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Tax deductibilty of seminars

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  • Tax deductibilty of seminars

    From all I've read and heard, it seemed to be common practice to claim books, seminars etc as an expense against rental income. My accountant has pointed out this year that if the IRD audited, they might claim that these expenses are not directly related to the properties I already own, and claw back the amounts plus penalties. The seminar expense is high ($6000, being wife and myself on 3day course). I could argue my case with the IRD if it came to it, but does anyone win arguments with the IRD?
    I obviously would like to use the deduction if possible, but want to stay on the right side of the IRD. Has anyone had any experience/insight they would like to share on this?

    Viv

  • #2
    No throughts or experience, but training within any industry is essential. In IT, that may be the $100 cost of a book, but it is also (frequently) several $000s for learning the latest technologies - not part of a current 'project', but essential to the future of the organisation.

    That's what I'd argue with the IRD, anyway!

    cube
    DFTBA

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    • #3
      Originally posted by Viv
      My accountant has pointed out this year that if the IRD audited, they might claim that these expenses are not directly related to . . .
      Did you ask the accountant for reasons?
      If so, what were they?
      Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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      • #4
        He said they (IRD) may argue that these expenses were nothing to do with the business of generating rental income from existing properties; rather it could be seen that they apply to acquiring future properties which would then amount to setup costs...

        Viv

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        • #5
          Originally posted by Viv
          He said they (IRD) may argue that these
          expenses were nothing to do with the business of
          generating rental income from existing properties; rather
          it could be seen that they apply to acquiring future
          properties which would then amount to set up costs...
          My initial reaction is that you need a new accountant.
          One that's working for you, as well as billing you. The
          current one sounds like he's billing you and working for
          the IRD.


          A moment's reasoned appraisal will show the falsity of
          the accountant's "reason." The flaw lies in "the business
          of generating rental income from existing properties."

          You are in the business of generating rental income from
          rental properties, past, present and future.

          If you are in the business of being a property investor,
          with an existing portfolio and a plan to expand it, it is
          fatuous to try and link any expense you generally incur in
          relation to the business activity of being a property
          investor, to one or several specific properties, present or
          future.

          Just as income is pooled from your rental properties, for
          tax purposes, so are expenses. I.e. your accountant
          doesn't file a separate tax return for you, for each of your
          properties.

          Yes, the more I reflect, look around for a new accountant.
          Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

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