LAQC & Rentals - Which Tax Forms to File?

hi there,

Im in the Process of setting up annual accounts for two properties of my parents' LAQC

so far have done:

Notes To Accounts
Operating Statement
Statement of Fixed Assets
Balance Sheet
Minutes of AGM

i have worked out a depreciation schedule and overall loss and wish to attribute it to my fathers taxable income.

i am confused exactly as to which forms i need to fill out from the IRD in order for him to get a tax refund.

would an IR4 and IR10 suffice? or would i also need to file his personal income tax at the same time?

no imputation credits or anything like that to worry about, overall net loss is from property related activities only.

help is much appreciated. cheers.

Underground
Can't help you with your questions.
However my 'experience' with depreciation clawback
when I cashed up sometime ago was not nice. It could be
useful to run the process pass your tax advisers.

cheers

Quote:

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Originally Posted by underground

i have worked out a depreciation schedule and overall loss and wish to attribute it to my fathers taxable income.

i am confused exactly as to which forms i need to fill out from the IRD in order for him to get a tax refund.

would an IR4 and IR10 suffice? or would i also need to file his personal income tax at the same time?

no imputation credits or anything like that to worry about, overall net loss is from property related activities only.

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You will need to file an IR4 (with IR10) for the company, along with an IR3 for your father. If he has previously been filing PTS, then you will need to tell the IRD to change him to IR3 before filing...

You have to distribute the loss on the basis of shareholding in the company, so if both your parents are shareholders, at say 50% each, then they must be allocated the loss in that same proportion.

Quote:

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Originally Posted by stephens.pc

You have to distribute the loss on the basis of shareholding in the company, so if both your parents are shareholders, at say 50% each, then they must be allocated the loss in that same proportion.

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As stated by Stephens, you dont allocate the loss as you choose, it is allocated per the shareholding percentage. The loss from the IR4 gets allocated on pg5 to the shareholders. The shareholders then include that loss in their IR3.

I don't like IR10, I would just file the IR with a copy of the accounts you prepare.

Quote:

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Originally Posted by CJ

I don't like IR10, I would just file the IR with a copy of the accounts you prepare.

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The IR10 ends up in a statistical database where your results are compared against other similar businesses. This is then used to determine who may be due a 'random' audit for not being near the norm.

I have heard that sending in a set of accounts instead of filing an IR10 increases the chance of an audit as nobody at the IRD actually inputs your accounts into the IR10 format, instead they just flag the return as no IR10 provided...

Quote:

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Originally Posted by Steve

The IR10 ends up in a statistical database where your results are compared against other similar businesses. This is then used to determine who may be due a 'random' audit for not being near the norm.

I have heard that sending in a set of accounts instead of filing an IR10 increases the chance of an audit as nobody at the IRD actually inputs your accounts into the IR10 format, instead they just flag the return as no IR10 provided...

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Yeah I worked for a large CA firm and have friends who still do, I agree with Steve - definately wise to include the IR10.