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Claiming Travel - Interstate

Discussion in 'Accounting & Tax' started by Frosty123, 9th Dec, 2015.

  1. Frosty123

    Frosty123 Well-Known Member

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    Hi all,

    I've recently purchased an Investment Property with my spouse in Brisbane (we live in Melbourne).
    The contract has gone unconditional, and settlement is a month away from now. She hasn't yet seen the property, and has booked a flight to Brisbane for 2 nights a couple of weeks after settlement (to both catch up with a friend and have a look at the property).
    Is the cost of her flight tax deductible (or at least 50% of it)? We may or may not have tenants at the time she fly's up, but it will certainly be on the market.

    Thanks

    Frosty
     
  2. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    For the travel related to management of the IP then a % would be deductible ie meet with agents , engage them and discuss management, etc... Perhaps 50% if the purpose for travel is mixed. Travel to "look" at what you own is not deductible. There is no deductible purpose for the travel.

    Good example of how ATO may nit pick. If they queried the cost and you explain it wrong way it can be denied.
     
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  3. SerenityNow

    SerenityNow Well-Known Member

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    Not wanting to start a new thread so I'll post this here: what about travel for research purposes, where income is derived from books/articles written based on that research? Would it be ok to claim 30 - 50% of such mixed purpose travel? My accountant's always been ok with it, but ... :confused:
     
  4. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Travel to look at properties you don't own yet is not tax deductible.
    Travel to research so that you can write a book to sell is a different matter and a % is deductible (relating to the work for the book) since it is for the purpose of making an income from book sales.
     
    Last edited: 9th Dec, 2015
  5. chindonly

    chindonly Well-Known Member

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    So, looks like we are all writing books now.... I have just started....
     
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  6. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    I know it is all self assessment and everything but I don't like your chances if you're audited by the ATO.
     
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  7. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Except costs relating to the book may be deductible against income from that activity (a business). The loss (assume no income yet) may be deferred under the non-commercial loss rule test. Only if and when income arises can the costs offset same income. And then if its a loss there may still be a concern. Who makes huge revenue from selling books ?? Not many.

    Its not that easy peeps. Negative gearing is not automatic in some cases.
     
  8. SerenityNow

    SerenityNow Well-Known Member

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    Yep: I believe under a certain revenue amount it may be classified as a hobby? (Therefore not affected by taxes/losses/expenses?) I'm not a lawyer/accountant though...

    Edit to add: also, one of my writer friends called the ATO to ask about something, and discovered they have a whole department dedicated to dealing with "writers". The guy she spoke to was also very knowledgeable about whatever obscure thing she asked. For all I know, the whole department is just this one guy, but it indicates to me that they're not completely unaware ;)
     
    Last edited: 10th Dec, 2015
  9. cherubym

    cherubym Well-Known Member

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    This is similar to what I am going to do. So I'd rather post a question here:
    I'll have to fly from Melbourne to Brisbane to meet our property manager to go through the property that we recently leased out. The property is 100% under my name, while mortgage is under both my spouse and me. As there is no friends/family to look after the kids, we have no choice but to bring the kids.

    The purpose of the travel is 100% rental-related, so income-producing purpose. How does it make it complicate with the kids for the travel cost (including air fare, car rental and accommodation)? Do we take out the portion of the kids when we tax-deduct the whole bill?
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    We? You could possibly claim all or part of your share of the expenses but not your wifes share or the kids share.
     
  11. cherubym

    cherubym Well-Known Member

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    Does it mean 1/4 of the whole bill?

    For air fare, it makes sense, as each take own seat. But for car and accommodation, I'd still have to pay the same, regardless of whether I go alone or with them. So 100% deduction for car and accommodation?

    Also, is a child counted the same proportion as an adult?
     
  12. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You would have to apportion it out on a reasonable basis. Car could possibly be claimed in full.
     
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  13. cherubym

    cherubym Well-Known Member

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    Thanks a lot, @Terry_w ! You always rocks!
     
  14. Marg4000

    Marg4000 Well-Known Member

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    Depends on the main purpose of the trip and how long. If there and back in one day or two with visits re the property then probably no issues.

    Go for a two week holiday with a visit or two re the property and you will be lucky to claim much at all.
    Marg
     
  15. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Taking the whole family makes it look like a bit of a holiday too.
     
  16. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    We travelled to Brisbane to inspect our IP after putting down deposit and before cooling off expired. The property is only on one name, the mortgage in two. We only stayed one night, we paid airfares, accommodation and car hire for the sole purpose of driving to inspect IP. What can be claimed?
     
  17. Azazel

    Azazel Well-Known Member

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    Yep, definitely need to keep that in mind.
    Some people think they can go for a holiday, look at the house once, and claim it all.
     
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  18. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    I suspect you can claim nothing on a property that you do not own. But get your own advice.
     
  19. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Nothing
     
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  20. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    Well that's a downer! I'm sure the ATO won't be passing on their cut of the CF on it and the end of the year!

    Also Terry, next time could you be a little more direct with your answer :p
     
    Terry_w likes this.