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Depreciation vs Scrapping Schedule?

Discussion in 'Property Finance' started by alexm, 25th Feb, 2016.

  1. alexm

    alexm Well-Known Member

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    Hi all,

    I'm about to start building on another of our projects in the next six months so we'll be knocking down the existing house. The current house is 30+ years old.

    Is it worth doing a depreciation schedule or getting a scrapping schedule instead?

    Thanks
    Al
     
  2. MTR

    MTR Well-Known Member Premium Member

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    There is a comprehensive thread on SS by @Paul@PFI
     
  3. Hodge

    Hodge Well-Known Member

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    I'm in the same boat. Will try a search on ss and paste the link here.
     
  4. Depreciator

    Depreciator Moderator Staff Member

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    It depends on whether the house has had any renos and what Assets (appliances etc) are in the house.
    Even if there are no renos, it's often easy to find several thousand dollars in Assets being tossed out.
    The key is to rent the place out before you do the tossing - and then rent out the new place.
    We had a client last year who bowled over an old house that had lots of renos. We put a value of over $60K on the stuff that ended up going to the tip.
    Scott
     
  5. Hodge

    Hodge Well-Known Member

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    Let's say the house had a renovation 6 years ago but a depreciation schedule was never done. Can you still get a scrapping schedule done?
     
  6. Depreciator

    Depreciator Moderator Staff Member

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    Yep. As long as the place it still standing. We do it all the time.
     
  7. Hodge

    Hodge Well-Known Member

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    @Depreciator thank you. Will Make a booking for next week. Graham will get sick of seeing me!
     
  8. Depreciator

    Depreciator Moderator Staff Member

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    When you call the gang, explain what you need. It sounds like what you're after is a 'Disposal of Assets' letter, but it will still need an inspection. Mention that it would be great if Graham could come out - he's a good guy and been with us for nearly 15 years I'd say.
     
  9. Hodge

    Hodge Well-Known Member

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    Thanks depreciator will do. I love Graham. He's really switched on and knows his stuff.
     
  10. Depreciator

    Depreciator Moderator Staff Member

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    Yes, he knows a lot. We only use people qualified to estimate construction costs for inspections. Not many other companies do that. It's a personal thing. There is nothing wrong with sending someone out to get some measurements and photos for someone else to cost the job. I would just much rather the person on the ground be the person who does the costing and values the Assets. It helps when clients have questions after they get their Dep Schedule.

    Boy, Graham can talk, though.
     
    Last edited: 25th Feb, 2016
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  11. alexm

    alexm Well-Known Member

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    @Depreciator , thanks for the advice.

    We normally build on greenfield sites or immediately bowl the joint over. For this particular project we're renting out the place for six months while the plans/DA etc. are sorted out.

    Can you PM me your details?
     
  12. Depreciator

    Depreciator Moderator Staff Member

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    Email is the best way to reach me: scott@depreciator.com.au. I'm in the office most of today, too - 1300 660033.

    BMT do this sort of thing, too, but I'm not sure whether anybody else does.
     
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  13. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Depends on the nature of the acquisition too. If land and existing property were acquired and a subdiv etc is undertaken and intent is to sell even some then I would think it would be a tough deduction to consider. Really needs personal advice based on each taxpayer / project. When I see the word "project" I query.

    Where the land use is intended to solely be used for rental income then more likely.