marketshark45Participant@clintcopperJoin Date: 2016Post Count: 1
I recently sold my cleaning business to pursue a different career path in the business consultation sector. I currently have no loans and would like to invest my savings into a small residential property which I wish to give to my son when he comes of age.
I also have a 50k sq.f. (10000sq.m) storage area I’d like to rent and add the money to my savings. Since I’m familiar with the cleaning business and I’m currently working commercial cleaners in Sydney, I’m interested in renting out the storage to a company in the branch, such as house removals, for example.
Will I be able to get a tax deduction for my small property investment or for my rented property?
I havent had the time to speak to a property investment advisor, so apologies if my question seems rather strange and badly structured. If there’s any additional info that would help, let me know.Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,750
Hi there and welcome to the community.
I’m a little confused by the question, but here’s a stab at an answer:
1. Buying a business
This is not a tax deduction, but instead is the acquisition of an asset. The income from the business is assessable, and the costs of running the business would be a tax deduction.
2. Buying an investment
Same as #1 above. The purchase price paid is the cost of the asset. Rent would be the income, and interest and running costs would be the tax deduction.
3. On disposal
On disposal of the asset, the surplus of sale less cost is a capital gain. If the sale proceeds are less than the cost then there is a capital loss.
4. Annual Operating
In regards to operations, if there is more income (assessable income) than expenses (allowable deductions) then you will pay income tax at your marginal tax rate. If there is a loss (expenses > income) then that loss can be carried forward. You can only get a tax refund if you have paid tax in the first place.
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
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