Depreciation?

Is a depreciation report just a one time thing unless you do any upgrades to the home?
I just bought a place and need to do a depreciation report before I rent the property out.
Does a report have a time limit?

Thanks

 

Yep, they last for ages. But they need to be fiddled with when changes are made to the property. We don't charge for that.
Scott

 

Thanks Scott I was a bit unsure how it worked.
Actually I sent photos to your competitor on the weekend.
I haven't decided who to use yet.
How long does it take to booked a person to come and do a report? And how long does it take them?

 

Scott is correct but ensure that if another company does your report, they may charge you a fee for any updates (i.e replacement window furnishings, stove etc).

 

Tenants are the wild card if the place needs inspecting. We need to fit in with them. Time in the property would average half an hour. After the inspection, the Dep Schedule itself usually takes about 5 days to come through - but can often be done quicker if people have appointments with their accountant.

 

Luckily its generally a one off cost. Reasons to update the report :
- Just PRIOR to major reno's to identify value to be scrapped ie old pergola and clear roofing.
- Just after major reno's : Adding new metal pergola, sliding doors etc.
- Sometimes when plant and equipment is replaced....

If you replace minor plant & equipment (AC unit, HWS. oven etc) there can also be scrapping deductions. The new item can be handled by the accountant. It just depends if the former asset needs to be w/off etc.

 

Thanks Scott it's for next financial year and I'm about to go unconditional so it would be before tenants move in.

 

Scott can I send you the link to the property?

 

Sure. Email it to me and I'll tell you what I reckon. [email protected]

 

Just sent to you

 

Hi Scott,
The oven in my IP is busted and I'm in the process of getting a new one. Do you need to get a scrapping report done before the old oven comes out, or do you simply get in touch and say 1990era oven scrapped, new $800 oven installed?

 

If you have a Dep Schedule already for the property, the oven will be in it and it will have a written-down value. Of course, it's also likely to be in the Low Value Pool, which might complicate things.
If you don't have a Dep Schedule and you have to replace the oven, just take a photo of the one that is there before you toss it out so somebody can put a disposal value on it.
Scott

 

Thanks very much Scott, too easy!

 

Hi Scot
Would that apply to a full kitchen Reno where you've scrapped all the cabinets, sink, etc before the depreciation report has been completed? I guess there prob won't be much value attached to that...

 

Kitchen cabinets and sink are 'building', so their age dictates whether there is anything to claim on them when they are disposed of. If somebody buys a property with, say, a 90s kitchen, rents it out for a while and then tosses the kitchen, there will be something to claim. It's a pretty common scenario.
Scott

 

Thanks Scott, will give you guys a call to discuss as your company did my schedule.