It's still amazing how the media and others get the numbers so wrong.
Just saw;
Trader made $87,500
Purchased for $463,000, spent $33,000 on reno and sold for $583,500.
Is there something missing here?
Obviously I have made up the numbers, and there might not be commission for example. But this shows how $87,500 can drop quickly down to $50,122 before tax!
Still really good profit!
Ross
Just saw;
Trader made $87,500
Purchased for $463,000, spent $33,000 on reno and sold for $583,500.
Is there something missing here?
Incl GST | Excl GST | ||||
INCOME | |||||
Sale of Property | 583,500 | ||||
Less GST - Divide by 23 * 3 | 76,109 | ||||
507,391 | |||||
EXPENSES | |||||
Purchase | 463,000 | ||||
Commission on sale | 20,131 | ||||
Legal - $1,000 to buy and $1,000 to sell | 2,000 | ||||
Accounting | 500 | ||||
Advertising - Agent or other | 1,500 | ||||
Insurance for 3 months | 200 | ||||
Rates - 3 Months | 500 | ||||
Renovations | 33,000 | ||||
Telephone | 25 | ||||
Travel - 86 cents per km * 300 | 260 | ||||
Subtotal Expenses | 521,116 | ||||
Less GST | 67,972 | ||||
Subtotal Excluding GST | 453,144 | ||||
Less Loan Fee - NO GST | 1,000 | ||||
Less Interest 3 months @5% | 3,125 | ||||
TAXABLE PROFIT | 50,122 | ||||
Less Tax at 33% | 16,540 | ||||
NET PROFIT AFTER TAX (CASH AT END) | $33,582 | ||||
Still really good profit!
Ross
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