Tax Deductions on Steve’s Seminars

There are no deductions for those who do not pay tax.

Robert Bou-Hamdan
Mortgage Adviser

http://www.mortgagepackaging.com.au

Investor Links

This is a HUGELY grey area.

The ATO will allow deductions to a seminar if you can prove (a) you are in the BUSINESS of property (will come back to this), and (b) there is a direct nexus between the content of the seminar and your property business (ie if the seminar was about wraps and you were not currently involved in a wrap, then you would not be able to claim the cost of the seminar…)

Back to point (a).

In the past, the ATO gave taxpayers a little more leeway to claim investment related expenses due to the fact that there were both (a) far fewer property investors, and (b) far LESS spruikers to provide said seminars. In recent years this has changed… and, as to be expected with the ATO, there is no hard and fast rule:

In IT2423, the ruling is that anyone with less than 3 investment properties can NOT be in the business of property… but in Cripps V Federal Commissioner of Taxation 1999 AATA 937 the ruling was that, although the Cripps’ owned 14 investment properties, they were not actually IN THE BUSINESS OF INVESTMENT PROPERTY because they had an agent manage the properties.

To my mind, this is ludicrous – one could argue that, as business owners reach a point where the turnover of their entity is such that a manager is required to look after it, so too do property investors hire an agent to look after their holdings once they reach a certain threshold.

Apparently, such is the wording of the legislation that you can own 20 investment properties and NOT be in the business of letting them if a property manager is working for you, but you can own 5 investment properties and manage them yourself, and therefore be in the business of letting property…

So, to sum up a long winded and somewhat meandering post [jealous], it is VERY unlikely a deduction will be allowed for seminar attendance, despite what the seminar holders might tell you – your best bet is to seek the advice of an accountant well versed in property investment.

Jay.

Note the above is personal opinion and not accounting advice, as I am not an accountant.

Hi Rob,

I understood what you meant [hair2]

Although, being a student doesnt preclude you from owning property, being gainfully employed or paying tax – as a student I owned property, had a job, paid tax on my wage, sold a property, and paid CGT.

Jay.