Rental Income Losses brought forward

[greeneman]

I have substantial (to me) almost €75K in rental losses that I ran up in 2007 to 2009.
Properties disposed of long time ago.
I have been carrying the loss forward in my Form 11 each year.
Can I use them in the future and will Revenue seek proof of the losses ?
I don't want to go back over that time. I have the records but really want to dump them.

 

[Gordon Gekko]

You need to be able to prove the losses if you use them so the records are important. It’s the guts of €40,000 that you have so you should be wary of dumping that.

 

[moneymakeover]

If it's in your form 11 I would have thought that was sufficient. Else wouldn't revenue have questioned you already?​

The proof is in your earlier tax returns​

 

[Gordon Gekko]

If it's in your form 11 I would have thought that was sufficient. Else wouldn't revenue have questioned you already?​

The proof is in your earlier tax returns​

Unfortunately not.

Stand back from it and think; sticking something in your tax return means nothing.

If I make a loss today and use it in 20 years time, I have to retain the back-up.

 

[Baby boomer]

Just thinking out loud off the top of my head....
Is there any creative (and legal of course) way of passing that benefit onto somebody with a rental income tax exposure?

 

[moneymakeover]

Unfortunately not.

Stand back from it and think; sticking something in your tax return means nothing.

If I make a loss today and use it in 20 years time, I have to retain the back-up.

Speaking only from experience, when my accountant submits my returns, he claims rental losses and had done for several years now.

We were never asked for evidence.

Evidence if needed would be required in the year person submits a return with a loss I would have thought? No point revenue accepting something unquestioned. And then tax payer tries to actually use that, Revenue says: prove it!

 

[Gordon Gekko]

Speaking only from experience, when my accountant submits my returns, he claims rental losses and had done for several years now.

We were never asked for evidence.

Evidence if needed would be required in the year person submits a return with a loss I would have thought? No point revenue accepting something unquestioned. And then tax payer tries to actually use that, Revenue says: prove it!

Exactly. Remember, it’s a self-assessment system. Numbers get entered on a return and submitted to Revenue without backup. However, they reserve the right to seek backup. And if you make a loss and then years later use it, they’re absolutely within their rights to seek backup for the original loss.

 

[moneymakeover]

The evidence in my case is essentially

Rental income: bank statements
Minus
Mortgage interest : bank statements


All of which should be available from the bank if I ask for it

Is there a limit to number years back revenue can investigate?

Generally speaking, Revenue can only go back five years after the end of the tax year or year of assessment in which the return is made

How to cope with an official audit by the Revenue

What does an official audit entail and what is the best way to handle it?

www.irishtimes.com

 

[Pmc365]

I believe the Revenue can look back for an unlimited period in relation to fraud and neglect, so I was told by the Lecturer a tax consultant with a big accountancy firm, when I studied Revenue Law as part of my law degree. From looking at a decision made by the tax appeal commissioners it also seems to be "guilty until proven innocent". This appears to be the case for decades.

 

[Gordon Gekko]

Yes, but in this case the clock starts when the loss is used.

e.g. I use a loss in 2021 but the loss arose in 2009. They can look for backup for the loss in 2009 because it’s relevant to 2021.

 

[greeneman]

Thank you all so much for your interest and insight. This is truly a great forum.
I guess its not a huge task to carry the files. I am afraid I have tax return files with accounts and bank statements going back to 1994. I can show them the accounts leading to the loss shown each year on the form 11 and the accumulated losses from 2011 that I remind them of every year.
They remind me of all my mistakes.
Per Baby Boomer - I suppose the losses will die with me ? Can I transfer them in any way ?

 

[PaxmanK]

I believe the Revenue can look back for an unlimited period in relation to fraud and neglect, so I was told by the Lecturer a tax consultant with a big accountancy firm, when I studied Revenue Law as part of my law degree. From looking at a decision made by the tax appeal commissioners it also seems to be "guilty until proven innocent". This appears to be the case for decades.

I dump everything after 5 years. Just dont have to room to store it, and I couldnt be bothered scanning every receipt.
Im just not that organized
I hope if revenue come looking they cant penalize me for having only 5 years worth of receipts and accounts, assuming no laws broken by me