Depreciation & Trusts

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

Alexia
Participant
@alexia
Join Date: 2011
Post Count: 28
September 28, 2011 - 10:53 pm
Hi All,
I have a question in regards to claiming depreciation which is if you've claimed depreciation on a property for so many years – what happens when you go to sell the property? Does the depreciation get added back onto the sale price?
Also is it worth claiming depreciation through a trust? Reason why I ask is if the trust is making a profit this will only reduce your profits at the end of the day or maybe turn your profit into a loss.
Claiming it when the property is under your own name is fine because then your getting the tax breaks but under a trust or company it's different.
Alexia
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
September 29, 2011 - 10:33 am
Alexia
Why is it different under a company or a trust? Your company or trust would also want to reduce taxable income wouldn't it? Otherwise you would end up paying more tax.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Alexia
Participant
@alexia
Join Date: 2011
Post Count: 28
September 30, 2011 - 1:58 am
Hi Terry,
Thanks for your response.
Lets say it’s a family trust and it’s making so much profit per year but not huge amount. By claiming depreciation it would turn your profit into a loss. I understand when your trust is making large profits it would be worth claiming it then.
Terry, what happens with all the depreciation you have claimed when you sell the property?
Alexia
luke86
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@luke86
Join Date: 2010
Post Count: 470
September 30, 2011 - 2:34 am
From my understanding the depreciation gets deducted from your cost base when it comes to calulating capital gains tax.
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
September 30, 2011 - 3:12 am
Thats my understanding too. My trusts have sold many properties but I must say I am not sure exactly how it works.
Alexia
What if your trust paid $1000 for insurance. Would you claim this if it would result in a loss?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Alexia
Participant
@alexia
Join Date: 2011
Post Count: 28
September 30, 2011 - 6:13 am
Hi Guys,
Thank you for your comments.
I get where you coming from Terry.
Thanks
Alexia