All Topics / Help Needed! / Personal Tax + IP LOSE + Depreciation calculation methods. Am I correct calculating this way?

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  • Profile photo of housegoodieshousegoodies
    Member
    @housegoodies
    Join Date: 2010
    Post Count: 28
    July 12, 2010 - 5:04 pm

    Hi, in general, say if I earn $60000 before tax and if my IP lost is $7000 per year (lose from IP due to higher interests and bills)  + special building write off say $3500 per year + depreciation allowance on materials and plants say $4000 per year.

    Using the formula above, this that mean I only pay tax on:

    $60000 gross income – $7000 (lose from IP due to higher interests and bills) – $3500 (building write off) – $4000 depreciation allowance = Total Taxable gross income of $45500?

    Is the above method correct? If not, what is the correct method of calculating?

    Thanks Heaps

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    July 12, 2010 - 9:56 pm

    Yes in essence the calculation is correct.

    Of course gross rent needs to be added to the PAYG income and interest deducted but the figures will be the same.

    Richard Taylor | Australia's leading private lender

    Profile photo of ducksterduckster
    Participant
    @duckster
    Join Date: 2004
    Post Count: 1,674
    July 13, 2010 - 4:02 am
    housegoodies wrote:
    Hi, in general, say if I earn $60000 before tax and if my IP lost is $7000 per year (lose from IP due to higher interests and bills)  + special building write off say $3500 per year + depreciation allowance on materials and plants say $4000 per year.

    Using the formula above, this that mean I only pay tax on:

    $60000 gross income – $7000 (lose from IP due to higher interests and bills) – $3500 (building write off) – $4000 depreciation allowance = Total Taxable gross income of $45500?

    Is the above method correct? If not, what is the correct method of calculating?

    Thanks Heaps

    New taxable income = $60,000 gross income + (rental income – $7000 -3500 -4000)
    if rental income -$7000 -3500 – 4000 equals a negative figure it is a net property loss that is subtracted from gross wage
    if rental income -$7000-3500 – 4000 equals a positive figure is is a net property income that is added to gross wage

    on the tax return form there is a place labelled as net property loss / income

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