Capital Tax & Depreciation Report
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A Tax Depreciation Report is an assessment of the depreciation obtainable from an investment property. Who require these? Investors, Property Managers, Real Estate Agents, Accountants.
Did you know that you can get 1000's of dollars back from your tax every year by getting QBM to do this for you?
For a minimal cost you will reap the benefits every year by at least 500% of your initial outlay in the first year alone. That is a return on your investment that is not possible with anything else.
A new property can be depreciated for 40 years from it's date of construction, but don't think because your investment property is older than 40 years that you miss out. It just means that you cannot claim everything with an older property.
What if you haven't claimed anything in previous years? No problem, QBM will do the report for you and you will be able to claim back taxes.
Even if you are on the lowest tax bracket, QBM can ensure you get the maximum tax refund.
If you’ve never had a Capital Allowance and Tax Depreciation Report carried out on your investment property, you will be in for a nice financial surprise.
QBM has extensive knowledge of construction as well as the deductions the ATO allows – it’s our job to make sure every legal claimable component is included in the depreciation schedule we prepare for you.
Scope of Report
A Tax Depreciation Report is a report listing all items that may be depreciated within the particular rental property. The Tax Depreciation Report is Not a recommendation as to how you should structure your tax affairs, nor should it be construed as a recommended course of action. You should seek the advice of your Accountant or Tax Agent prior to undertaking any course of action based upon this report.
The Tax Depreciation Report is based upon legislation in effect, at the time the particular asset was acquired and the date of preparation of this report. The Tax Depreciation Report is based upon QBM's interpretation and understanding of the ITAA 1997, tax cases and tax rulings as of the date of this report.
The Tax Depreciation Report identifies capital allowances available to the owner of the property from the date the property was first available for rent or income producing purposes, to 20 financial years from the date available to rent.
Under Division 40 of the ITAA 1997, a taxpayer has to choose between the Diminishing Value method and the Prime Cost method of calculating the decline in value of items of plant and articles. The Tax Depreciation Report provides both schedules to allow you to choose the method best suited to your particular needs. The Tax Depreciation Report also includes a Low Value pool of items between $300 and $1000. Where plant or articles are depreciated to $1000 in the Diminishing Method, they are transferred to the Low Value Pool automatically.
Please note that it is not possible to change between the Diminishing Value and Prime Cost methods once a method has been chosen.
Definition of Terms
Depreciation Assets - Formerly known as "Plant and Articles". Depreciating Assets can be defined as items with a limited effective life that are reasonably expected to decline in value. They are also loosely defined as items that are "easily" removed from a property, as opposed to being "permanently fixed" or built-in.
Installed Costs - Any fees associated with installing the asset or items into its final position. These costs might include labour or fees etc.
Effective Life - The period an asset can be used to produce income which is determined by the Commissioner of Tax. For the purposes of Prime Cost Calculations, the effective life is divided by 100 to provide a percentage rate. The effective life is divided by 200 to acquire the Diminishing Value method percentage rate.
Diminishing Value Method - A method of calculating the Decline in Value that uses an opening adjusted value as the base for the calculation as you would find in the previous date period.
Prime Cost Method - A method of calculating Decline in Value that uses an opening adjusted value as the base for the calculation as you would find in the previous date period.
Decline in Value - The amount of depreciation between any two date periods.
Adjusted Value - The value of an asset after some period of decline in value. (previously referred to as a written down value or WDV)
Immediate Write-Off - Any Depreciating Asset with a cost to the investor of less than $300 can be immediately written-off. i.e. depreciated at 100%. This is only available where the item is not part of a set (e.g. there are no identical items present or a table and chair setting) costing more than $300.
Low Value Pool - Low Cost Assets have a staring value of between $300 and $1000. These are depreciated at 18.75% in the first year, and 37% each year in subsequent years. The Diminishing Value Low Value Pool also includes assets that fall below $1000, which are called Low Value Assets.
Low Cost Asset - A depreciable asset with an installed cost of less than $1000.
Low value Asset - A depreciable asset that has an adjusted value of less than $1000.
Black Hole Expenditure - The portion of a purchase that is not claimable due to the age of a building or type of asset.
QBM have 2 options available to you
- An inspection and report by our qualified inspectors
- Self Assessed on-line
