I recently paid for a couple of depreciation reports on my US properties by a quantity surveyor as required for ATO and was happy with the result. If you'd like more information PM me.
Cheers David
David – curious to know (here in the forum's fine, so everyone can benefit) – how long can you claim depreciation post-purchase in the US, and what effect, percent-wise, did this have on your bottom line tax payable? Thanks for sharing!
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
Hi Ziv,
That’s a good question. I’m not going to provide tax advice, but for my older homes, the quantity surveyor (QS) has depreciated most of the renovations done prior to purchase (they have an effective life) of around five years depending on whether you choose prime cost or diminishing value methodology. Then there is a small amount of building allowance over 40 years. The value of the depreciation percentage wise will be the QS estimate of whatever was spent on renovations.
The depreciation expense means I won’t have to pay much tax on the cash flow positive returns until the depreciation and interest expense run out in the five year term. So I went from paying net tax to not paying tax for a few years. I am claiming back some of the tax I paid last year by giving the ATO an amendment for the depreciation expense.
For new homes the depreciation expense would be much higher – same methodology as Australian homes.
For the IRS (US tax), you don’t have to pay a QS for a report and the depreciation for me is a higher amount over 27.5 years. Under the double taxation agreement you can claim the IRS tax back from the ATO.
Regards David
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