Bathtub resurfacing and Shed Replacement - Repair or Improvements?

Discussion in 'Accounting & Tax' started by EN710, 18th Jun, 2015.

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  1. EN710

    EN710 Well-Known Member

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    I'm taking the chance to be the first person posting on this section o_O

    IP1
    Shed decimated by storm, to be replaced with the new one.
    Removing old one + adding the new one is $500. Is this a repair? Or should I put this into depreciation report update?

    IP2
    Old bath very rusted tub, don't have resources to redo the bathroom so opted for resurfacing - $580
    Same question, is this a repair? Or should I put this into depreciation report update?
    Old SS thread: http://somersoft.com/forums/showthread.php?t=108896
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    I'm no tax expert, but to my untrained eye I would think the shed might be able to be scrapped? And I would definitely say the bath is a repair/maintenance, similar to painting a house.

    Happy to be shown wrong though :)
     
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  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The shed may well be written of (scrapped) if its still on a QS report. However where the replacement (your words) costs more than $300 it is not deductible. Check page 33 of the ATO rental guide. It specifies the replacement would be written off 40 years (and then scrapped when it fails after 10-15)
    https://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/ind39784n17290614.pdf

    The resurfacing appears to satisfy the characteristics of a repair. Resurfacing using like materials (paint / porcelain etc) is a not a replacement of the bath but a remedial cost to restore the original appearance and function.
     
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  4. EN710

    EN710 Well-Known Member

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    Thank you Paul!

    For the shed, will it make a difference if the invoice separate the removal of old shed, cost of new shed and cost of install? The new shed is about $200 + installation
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Provided the install cost keeps total cost at $300 then its fine.
    Strategy may be to pay $300 (and $50 cash on side and ignore that for tax ?)
     
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  6. EN710

    EN710 Well-Known Member

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    Will give it try :p