Ir3 2020 ?

[richard56]

Hi
In previous year on question ...19 "Did you receive any look-through company (LTC) income?"

The amount I would put in box 19B "Total active LTC income - if this amount is a loss, put a minus sign in the last box." was usually the amount of loss my LTC had made that year.

This year with Ring Fencing coming in the amount I would put in box 19B would have to be zero....correct?

Thanks
Richard

[Anthonyacat]

If you're running residential rentals, you should never have put anything in the Active LTC Income box, with or without ringfencing. Rents are not active income in the eyes of the IRD. Rents via an LTC go into the Rents box on your IR3.

The IRD publishes an IR3G guide each year which should help you work your way through this. I haven't had any reason to read 2020's guide yet, but I'm sure it's helpful, it usually is.

[richard56]

Hi
Thanks
So when would you put something in the Active LTC Income box ?
I don't get the logic...I didn't personally receive any income from residential property...my LTC did.
Thanks
Richard

[Anthonyacat]

Hi
Thanks
So when would you put something in the Active LTC Income box ?
I don't get the logic...I didn't personally receive any income from residential property...my LTC did.
Thanks
Richard

When you had an active business in an LTC.

LTCs are transparent for tax purposes. So really, you did receive the income from residential property

It doesnt make 100% sense really, but it's the setup we have. Read the guides, and if you still dont understand hire an accountant to help out.

[richard56]

When you had an active business in an LTC.

LTCs are transparent for tax purposes. So really, you did receive the income from residential property

It doesnt make 100% sense really, but it's the setup we have. Read the guides, and if you still dont understand hire an accountant to help out.

Hi
Thanks .

So from the guide we get....

Income or deductions from the business activity of an LTC will betreated as if it were self-employed business income or deductionsof the owner....goes in Active LTC Income box 19B

Income or deductions from other sources, such as residentialrental property or interest from investments, are also treated as ifthey were earned directly by the owner, and will be recorded thisway in the owner's income tax return.....goes in Total residential income box 22A


Did I get that correct?

Thanks
Richard