Bonnie and Clyde decided to buy a rental property on 1 July 2021. So they purchased the
Question:
Bonnie and Clyde decided to buy a rental property on 1 July 2021. So they purchased the property for $750,000 which included a brand new unit costing $200,000 in building costs Dep @2.5%. The unit began to produce rents from tenants from 1 October 2021. You are required to calculate the net rental income. They received the following during
the year.
RECEIPTS:
Rent Received in Advance on 15th June (July 2022) | 1,800 |
Rent Received in Advance on 15th June (July 2022) | 16,200 |
Reimbursement of lease preparation fee (part only) | 50 |
Insurance recovery for tiles destroyed in hailstorm | 2,000 |
PAYMENTS:
Construction of car park and driveway 2/11/21 | 1,600 |
Repairs for damaged gate from previous owner 1/10/21 | 120 |
Loan establishment fee to ANZ Bank for a 15 year loan 1/7/17 | 680 |
Council rates | 1,600 |
Building insurance premiums | 700 |
Loan repayments (incl interest 42,000) | 47,000 |
Real estate agent fees for consultation regarding best rental purchase | 1,000 |
Archietect Australia fee for a complete inspection prior to buying (incl the termites & woodborers presence, condition of plumbing, condition of brickwork etc | 695 |
5 trips to inspect property 30 kms per trip, use 0.66 cents per KM | |
Ten trees were planted by a landscaper (normal depreciation would not apply) | 400 |
Construction of car park and driveway 2/11/21 Dep @2.5% | 1,600 |
Repairs to roof (replacing tiles destroyed in hailstorm) | 2,300 |
Lease preparation fee | 140 |
Pest control used to remove possums in the roof | 450 |
Removal costs of old caravan (falling apart) left by previous owner | 1,050 |
Other rental expenses (all deductible) | 2,258 |
Note:
- The cost of car park construction is depreciable not full deduction allowed.
- Loan establishment fee is allowed in 5 instalments, instead of full.
- Interest payment is allowed not the full EMI.
- Trip cost to collect rent not allowed anymore.
- Bonnie has less income so to make the most benefit, Clyde should own the property as it will be tax effective
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman