Ir4 2020

[Beano]

With a multi income property company how deep have you broken up your expenses between residential and commercial ? That is now required !
Interest . When you have one loan that cover both commercial and residential . FIFO of LIFO ?
To track loans over thirty years is a nightmare.
No wage sheets done for staff
No log books for vehicles (pay fbt)
Office cost etc

[Anthonyacat]

With a multi income property company how deep have you broken up your expenses between residential and commercial ? That is now required !
Interest . When you have one loan that cover both commercial and residential . FIFO of LIFO ?
To track loans over thirty years is a nightmare.
No wage sheets done for staff
No log books for vehicles (pay fbt)
Office cost etc

Depending how you structure your loans it should be pretty easy to track through with relatively good accuracy going back only three to five years.

Once you've accounted for all new lending since 2015 the remainder probably isnt hugely material. If it is, you go back another year or two until it's not, then just make up an apportionment.

As for vehicles and staff etc, you just create a justifiable apportionment. Could be based on the value of the assets, or the rental income flow, or how often inspections occur, or.... just needs to be justifiable.

In the end it's not a huge problem, no one is going to care unless your residential portfolio should be making a loss.

I have recommended for a long time now that commercial and residential properties be held in different entities for mental separation and clean GST calculation reasons. As such very few of my clients have this problem - that was lucky!

[Rosco]

Hi Beano

1) Watch normal companies - is that the best structure for you to own properties in? https://cswaikato.co.nz/index.php/la...n-auckland/153

2) As mentioned above, watch residential and commercial being in the same entity. If GST registered, and you then rent a residential for airbnb, suddenly BIG GST issue.
3) Can you structure better. So that residential is making a profit? or break even. This should really been reviewed and discussed a year ago

Wages, vehicles and office - how much of these really relate to residential? You generally wouldn't have staff for residentail rentals, vehicle use is often quite low and office use is often quite low, especially if using a property manager.

Ross