Deprecation Questions

Evening all,

I have two questions with regards to depreciation if anyone would be kind to answer:

1. I signed a contract for a property in April 2017 and it settled on 10 May 2017. I was receiving rent by the end of May (previous owners stayed in the property and rented it). Having this new rule in mind, am I able to claim depreciation costs?
2. Because this property was owned by me for only the last two months of financial year 2017, does it mean I can only claim 1/6th of the depreciation cost stated in the report?

Many thanks

 

Your report will tell you your claimable depreciation from date of Settlement to end of financial. This year will have a bit more fat in it come Tax time, but obviously you can only claim for the time you've been the Owner.

 

Thanks mate. So basically I can claim $11,700 even though I owned it for 5 months only? It's confusing a bit because it's 11k for full next year..

 

1. possibly
2. depends on what the report says

 

No. I understand it as follows.
10th May 2017 to 30th June 2017. So kind of your 1/6th.
THEN 1st July 2017 to 30th June 2018 you'll get your first full year of claim.

 

@WashingtonBrown is a member they will explain

 

1. It seems like it.

2. Most decent depreciation schedules will tell you what the pro rata deduction is for the first partial financial year of your claim--i.e., from either the settlement date or the date available for income until the 30/6. As far as I can work out, the figure represented in the screenshot for that financial year appears to be your total deduction (most people are surprised when they see how high a pro rata deduction can be because it is rarely a case of working out a claimable proportion of the financial year). What confuses me is that the screenshot appears to show a date of 8/3/17 on it but you settled in May. Is that your schedule or a sample you've got from someone else?

As someone above suggested, your provider should be your first port of call to have these questions explained.

 

Hello BMT,

The attached screenshot is for my second property in Brisbane. I have purchased that one in Feb and settled in March 2017. I'll give three company a call today.

I've got the answer already for my second IP.

Thanks

 

Hi Realist35,

Give me a call tomorrow. I've looked into your report and there are 3 reasons why the large value can be written off even though you've only owned it for 5 months.

Things like low pooling and writing off items under $300 can be a good thing!

I look forward to hearing from you - 1300 99 06 12

Regards