Claiming early purchases

Discussion in 'Accounting & Tax' started by noneother, 23rd Apr, 2024.

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  1. noneother

    noneother Well-Known Member

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    Hi

    In the same FY, I purchased an oven because it was on sale and kept it in storage.
    Then later on in the same FY I had purchased an IP, tenant advised the oven broke and decided to use the aforementioned oven as a replacement, can I claim this as a deduction?

    Or, can I only claim that replacement item only if it was purchased after I've acquired the IP?
     
    noneother, 23rd Apr, 2024
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  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If it is connected to rent you could claim it usually. But an oven is a fixture so you could only depreciate it. But to depreciate it it would generally need to be brand new
     
    Terry_w, 23rd Apr, 2024
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  3. noneother

    noneother Well-Known Member

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    Noted about depreciation. Besides substantiate it with a tax invoice, would I need to provide photos of post installation, emails with PMs etc? I would think the ATO would question how a purchase before the IP purchase date would be related.
     
    noneother, 23rd Apr, 2024
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  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Think if audited how could you prove it
     
    Terry_w, 23rd Apr, 2024
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  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Not likley as the cost is likely above $300. It is a Division 40 depreciable asset. The start date for the USE of the oven aftre it is installed is the time when depreciation commences. The installed costs is the sum to depreciate. If there was a cost for delivery and install etc
     
    Paul@PAS, 24th Apr, 2024
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