Hi all,
I am wondering:
If I were to purchase a powertool such as a drill, sander, etc… for the purpose of being able to maintain and improve my IP, would the cost of purchase be a deductible expense? If so, does it come under maintenance and repairs, or capital improvements?
The same question applies to the accessory parts such as drill bits.
Please note; my question is relevant to a property held in my own name (ie not a company or trust or SMSF).
Thankyou in advance!
JacM
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
anyone?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Not an accountant so disclaimer applies.
Tools would only be deductible if they were considered oart of your business. If your property investment qualified as a business then you may be able to claim tools. If you are like most people and your property investment is sufficient to be classified as a business then the answer would be no.
Even if you qualifed as a 'property business' there would have to be any apportioning of tool use for private purposes.
Not an accountant either – but I wouldn’t think they were deductible.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
JacM wrote:Hi all,I am wondering:
If I were to purchase a powertool such as a drill, sander, etc… for the purpose of being able to maintain and improve my IP, would the cost of purchase be a deductible expense? If so, does it come under maintenance and repairs, or capital improvements?
The same question applies to the accessory parts such as drill bits.
Please note; my question is relevant to a property held in my own name (ie not a company or trust or SMSF).
Thankyou in advance!
JacM
The tools and accessories (as opposed to any consumable items such as sanding discs) would be capital.
They may be depreciated, and a deduction claimed for the taxable use proportion of their decline in value.
To the extent they are mainly used for earning income other than from a business then any items costing no more than $300 may be depreciated 100% in the year of purchase.
Cheers,
Rob
What Rob said.
In addition, there are occasionally various initiatives brought out by government that allow further tax concessions eg about a year ago, if you purchased any capital equipment new with value in excess of $1000 you could write it off immediately. Simultaneous, at the moment there is a capital gains incentive for small business with a 50% reduction in CGT, although I am unsure of the details. One of my notoriously sneaky buddies was telling me about it a couple of days ago. Chat to a decent accountant or call the ATO
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