Retirement village operators

[Baa_Baa]

Exactly, let's not over complicate this.

Depreciation is an accounting item recognising decreasing value of an asset over time, usually offset to some extent by maintenance expenses to extend the lifetime of the assets. Normally for most other businesses asset depreciation is a deductible expense, from income. The question is only whether RV's are a normal business or are being singled out for special treatment and allowed, or not, to deduct that depreciation.

I think the denominating fact will be that most of the RV's assets are ultimately some other persons mid-long term accomodation, i.e they have purchased the rights to occupy the property for however long they live. It is reasonable and right that the landlord claims depreciation on those assets that the, in effect renter, has leased out.

[Snoopy]

I think the denominating fact will be that most of the RV's assets are ultimately some other persons mid-long term accommodation, i.e they have purchased the rights to occupy the property for however long they live. It is reasonable and right that the landlord claims depreciation on those assets that the, in effect renter, has leased out.

Yes but the phrase 'reasonable and right' and the word 'taxation' do not often appear in the same sentence for a reason. An RV ILU is, for taxation purposes, 'a residential dwelling'. Thus no depreciation against income can be claimed, and hasn't been able to be claimed for some years.

SNOOPY

[BlackPeter]

Yes but the phrase 'reasonable and right' and the word 'taxation' do not often appear in the same sentence for a reason. An RV ILU is, for taxation purposes, 'a residential dwelling'. Thus no depreciation against income can be claimed, and hasn't been able to be claimed for some years.

SNOOPY

Just playing here devils advocate ...

Would it really be appropriate to allow the RV provider to claim depreciation on residents ILU? These units are brought up to as new standard every time the residents change (and the process is paid by the departing resident). No value lost (unless we add the jitters of the housing market, but that normally jitters upwards).

Any maintenance during the occupancy time is paid by the RV provider, and no doubt, the cost for that are fully tax deductable.

So - why would there be a case for allowing RV providers additionally to depreciate ILU's? The ILU's don't lose value and all costs to keep them "as new" are either paid by the resident or they are tax-deductable anyway.

[Baa_Baa]

Another 'nothing to be proud of moment' for NZ healthcare. WORST in the OECD!

Two charts;

1. "Number of Months from Global First Launch to Public Reimbursement by OECD Country (of all new medicines launched and reimbursed by country from 2012 to end of 2021)"
https://phrma.org/-/media/Project/Ph...rt-FINAL-1.pdf
Attachment 14738

2. "Percentage of New Medicines Reimbursed by Public Insurance Plans by OECD Country (of all 460 new medicines launch from 2012 to end of 2021)
https://www.medicinesnz.co.nz/filead...pe_2022-23.pdf
Attachment 14739

[Muse]

Yeah but if you turn the charts upside down then we become number one

[Snoopy]

Just playing here devils advocate ...

Would it really be appropriate to allow the RV provider to claim depreciation on residents ILU? These units are brought up to as new standard every time the residents change (and the process is paid by the departing resident). No value lost (unless we add the jitters of the housing market, but that normally jitters upwards).

Any maintenance during the occupancy time is paid by the RV provider, and no doubt, the cost for that are fully tax deductible.

So - why would there be a case for allowing RV providers additionally to depreciate ILU's? The ILU's don't lose value and all costs to keep them "as new" are either paid by the resident or they are tax-deductible anyway.

I have to say, in this instance, I agree with the devil!

SNOOPY

[mike2020]

I remember when you could claim depreciation on rentals and it seemed like a bit of con to me. I knew people who bought and sold often enough, made gains, paid no tax and scored depreciation as well.
Mostly R and M is the real cost.

[clearasmud]

I remember when you could claim depreciation on rentals and it seemed like a bit of con to me. I knew people who bought and sold often enough, made gains, paid no tax and scored depreciation as well.
Mostly R and M is the real cost.

No you don't score the depreciation if you make a gain on sale

[mike2020]

I'm going back a while and these people usually held over 12 months at the least.

[ronaldson]

I'm going back a while and these people usually held over 12 months at the least.

I think Clearasmud is trying to tell you that selling at a gain requires you to record "depreciation recovered" on the taxable side of the ledger, if it has been charged as a deductible expense in previous years.