Ivan poses a question for Brad Beer about how long 20 year depreciation schedules last.
Transcript:
Kevin:  I’d like to answer a question of the show now that came in from Ivan Lim. Thank you for your question, Ivan. We’re directing this one as you requested to Brad Beer at BMT Tax Depreciation.
Firstly, hi, Brad. How are you? Brad’s on the line. G’day, mate.
Brad:  I’m great, Kevin. How are you today?
Kevin:  Good, mate. Here I am talking about you and not talking to you. My apologies.
Brad:  That’s fine.
Kevin:  I’ve sent the question from Ivan through. Let’s quickly read it. “Hi, Brad. Prior to using BMT, I’ve used other quantity surveyors.” Unforgivable Ivan, I will say. “They’ve produced depreciation reports that report up to ten years. BMT’s report lists depreciation for 20 years.
“My question is what do I do with my old reports, which are coming up to the ten-year mark, when I know there are is still depreciation left to claim, mainly on the capital works, Division 43? Do I get another depreciation schedule? This is without any substantial renovation to the property.”
Over to you, Brad.
Brad:  Thanks, Kevin and Ivan. The answer is no, you don’t need to go and get another depreciation schedule. I see you’ve done no substantial renovation to the property. That Division 43 number capital works that you’re talking about there is actually the same number and continues for the full 40-year life of that building. So, if it was new when you bought it, that same number continues.
With the plant and equipment for everything that is left, it’s actually quite easy. Your accountant will be able to calculate what the next year’s numbers are. It’s a very simple science and the quantity surveyor should be able to help you, or the accountant will do it, or I’m happy to give you the way to do it in more detail if you like.
We do project the detailed list for the 20 years, and that’s because most of the plant and equipment has gone by then, but we do actually provide the numbers for the full 40 years of ownership on a different page in your report that you have from us. So, you should never have to revisit and get those numbers back in a different way.
If you do any major work to it or even if you do do work to it these days, I’m a believer in the option of the live depreciation schedule where if you do change something, you should be able to update that.
We’ve built a portal that means that your BMT one, should you change something, you can easily online update them, and as an existing client, you’ll have access to that and we’ll be able to put your schedules in there.
Kevin:  The information about that live site, is that on your website?
Brad:  It is. It’s called My BMT. If you’re an existing client, we can easily give you access, and you can also share the reports with your accountant, as well. He can get access to those as they get updated.
Kevin:  Dumb question, but let me ask it. I am the dumb person in the room. He mentions someone else producing the depreciation reports for 10 years and BMT’s are 20 years. Is that the norm?
Brad:  Ours are 20 years in detail, but they’re actually projected for the 40 years. It’s actually just on a different page of the report. When we first started, we actually did do them for 10 years back many years ago, but we updated the people when they came to us in year 11 and gave them the rest of the numbers because by then, we were well and truly doing them for the full 40 years.
Kevin:  It’s certainly a great tool to be able to do it live and update your records online. They pretty much live live there, Brad.
Brad:  They live in an environment where as you change things, you can update them, and really your accountant is not searching around for invoices at the end of the year. I’ve updated it, we’ve taken the old things out, the new things go in, and your accountant can see those numbers as you change things through the life of the property.
Kevin:  Excellent stuff. Brad Beer, of course, a regular guest on your show and a sponsor too, BMT Tax Depreciation. You can use the button on any one of the pages at Real Estate Talk to contact the guys at BMT Tax Depreciation.
And Ivan, thank you so much for your question as well.
Brad, thanks for your time.
Brad:  Thanks Kevin. Great to be here.