Boarding - Or commercialising one's abode

my thinking exactly. thanks Sim

Hi Sim (and all the helpful peeps contributing to this thread)

It does make sense that as a property ages it requires more maintenance. Our strata seems to be well managed. We have just had a roof replacement and have about 80-100k in surplus.

In your experience(s) would this be enough to cover ongoing maintenace for an aging building (the building is about 40 years old, built in the 70s) without drastic increases in the strata levy ($420 p/q).

Hi Sim - sorry to dig up these old threads. But I just wanted to ask -

How does one determine whether their expectation of profit is reasonable? From what I have read this is something of a grey area with no definite rule. Is this true?

My understanding is that there is no definite rule, as with many things tax related.

If the investment was never going to return an income, the ATO will probably take a dim view of claiming deductions against expenses incurred.

I'd have to do some hunting to find some examples published by the ATO.

So if I understand you correctly, it is the expectation of income rather than profit.

If you can find examples Sim I would greatly appreciate it. I fail at Google.

I wasn't differentiating between income and profit. I take "income" to mean "not a loss". In business, you would generally differentiate between "income" and "cashflow".

Cashflow is the money coming in. Expenses is the money going out. Income is the difference between the two. If this figure is negative, it's called a Loss.

If you are running a business, read up on "non-commercial losses".

There may be a question as to whether you are actually running a business, or you are merely engaging in a hobby.

sure, thanks Sim!