Are costs incurred (flights, taxi, cruise etc) for the upcoming Property Club Cruise Tax Deductible?
The basics of the tax law around this question states that if you spend money to generate assessable income (rental), then you can claim the expense as a deduction against the rental income but only where there is a direct nexus. However, there is no deduction if the expense is considered ‘preliminary’ to the earning of the income (therefore you must already be a property investors)
For a property investor to get a tax deduction for the cost of a property investment seminar or training they must meet the following conditions when the expenditure is made
- Existing rental income;
- Seminar must include topics on improving rental return, selecting better tenants, protecting against bad tenants, rewarding good long-term tenants, selecting managing agents, managing the managing agents, carrying out repairs (not renovations), choosing tradespeople, managing tradespeople or accounting and tax for rental properties;
- All other issues to do with generating, maintaining and improving the rental income.
Where topics of a program are a mix of strategy, wealth creation and management, then investors will need to determine the proportion relating to management (as per above conditions) and only claim for that proportion.
The Property Club Seminars are a series of educational components for primarily existing property investors, therefore if the upcoming conference is geared towards the relevant conditions the cost would be a likely deduction to existing property investors.