Backdating from depreciation schedule for tax return

Discussion in 'Accounting & Tax' started by dext1234, 12th Mar, 2020.

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  1. dext1234

    dext1234 New Member

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    So I bought a property in 2014. However, I only got a depreciation schedule done just recently. I asked the company doing the depreciation schedule to backdate it to the day I bought the property.

    I'm yet to finalise my 2018-2019 tax return. My understanding is that you can claim back 2 prior years on the depreciation.

    So does that mean I can claim the amounts that they listed for 2016-2017 and 2017-2018 in my 2018-2019 tax return as well?
     
  2. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    You need to consider the final date/s for amending the prior years tax. If they cant be amended the QS report is not correct and would be best to start from the relevant date where you CAN amend. eg This could be 1 July 2016 or 1 July 2017. The time limit is typically 2 years after the date of issue of the notice of assessment. In some cases its 4 years.

    No you cannot add the missed deductions into this year.

    You likely need to have the report corrected. The earliest date when you could actually claim deductiosn is wrong. You will miss deductions and also pay more CGT on sale than you should
     
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  3. Mike A

    Mike A Accountant Business Member

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    2 year amended period for most as Paul has mentioned. But surprising how many have a 4 year period (if you are the beneficiary of a trust then you will)
     
  4. thesuperman

    thesuperman Well-Known Member

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    Beneficiary of a trust have 4 years? I'm sure there's a trust deed somewhere out there which widely enough states that an unnamed beneficiary of that trust could potentially be anyone in Oz so I guess everyone could potentially have 4 years :D:D
     
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  5. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Maybe. Maybe not. The ATO won't allow a maybe.
     
  6. Mike A

    Mike A Accountant Business Member

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    The ato released a decision impact statement on this very issue

    Decision impact statements Decision impact statement Yazbek v Commissioner of Taxation (NSD 1471 of 2012 ) Link: Legal Database
     
  7. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    It often comes down to competent tax advice. A simple issue like a deceased person, a trust or even just a simple investment or a trust deed can switch things.
     
  8. dext1234

    dext1234 New Member

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    Ah ok, I see - thanks for that information.

    Looking at my account on mygov, it looks like I can still amend 2016-2017 and 2017-2018 tax returns.

    One thing I don't understand though is why I need to get the depreciation schedule amended?

    For example, at the time I bought the property, it was determined an asset was valued at approx $1000. The report is currently backdated to the date I bought the property.

    According to my current schedule, using the Diminishing Value method, the value I can claim for depreciation in 2016-2017 is about $120. So my question is why would that value change if I backdate the schedule to only 2016-2017 instead?
     
  9. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Because its incorrect. This ripples through to even CGT issues later. I dont know if the effect is a few dollars or much more. I often see data inconsistencies which lead to lost deductions that also mean a higher final CGT amount too.
     
  10. dext1234

    dext1234 New Member

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    Ah ok that makes sense - thanks for your help.
     
  11. Renae Reilly

    Renae Reilly New Member

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    We are in a similar situation - we purchased our first property in 2011, and are only just now getting the depreciation schedule done. I am going to ask our accountant to see if we can backdate further than 2 years but am not holding my breath! Oh well...you don't know what you don't know!
     
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  12. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    How did you not get one done?
    If the tax agent didn't ask about depreciation they could be negligent.
     
  13. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    It's sad to say but I hear variations on this almost every day.
     
  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Amazing. In this day and age you would think everyone knows about depreciation schedules.
     
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  15. Renae Reilly

    Renae Reilly New Member

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    Hadnt used a tax agent...
     
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  16. Renae Reilly

    Renae Reilly New Member

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    Parents never used tax agents and never had depreciation schedules for their properties...
     
  17. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    By "variations", I meant that it's not necessarily just people whose accountants don't inform them about or consider depreciation, or people who do their own taxes without exploring all potential deductions (sorry, @Renae Reilly--as you said, you don't know what you don't know).

    It's also scenarios like accountants knowing about depreciation but making false assumptions, like that a property is "too old" (no such thing, in isolation), or that there won't be a claim because of the 2017 Federal Budget rulings, or that they'll just depreciate the current owner's renovations manually and ignore the potential claim from previous owners' works, etc.
     
  18. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    ignorance is costly.
     
  19. inertia

    inertia Well-Known Member

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    This is where I am at. I have a pair of properties where I have not had depreciation schedules done. I assumed that due to their age and condition, there would not be any point getting a depreciation schedule done. I actually emailed my accountant this morning asking if I should.

    No doubt I'll be in touch with you shortly Chris to get the schedules done :)

    cheers,
    Inertia.
     
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  20. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Sometimes there is no point as nothing to write down, but it doesnt hurt to ask.