Hi accounting gurus…
Tried to do a forum search to see if this question had been answered previously, as i’m sure its been asked. but didn’t come up with any success!
If I already own IPs and am already earning an income from property investment, and then choose to enrol in results or some other mentoring program – are the course costs tax deductible? as i see it, they are self education expenses directly related to a current source of income, and aiming to increase that income. but are they from a “recognised education institute” ? Or can you claim the costs as professional fees?
Any input would be appreciated. $6k tax-deductible cost sounds better than $6k post-tax!
Thanks,
EmmaHi Emma,
I aksed the same type of questions to my tax agent and he said it's really only if the courses are 100% relevant to the current activities of income generation/profit- if you're currently doing a development, it should be tax deductible to attend a developing course, whereas if you're planning on developing it probably wouldn't be.
"Self-education expenses can be claimed provided the study is directly related to either maintaining or improving your current occupational skills or it is likely to increase your income from your current employment. If the study is to obtain new qualifications in a different field the expense will not be allowable." (cpaaccountants.com.au)
It really is dependent on individual circumstances but as you already own a few IP's and a course like RESULTS, as you said, is directly aimed at increasing income from investing, it should be tax deductible.
Regards,
Derek
It starts to get into a little grey area. It depends if the mentoring helps you acquire one particular future property or it provides you with the knowledge to help with your current portfolio. We run a mentoring program and we split the invoice in two.
The first invoice is for the education component (notes, courses and books). This is separate because it gives you knowledge on your existing portfolio. This is the link to the tax ruling on adult education when you have residential property:http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2003324/00001
The second component (mentoring) similar to a Buyers Agent fee is a cost of acquiring a property (capital cost) and is thus added to your cost base. This will mean if/when you sell the property it will result in less Capital Gains Tax being paid.
I would be carful trying to deduct all the mentoring to acquire a future property.
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