This is a key area many investors and competitors do not explain clearly.
If annual depreciation is denied for second-hand residential Division 40 assets, investors may assume the assets have no tax relevance.
However, the asset values may still be useful because:
- They help separate plant and equipment from capital works.
- They may support future capital loss calculations.
- They may be relevant when the asset is disposed of.
- They may help the accountant when the property is sold.
- They prevent everything being incorrectly treated as building cost.
- Existing carpet
- Existing blinds
- Existing appliances
- Existing air conditioning
- Existing furniture