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IP Usage of previous years Rental losses

Discussion in 'Real Estate' started by GunnerGuy, 12th Feb, 2013.

  1. GunnerGuy

    GunnerGuy Index & Property Investor

    Joined:
    26th Sep, 2008
    Posts:
    65
    Location:
    Kuala Lumpur, Malaysia
    All,

    Have the tax rules changed reguarding the usage of previous years accumulated rental losses being used this year ?

    Scenario:
    I have had an IP for many years and have accumulated about $40,000 losses. This year I made a net rental gain of $15,000. I have no wage income. Can I not use these $40,000 previous losses so that this year I make zero gain (and thus no tax) and then carry the remaining $25,000 losses to next year?

    My accountant has told me that I cannot use the previous years losses as the tax rules have recently changed and I can only use a portion of the previous losses in this years tax return.

    Comments would be appreciated.

    Gunnerguy.
     
  2. GunnerGuy

    GunnerGuy Index & Property Investor

    Joined:
    26th Sep, 2008
    Posts:
    65
    Location:
    Kuala Lumpur, Malaysia
    All,

    No replies from anyone on this one so far.

    I now have 2 CPA's looking in to this and still no decision. I thought it was simply - previous rental losses can be used against future gains ??

    Gunnerguy
     
  3. GregR

    GregR Reid Consultants

    Joined:
    13th Jul, 2009
    Posts:
    273
    Location:
    Berwick Vic
    I am not aware of any changes in utilising brought forward tax losses. While I am not a tax accountant, I keep on top of changes as they effect me and my clients.
    There is not a specific rental loss carried forward, it is your overall income loss for tax purposes for that year that is carried forward and can be used against future net income.
    Let me know how you go and if there are any changes.
    Greg
     
  4. GunnerGuy

    GunnerGuy Index & Property Investor

    Joined:
    26th Sep, 2008
    Posts:
    65
    Location:
    Kuala Lumpur, Malaysia
    Yes, fair point, income and losses are combined, however in my case I only have limited investment income (no job) and rental losses the last couple of years and a gain last year. Previous losses CAN be used to cover this years gains and thus reduce/illiminate tax.

    Almost sorted it now. My current 'old' accountant thinks I cannot use previous losses ....... my new accountant does and thus I have a new accountant who seems to be a bit more up to date.

    Gunnerguy.