IP claims for painting, screen door, lights & Vanity

What are the rules for being able to claim the full cost of the items above?

- Needed painting before new tenant moved in due to being treated without much TLC by previous tenant. (It was not painted prior to previous tenant moving in, but it was in great condition)
- The screen door was broken and needed replacing
- the lights in the living and kitchen were rusting (spot light types) and were replaced with LED lights
- The vanity was breaking and needed replacing.

Am I able to claim these items as deductions or do they become something different?

It seems the answers I'm finding on the net are slightly vague or more likely just plain confusing me...

Thanks.

 

How long have you owned the IP?
Marg

 

about 5 years

About 5 years.

 

What are the rules for being able to claim the full cost of the items above?

- Needed painting before new tenant moved in due to being treated without much TLC by previous tenant. (It was not painted prior to previous tenant moving in, but it was in great condition)

Sounds like a deductible repair

- The screen door was broken and needed replacing

Replacement. Capitalise. Maybe low value pool


- the lights in the living and kitchen were rusting (spot light types) and were replaced with LED lights

Sounds like replacement with something better. Capital. Maybe low value pool

- The vanity was breaking and needed replacing.

Capital. Maybe low value pool.

Am I able to claim these items as deductions or do they become something different?

It seems the answers I'm finding on the net are slightly vague or more likely just plain confusing me...

 

Of course the (installed) cost of each new item may allow it to be deductible if under the $300 capital item value

 

Thanks Mike and Paul for the info.
So the Low Value Pool is this less than 300 dollar capital item?
My accountant says none of them are deductible. I'll contact my Acc and ask them to clarify it for me.
I'm pretty sure the screen door was about 580 bucks, so I'd say that's out.

So capitalise means to claim a percentage per year? If I read correctly it's 2.5% over 40 years?

Sorry another question. If something is broken and I have to replace it, unless it's under 300 dollars I can't claim it as a deduction? I have to claim it at the 2.5% per year?

So it's better to fix something than to replace it in the short term, but in the long term to get a better tenant it's better to replace it... mmm...

 

Poor advice from the accountant. The painting would be at least 1k. Thats a big benefit lost.

Low value pool is for items under 1k. Capitalise isnt just 2.5%. Thats for capital works which none of these are. Different rates apply. 300 dollars is the value you can depreciate at 100%. Same as getting an immediate deduction

Best advice i can give is to move on from your current adviser. Maybe they are cheap i dont know but the advice has been awful.

 

Thanks again for the info. I haven't signed the ITR yet, so they can't lodge it. I'm not going to do so until I was certain about these things. I'll definitely be contacting them in regards to this stuff.

Edit: I need to clarify. When I said the Acc wrote none were deductible, I meant 100 percent deductible. They capitalised all 4 items they replied just before.

 

And when a new item is depreciated (eg carpet) the former item may be eligible for scrapping IF its itemised on the QS report and it hasnt yet been allocated to a pool

 

can't the accountants read a tax ruling ?

Legal Database

20. Some kinds of maintenance work are 'repairs' in terms of section 25-10, for example, painting plant or business premises to rectify existing deterioration and to prevent further deterioration. Other kinds of maintenance work, such as oiling, brushing or cleaning something that is otherwise in good working condition and only requires attention to prevent the possibility of its going wrong in the future, are not 'repairs' in terms of the section . Expenditure on the latter kind of maintenance work may be an allowable deduction under section 8-1.

 

Reading and comprehension are different skill sets.

Take painting for example. Many options
1. Can be a initial repair
2. Can be capital in nature
3. Can be deductible as a repair OR
4. Deductible as maintenance
5. Could be a composite cost eg part capital part repair etc and no basis for apportioning.
6. Can be a CGT cost
7. Could even be exempt (ie main residence) or subject to pro-rata exemption. eh Home used as a place of business.
8. Could be non-deductible and not a CGT cost too if substantiation fails. ie paid in cash.

 

I doubt they have even read it

 

52 pages. Master Tax Guide is 2,500

 

When i did my Masters of Tax i did way more than 2,500 pages of reading. It's not that onerous. Photoreading is a good skill to learn.

 

Way way way more...,. The Act is how many pages. Ancilliary case laws ? Rulings etc.....Why I now have glasses