Rental Property – 82 Moffat Road, Taringa, QLD, 4068. On 15 August 2020, Lindsey signed a contract for the purchase of a

[answerhappygod]

Rental Property – 82 Moffat Road, Taringa, QLD,
4068.
On 15 August 2020, Lindsey signed a contract for the purchase of a
three-bedroom house in Taringa in his own name at a cost of
$1,260,000 subject to a 30 day settlement period in which Lindsey
needed to secure financing and conduct inspections.
Lindsey was then able to obtain a loan of $1,000,000 from NAB at a
fixed interest rate of 3.00% per annum and had sufficient savings
to pay for the balance of the purchase price as well as various
other settlement costs.
Upon settlement of the property on 14 September 2020, stamp duty
and legal fees relating to this acquisition totaling $42,640 were
paid on this date as well as loan establishment fees of $5,150 were
charged and paid. The term of the loan is 25 years.
During his inspections, Lindsey was provided with a detailed
construction/depreciation schedule from the previous owner. The
report prepared by Napier & Blakely Quantity Surveyors shows
that the house was originally constructed in December 2014. The
schedule confirms that the original construction cost of the house
was $414,000.
The house has been permanently rented out since 14 September 2020
(ie. 41 weeks) and Lindsey has received gross rental income of
$36,900 for the current income year.
Expenses relating to the rental property for the 2021 income year
were as follows:
$
As outlined above, interest on the NAB loan for the period 14
September 2020 to 30 June 2021 totalled $23,836.
On 27 June 2021, Lindsey received a letter from NAB offering him
the option of prepaying an additional two months interest on the
loan (for the months of July and August 2021).
As Lindsey had surplus cash available, he accepts the Bank’s offer.
He prepays the additional two months interest totalling $1,215 to
NAB on 30 June 2021. This additional interest prepayment is
not included in the figure of $23,836
shown on the previous page.
The property was rented out partially furnished. On 19 November
2020, Lindsey purchased several items for the benefit of his
tenants. These items are detailed as follows:
$
When the property was initially
purchased, it was obvious that the fence surrounding the house was
badly in need of repair. The fence was literally about to fall
down.
Lindsey engaged the services of a
local fencing contractor to replace the entire fence surrounding
the property. The fencing contractor charged Lindsey $12,150 for
this full service and Lindsey paid this fee on 19 October 2020.
Lindsey chooses not to allocate assets
costing between $300 and $1,000 into a low-value pool. Instead, he
prefers that you depreciate any depreciable assets purchased in
accordance with their effective lives as set out by the
Commissioner of Taxation in Table A of Taxation Ruling TR
2021/3 (refer to Residential Property Operators
67110).
For Division 40 purposes, Lindsey wishes to use the diminishing
value method (wherever possible) to maximise any depreciation
deduction claimed.
For Division 43 purposes, Lindsey wishes to use the prime cost
method.