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Depreciation after property is renovated

Discussion in 'Accounting & Tax' started by bythebay, 20th Apr, 2016.

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  1. bythebay

    bythebay Well-Known Member

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    hi PCers

    Did a massive reno on an IP, literally redid the whole inside and some of the exterior.

    I now have an updated Depreciation report reflecting all of the new fixtures & fittings going forward.

    Is there some number on my old depreciation report that I need to add up and claim in the year I did the reno? something about a write-off? I recall reading about it when I did another reno a few years ago .. but cannot recall anymore. :confused:

    Thank you in advance
     
  2. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    You're talking about scrapping. If you're continuing to rent the property out then you can claim the residual depreciation on any assets you disposed of as a write-off. Depending on what you got rid of, this may or may not be complicated. I suggest talking to your tax agent and/or the provider of the original depreciation schedule about what's possible.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Did you scrap items?
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    This question may have been better asked BEFORE you did reno. Lets assume you smacked a few walls out, a few windows, flooring and put a new kitchen in. The residual value of the construction, plumbing, cabinets may be scrapped as an end to their effective life has occurred.

    Check with the QS who did the report and they may want some pics of what you demo'd etc. If its very obvious things like a oven etc then the accountant can do it based on the residual value and date it was destroyed. But generally speaking the Div 43 is lumped together as one cost and would be appraised for the value you scrapped. A QS job.