All Topics / The Treasure Chest / Seminars – Tax Deduction?

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  • Profile photo of MavericMaveric
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    @maveric
    Join Date: 2003
    Post Count: 0

    Hi,

    I’m a newbie to both the forum and also to property investing. I’ve attended several seminars and also purchased an investment analysis software package this year (total of $3,000 spent). I have not purchased any properties yet but I plan to in the next couple of months. Does anyone know if I am able to claim these expenses against this years income? If not, can I claim them against next years income once I have started investing?

    Thanks in advance for any responses, this site has already been really helpfull.

    Maveric.

    Profile photo of ksheatherksheather
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    @ksheather
    Join Date: 2002
    Post Count: 33

    As it will be used to aid you generating taxable income it is deductible in my opionion.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi Maveric

    As the courses do not relate to current income, I beleive they are probably not deductible. Check with an accountant.

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of davidfemiadavidfemia
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    @davidfemia
    Join Date: 2003
    Post Count: 89

    Hi Maveroc,

    I beleive these are capital costs, and can therfore be added to your cost base. This will reduce the effects of a capital gain once the property is sold.

    David Femia

    Femia Property Group
    Property Investment Consultants
    http://www.femiapropertygroup.com.au

    Profile photo of hwd007hwd007
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    @hwd007
    Join Date: 2002
    Post Count: 247

    if you purchase next financial year, im not sure you can claim these expenses or capital costs incurred this financial year. Unless you can claim past years expenses retrospectively ?

    Profile photo of scottscott
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    @scott
    Join Date: 2003
    Post Count: 110

    I’m in a simmilar situation, ie don’t own an IP yet but have spent large amounts on seminars, travel and accomodation, learning about and finding the IPs I’m currently purchasing. The amounts are not tax deductable from income as such, but I’ll definatly check out adding them to the cost base of the properties we’re buying to reduce the effects of CGT. Thanks David!

    Cheers,
    Scott S

    “Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
    -anon

    Profile photo of G-MAN007G-MAN007
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    @g-man007
    Join Date: 2003
    Post Count: 37

    I spent $4500 on a course and it was tax deductable without me purchasing an investment property. I was advised that as long as you have some sort of investment eg: a small parcel of shares it can be claimable.

    Profile photo of LeighLeigh
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    @leigh
    Join Date: 2003
    Post Count: 130

    I enquired about this one with my accounting lecturer at uni. He said that you should be able to claim the seminars as an expense for 2002-2003 as an educational expense incurred to generate a future investment income.

    Maybe this is why he’s lecturing at uni instead of owning his own practise? I’ll be getting my tax done in the next week or so I’ll let you all know the results.


    “All the world’s a stage, and you choose the role you want to play on that stage” William Shakespear


    Profile photo of Stuart WemyssStuart Wemyss
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    @stuart-wemyss
    Join Date: 2003
    Post Count: 598

    This is a complex area. There is no easy answer (depends on a lot of factors). I suggest you seek professional accounting advice. Plus you can also see http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR989/nat/ato/00001

    Cheers

    Stu

    Property & Finance News
    at http://www.prosolution.com.au

    Profile photo of LeighLeigh
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    @leigh
    Join Date: 2003
    Post Count: 130

    Stuart,

    You impress me with every post [8D]

    There was a paragraph in that document which stated

    quote:


    We consider that self-education expenses are not deductible against payments under the following Commonwealth educational assistance schemes:
    (a) AUSTUDY;


    As I am currently receiving an AUSTUDY payment I can see that my seminar expenses cannot be claimed against this income. It did not make it clear whether the expenses could be claimed against other earned income though, one to check up on with my accountant.

    There was also a paragraph which stated

    quote:


    No deduction is allowable for self-education expenses if the study is to enable a taxpayer to get employment, to obtain new employment or to open up a new income-earning activity (whether in business or in the taxpayer’s current employment). This includes studies relating to a particular profession, occupation or field of employment in which the taxpayer is not yet engaged. The expenses are incurred at a point too soon to be regarded as incurred in gaining or producing assessable income.


    Hopefully as G-MAN007 suggested owning a parcel of shares will overcome this point.

    Profile photo of richmondrichmond
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    @richmond
    Join Date: 2003
    Post Count: 831

    what about the travel expenses to research and buy in Rockhampton? My trip (last week) was not just to suss things out, I bought 4 houses there, so what would the tax man say about that? My fiance and I already have an investment property in Vic, so does my Qld trip mean I’m just adding to my income? Or does that point come at settlement when the tenants $$ start going into my account?

    Cheers
    R

    Profile photo of Stuart WemyssStuart Wemyss
    Member
    @stuart-wemyss
    Join Date: 2003
    Post Count: 598

    Richmond – you already have an existing income stream so I would think it’s deductible. You may have to apportion between personal and investment (i.e. meals expenses, etc may not be deductible). This is a tricky area which I have not touched on for a couple of years (not until now when it’s become relevant again).

    There is a defence that if a deduction is denied (maybe through an audit) and so long as you have a ‘reasonable arguable position’ (weird wording I know) then perhaps at worst all you will only have to pay is the tax and interest accrued on that amount (no penalties). So at worst you just pay the tax later. On this basis I am reasonably aggressive but not to the point where I move away from “reasonableness”.

    I am not suggesting that anyone break the law. By all means comply with the tax law. I just want people to be aware that perhaps there might be an argument for why a deduction is legitimate. But this has to be an educated and well informed argument. Ignorance will not help you.

    Just work with your accountant and give them as much information as possible. Bounce ideas off them. I would not suggest doing it alone.

    Cheers

    Stu

    Property & Finance News
    at http://www.prosolution.com.au

    Profile photo of scottscott
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    @scott
    Join Date: 2003
    Post Count: 110

    Stu,
    You know my situation better than most. Can expenses related to the purchase of IPs that will settle in the new financial year(with a bit of luck) still be tax deductable, this year?
    Or should they just be added to the cost base of the properties. The other thing is the name on the invoice important (the IP’s are in mums name, some invoices are in mine).
    As far as seminars, books and other products, I guess I should speak to my accountant, because really they’re no different to other courses I’ve done in other areas and been able to claim previously.

    Cheers,
    Scott S

    “Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
    -anon

    Profile photo of LeighLeigh
    Member
    @leigh
    Join Date: 2003
    Post Count: 130

    Haven’t filled in my tax return yet, but my account did a little research for me and said that I can claim the seminars as a deduction because i own other investments – shares (which I just sold some of to attend Steve’s next seminar!).


    “If you can count your money, you don’t have a billion dollars”
    J. Paul Getty


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