Rental property tax return question?

redcard

Hi I replaced the carpet in my house that I rent out last year can i claim that back on my form 11 as a repair?

o1s1n

Might be an idea to get an accountant to do the return for you? it's totally tax deductible.

Allinall

Capital Allowance @ 12.5% of the cost over 8 years.

https://www.boards.ie/discussion/comment/121186754#Comment_121186754

Strangely enough for rental income tax returns Revenue say the full amount of an accountant fee isn't a tax deduction ... only the portion for preparing rental accounts, but not the portion for actually completing the return.

Bizarre rule.

redcard

I’m well past the 8 year mark so I’m presuming that I can’t claim anything then?

redcard

I tell myself that every year and then just file myself 🙈

https://www.boards.ie/discussion/comment/121186787#Comment_121186787

The 8 year mark starts from the year of purchase of the item, in this case your carpet.

How much was the carpet and install?

Allinall

https://www.boards.ie/discussion/comment/121186754#Comment_121186754

Carpets will be classed as capital expenditure, so will only be tax deductible under the capital allowance rules.

To say it’s totally tax deductible is misleading.

o1s1n

https://www.boards.ie/discussion/comment/121186808#Comment_121186808

I was talking about accountancy fees.

o1s1n

https://www.boards.ie/discussion/comment/121186770#Comment_121186770

Interesting! I'll have to talk to my accountant about that, have had two tell me over the last few years that it's tax deductible when doing my rental income returns.

Allinall

https://www.boards.ie/discussion/comment/121186844#Comment_121186844

That’s weird. Your post was second in the thread, with no mention of accountancy fees at that stage.

For what it’s worth, downtheroad is talking rubbish.

redcard

€980

redcard

€980 was the cost of carpet this includes fitting

https://www.boards.ie/discussion/comment/121186862#Comment_121186862

Revenue Tax and Duty Manual Part 04-08-04

Accordingly, Revenue is prepared to treat accountancy fees incurred for the purposes of preparing a rent account as an allowable deduction in computing Case V income. Accountancy feees incurred for purposes other than preparing a rent account are not allowable as a Case V deduction.

The full guidance:

The deductions allowed in computing taxable Case V income are listed in section 97(2) Taxes Consolidation Act 1997 (TCA). Section 97(2)(d) authorises a deduction in respect of “the cost of … management of the premises borne by the person chargeable and relating to and constituting an expense of the transaction or transactions under which the rents or receipts were received”.

Accountancy fees arguably relate more to the management of the landlord’s financial affairs than to the management of the premises. Also, such expenses may not constitute an expense of the transaction under which the rents were received.  However, it is recognised that the efficient running of a business of letting premises requires that a financial account be prepared.

Accordingly, Revenue is prepared to treat accountancy fees incurred for the purposes of preparing a rent account as an allowable deduction in computing Case V income. Accountancy fees incurred for purposes other than preparing a rent account are not allowable as a Case V deduction.