Labour / NZ First Government

[777]

Your investment should stand on it's own merit. It should be able to show it is going to make a profit going forward. When that happens then you write off your losses against those profits and then start paying tax from that point on. If it doesn't then why should you get to be able to write off losses against your other income?

[fungus pudding]

Your investment should stand on it's own merit. It should be able to show it is going to make a profit going forward. When that happens then you write off your losses against those profits and then start paying tax from that point on. If it doesn't then why should you get to be able to write off losses against your other income?

Because businesses pay tax on profit - not turnover.

[777]

Because businesses pay tax on profit - not turnover.

Where does my post say anything about turnover?

It is all about "negative gearing".

[minimoke]

Your investment should stand on it's own merit.

If investments were to stand on their own merit there would no innovation or development. Sometimes you just have to take an educated punt and put your money where you think its going to get the best overall return.

If it doesn't then why should you get to be able to write off losses against your other income? .

Because that's how business and accounting works. Income - expenses incurred = profit / loss. And tax gets paid on profit.

[777]

If investments were to stand on their own merit there would no innovation or development. Sometimes you just have to take an educated punt and put your money where you think its going to get the best overall return.

Because that's how business and accounting works. Income - expenses incurred = profit / loss. And tax gets paid on profit.

Do you know what "negative income" is?

[minimoke]

Do you know what "negative income" is?

You mean a "loss"?

[777]

You mean a "loss"?

No. It is the writing off that loss against other income such as salary.

[minimoke]

No. It is the writing off that loss against other income such as salary.

You dont write off losses, as such. You write off value of an asset when required. You incur expenses, and if they are greater than income then you have a loss. The loss isn't written off, it just is. No one likes a loss.

Its not hard. Salary plus rent (Income) less expences (rates / insurance/ interest etc) = profit or loss. As mentioned earlier you pay tax on profit. With an accountants help you can carry that loss through to future years so really isn't written off. It keeps living until finally accounted for.

(Best we get Beagle sniffing around here - he can be more precise on accounting treatment.)

[777]

Simply I do not accept that a loss incurred on an investment in property should be deducted from a salary to give you a tax refund.

[minimoke]

Simply I do not accept that a loss incurred on an investment in property should be deducted from a salary to give you a tax refund.

You may not accept it. But I think you are confusing "expense" with "Loss"

Surely a person is entitled to do whatever they can to earn an income. If they have skills and time they can sell those to someone for a wage or salary. If they are prepared to take a risk to house some people in return for rent then surely good on them. Can you accept that sometimes expenses are incurred in generating an income? Why would you want people who earn less (income less expenses incurred in generating that income) to pay more tax than those who actually earn more.

Given the apparent housing crisis shouldn't we be doing all we can to encourage people into property that can be rented to people?