| Rental property deductions - common mistakes |
| Wednesday, 25 July 2007 | |
|
Negatively gearing rental property investments is a legitimate and tax effective way to reduce an investor's taxable income. However, some investors are making some serious mistakes when preparing their income tax return. These mistakes have been identified by the ATO and will no doubt form part of their audit program when attempting to identify incorrect claims in tax returns.
Common mistakes include: ? Claiming deductions when a property is not available for rent. ? Claiming full deductions for a property that is available for rent for part of the year. ? Claiming initial repair or renovation costs as a tax deduction. ? Incorrectly apportioning interest expenses that relate to private borrowings. ? Incorrectly claiming some legal expenses as deductions. In short rental properties are a very lucrative target for tax audits as the potential for the ATO to reclaim lost revenue is obvious. Individuals with rental property investments should seek professional advice when preparing their annual tax return. Those wishing to engage an accountant with specific expertise in this area should contact Robert Giffard at GiffardSim Accountants. |
| next>> |
|---|