Forced landlord, not doing what I should be

Yes lesson learned. I guess a lot of people are in a similar boat. I will sort it.
 
JohnMc said:
2013 2014 2015 2 2016 2017 2018
Rental Income 2,700 10,800 10,800 11,100 12,300
Mortgage interest deduction 2,200 8,735 8,100 8,599 7,827
500 2,065 2,700 2,501 4,473
Other expenses 1,229 2,314 2,314 2,314 2,314
Rental profit / (loss) -728 -249 386 187 2,159
Losses carried forward 0 -728 -977 -591 -403
Total profit / (loss) -728 -977 -591 -403 1,756
Tax rate 20% 0.2
Tax to pay 351.16
Click to expand...

If you did not register the property with the RTB in 2013-2017 then you can't deduct the Mortgage Interest - or do I have that wrong?
 
2013
Rental Income 2,700
Mortgage interest deduction 2,200
500
Other expenses 1,229
Rental profit / (loss) -728
Losses carried forward 0
Total profit / (loss) -728
Tax rate 20% 0.2

2014
Rental Income 10,800
Mortgage interest deduction 8,735
2,065
Other expenses 2,314
Rental profit / (loss) -249
Losses carried forward -728
Total profit / (loss) -977
Tax rate 20% 0.2

2015
Rental Income 10,800
Mortgage interest deduction 8,100
2,700
Other expenses 2,314
Rental profit / (loss) 386
Losses carried forward -977
Total profit / (loss) -591
Tax rate 20% 0.2

2016
Rental Income 11,100
Mortgage interest deduction 8,599
2,501
Other expenses 2,314
Rental profit / (loss) 187
Losses carried forward -591
Total profit / (loss) -403

2017
Rental Income 12,300
Mortgage interest deduction 7,827
4,473
Other expenses 2,314
Rental profit / (loss) 2,159
Losses carried forward -403
Total profit / (loss) 1,756
Tax rate 20% 0.2
Tax to pay 351.16

Rough calculations so far...
 
  • Like
Reactions: jim
If Revenue audit you, and you cannot provide receipts for capital purchases, wear and tear, repairs etc..........how are you going to explain that away?

For capital purchases you offset 12.5% over 8 years.
For repairs etc you offset them the year in question, but u do need to show receipts and proof if asked.

If I was a Revenue person and looking that you back registered 5 years and are tell me that with rental income of €45,000 from January 2014 - December 2017 and you are telling me that the tax liability over this 4 year period is €351.16 I would be auditing you for certain.

Your mortgage interest relief claiming is very high, I would have my doubts you are correct in this.
Purchases pre-letting are not permitted.
You must have receipts for everything you are claiming.
Are you correct in that all your income is at the 20% rate of income tax?
You haven't included PRSI and USC charges either.

You are paying an effective tax rate of three quarters of one percentage of rental income of €45,000. I am paying approximately 30% on rental income for tax. Your figures are screaming out to be audited.

If they are correct, lucky you, but you better have the proof to back it all up. If you audited and can't prove everything, there's no outlet for you and Revenue will go after you for penalities and interest etc to the full extent of the law.
 
It's seldom that a form 12 is audited. I was also surprised that your interest was so high but I see some have checked it and they seem to stack up.
 
Yes aristotle I am claiming capital allowances (wear & tear) and it is part of other expenses or other deductions I should probably call it.
Elacto I have been paying 22 or so a month mortgage life insurance since I got the property. Management fee is 1000 per annum.
I hear you cliqueentour, I have taken my interest payments from the latest statements I got from the bank, they are correct and I can prove this easily. Other expenses can be proved easily too such as management fee and mortgage life insurance. Probably a bit more difficult for some of the W&T capital allowances stuff but I can try root a few things out. I was one of those people being screwed by the banks with a crazy high standard variable rate for years, hence my interest payment is high.
 
Just to echo what others have said John. You need to have receipts for the purch ofbthe items you are claiming w&t for...thats my understabding. And in general you need receipts/supporting docs for everything.

If you dont and you are audited i assune youll need to pay bk revenue plus int and penos.
 
Thanks Jim, noted that point. I will try do as much of that as I can to make sure I have answers if they need.
 
JohnMc said:
Yes aristotle I am claiming capital allowances (wear & tear) and it is part of other expenses or other deductions I should probably call it.
.
Click to expand...

John you're getting it together. Can you just do one post with a list for the wear and tear please. Right down to the kettle etc. We'll hav a look over that to see if you're missing anything.

Also delete a couple of the posts where you were only getting the figures correct, go edit, delete and put a . instead.
 
cliqueentour said:
If Revenue audit you, and you cannot provide receipts for capital purchases, wear and tear, repairs etc..........how are you going to explain that away?

If I was a Revenue person and looking that you back registered 5 years and are tell me that with rental income of €45,000 from January 2014 - December 2017 and you are telling me that the tax liability over this 4 year period is €351.16 I would be auditing you for certain.
Your figures are screaming out to be audited.

If they are correct, lucky you, but you better have the proof to back it all up. If you audited and can't prove everything, there's no outlet for you and Revenue will go after you for penalities and interest etc to the full extent of the law.
Click to expand...

Stop scaring him. And you're way off. He'll do a return per year and unless he's randomly audited he's not likely to trigger an audit. Even if they do audit him he's nothing to worry about. Not once his figures are correct. And he doesn't need to worry about having all the receipts. Sure he's supposed to have them. But for example for Wear and Tear, as long as he puts reasonable value to the couch and fridge I don't see how revenue are going to have a problem with it. Revenue understand that a man that emigrates for work not intending to rent may not have the receipt for the kettle he purchased in Argos 7 years ago. Also a lot of items may have been purchased on credit or bank cards so John can go back and have a look at those.

The most important thing he does now is get an accountant to deal with all of it once he has the figures together.
 
JohnMc said:
2013

Other expenses 1,229

2014
Other expenses 2,314

2015
Other expenses 2,314

2016
Other expenses 2,314

2017

Other expenses 2,314


Rough calculations so far...
Click to expand...

Please break these down, and I wouldn't bother with the tax/profit scenario at all yet.
 
Hang on Bronte. For w&t, are receipts required or not?
If they are then he can only claim what he has receipts for.
If they are not then its open season for everyone (within reason) and I will certainly be adjusting my form 12!
 
I will do that Bronte.

RTB underway. Need to get BER which is in process. Better late than never...
 
You must log in or register to reply here.
Back
Top