Do IP expenses have to be claimed?

Viewing 5 posts - 1 through 5 (of 5 total)

Spongy
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@spongy
Join Date: 2013
Post Count: 22
July 28, 2013 - 1:17 am
This sounds like an odd question, but I would like to know if one can effectively pick and choose deductions to minimise losses. The prime motivation is to ensure FTB B is not lost, thus wanting to keep losses under the threshold. If I don't claim my share of the interest expense for example and my husband does (still only his share, not mine), it this permitted on a jointly owned investment property?
Thanks guys
Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
July 28, 2013 - 1:39 pm
Good question – to which I don't know the answer.
You will have to look at what income they base the FTB B on – it is not taxable income. Any loss from a rental property could affect affect you – but not claiming a deduction would also mean a higher income from rent.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Spongy
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@spongy
Join Date: 2013
Post Count: 22
July 29, 2013 - 1:07 am
Thanks Terry.
As I don't have any income at present, apart from my share of a net rental loss, I want to ensure it remains under the FTB income threshold of $5183, as net losses are counted as income for this purpose. So for me, it wouldn't matter about a higher level of rent. I think I'll be under the threshold anyway, as I expect the loss to be about $4K, but was curious as to the legality of not claiming expenses. I don't think it could be caught under Part IV as I'm not avoiding tax, just trying to maximise FTB
eilatan28
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@eilatan28
Join Date: 2010
Post Count: 44
July 29, 2013 - 6:09 am
i would think that because losses count as income, you would be required to declare it. To me its kinda the same as making cash on the side and not declaring it. It would make you eligible for a FTB payment that you are not rightfully entitled to. just my 2 cents worth. Interested to hear what centrelink / an accountant would say though.
Spongy
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@spongy
Join Date: 2013
Post Count: 22
July 29, 2013 - 9:20 am
I do appreciate that if someone was working and then entitled to a tax deduction due to a rental loss in order to get FTB that would be taking two bites of the cherry. I guess as I see it, I earn nothing and my net rental loss is useless to me and is still halving my entitlement.
Since my tax is so simple, I'm just doing it myself, but have decided to declare all the expenses. I'd rather stay on the right side of the Commissioner!