Property Investors Note 2004-2005 ATO Audit Project August 2004 RETURN
ATO Audit Project concerning common reporting mistakes for rental property returns The Tax Office has issued a fact sheet outlining common rental property mistakes that are being made by taxpayers. As the ATO is currently targeting rental properties, we expect these areas to be an audit focus: claims for initial repairs and renovation costs; interest on private borrowings – i.e., not apportioning interest on a loan taken out for both income-producing and private purposes; not apportioning travel costs where a visit to inspect the rental property is combined with another purpose, such as a holiday; claiming deductions for a property that is not genuinely available for rental, or not apportioning deductions where the property is rented for only part of the year; including the cost of the land in capital works deductions (i.e., as part of the cost of constructing the rental property); and claiming depreciation on construction costs. The ATO has just released a concise policy for allowable deduction and depreciable write offs and any Taxation return concerning investment property should be prepared with the help of an appropriate professional. Prepared by: Mr Brett Hotchkin B A Hotchkin & Associates 4/38 Margaret Street, Moonee Ponds 3039 ph. 9370.7711
ATO Audit Project concerning common reporting mistakes for rental property returns The Tax Office has issued a fact sheet outlining common rental property mistakes that are being made by taxpayers. As the ATO is currently targeting rental properties, we expect these areas to be an audit focus: claims for initial repairs and renovation costs; interest on private borrowings – i.e., not apportioning interest on a loan taken out for both income-producing and private purposes; not apportioning travel costs where a visit to inspect the rental property is combined with another purpose, such as a holiday; claiming deductions for a property that is not genuinely available for rental, or not apportioning deductions where the property is rented for only part of the year; including the cost of the land in capital works deductions (i.e., as part of the cost of constructing the rental property); and claiming depreciation on construction costs. The ATO has just released a concise policy for allowable deduction and depreciable write offs and any Taxation return concerning investment property should be prepared with the help of an appropriate professional. Prepared by: Mr Brett Hotchkin B A Hotchkin & Associates 4/38 Margaret Street, Moonee Ponds 3039 ph. 9370.7711