Greetings and salutations fellow Prop Chat members. Just curious to get the thoughts of those in the know. For one of my IPs I asked my MA to hold and not transfer to my bank account the rental money for the months of May and June of this year. My MA paid the May and June rental money into my bank account mid July of this year. I'm currently working with my accountant and he tells me that even though my MA received the May and June rental money, but didn't transfer the money to my account until mid July, I still need to declare the May and June money as income for FY15/16. Am I stupid to think that because the May and June rental money didn't hit my bank account until mid July it should form part of income for FY 16/17? Thanks.
Your accountant is correct. Section 6-5(4) ITAA 1997 In working out whether you have derived an amount of * ordinary income, and (if so) when you derived it, you are taken to have received the amount as soon as it is applied or dealt with in any way on your behalf or as you direct. INCOME TAX ASSESSMENT ACT 1997 - SECT 6.5 Income according to ordinary concepts (ordinary income)
The agent receives the money in their trust account - at this point it is your money! Daniel is right about your accountant being right.
Bummer Thanks for your insight gents. Definitely a trap for young players hey. There I was thinking the test was merely when the money hit my account.
