If your SMSF assets include direct property, you will incur two kinds of expenses:
- Operating costs, such as agents commissions, advertising fees, repairs and maintenance, cleaning, body corporate costs, utilities costs, travel, insurance, etc.
- Costs that can be capitalized to impact on the value of the asset (Property acquisition costs, building, renovations and other improvements, fittings and fixtures, etc. and depreciation)
It is important to correctly allocate each incurred expense to ensure that the asset value correctly reflects the costs of acquisition, improvement, and depreciation and that operating costs are correctly coded to an appropriate Expense Account.
- Capitalized costs should be allocated to Investment Account 1-1170 or to one of the 1-1170-nn accounts.
- Operating costs should be allocated to Expense Account 5-1150. When entered as Expenses, these costs can be further categorized by selecting from a drop-down list.
Property Expenses can now be entered as deductions from rental income. Refer to Entering Income from Property.
Follow instructions below to enter expenses that are NOT charged as deductions from rental income.
Recording a property expense via Bank Data Feed Allocation requires selecting All Other Expenses from the Category list, and from that point on the process is almost identical to that described below, except that some fields will be pre-populated.
Click ADD NEW EXPENSE on the EXPENSES tab:
Select the account that owns the property (Fund or a Member Account)
Mclowd displays the Add Expense screen.
Click ADD EXPENSE when the form is correctly filled.