would need to be involved in.
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