Use existing depreciation schedule ?

Discussion in 'Accounting & Tax' started by Evan, 27th Sep, 2016.

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  1. Evan

    Evan New Member

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    Hi,

    I'm currently going through the process of buying my first investment property.
    It's a townhouse which is 5 years old. The current owners have a depreciation schedule (I don't know what the values are per year).


    Is it worth making them an offer, say 100-200 so it's a win/win for each of us or would I be more likely to have a better result(higher tax deduction) by paying and having a new one done?


    Cheers
    Evan
     
  2. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

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    Probably not - because the life of fixtures and fittings starts again at purchase.
     
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  3. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Member

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    The strict tax law requirement is that the buyer of a property is required to continue to use the schedule of the former owner. However in reality few vendors provide it or its ignored or overlooked by the parties to the contract. This requires the buyer to obtain a new schedule which often refreshes and accesses better deductions than if the former schedule was to be used.
     
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  4. dabbler

    dabbler Well-Known Member

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    Either way, they should give it to you (or a copy) in the buy price.
     
  5. BMT Tax Depreciation

    BMT Tax Depreciation Chris Business Member

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    Just to confirm what others have said, while technically speaking you should be using available costs, it's going to be better for you money-wise if you buy a new schedule for the reason Terry gave (and that Paul mentions in his last sentence). You'll miss out of thousands of dollars in deductions if you use an existing schedule--certainly losing more money than you would gain with a new one, even factoring in the fee--and your whole position would be undermined by the fact that you're contemplating paying for it! That is to say, you'd be burning money for information that will force you into a worse financial position.
     
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  6. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Member

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    Dont ask for the schedule OR lose the schedule. Then you will need a new one.
     
  7. dabbler

    dabbler Well-Known Member

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    What schedule ? :)
     
  8. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Member

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    Yes.
     
  9. Evan

    Evan New Member

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    Thanks everyone. The seller was being a bit precious about passing it on, which sounds like it's for the best, thanks for your feedback.

    Cheers
    Evan