How Form 4797 Depreciation 2024-2025

Welcome to Washington Brown. Today, we're going to practice what we preach. I'm going to show you how we depreciated our own commercial property. Hi, I'm Tyron Hyde from Washington Brown, and when I first bought this property in the Sydney CBD two years ago, it looked like this. It was ugly, rundown, and in desperate need of some TLC. But the location in the heart of the city was perfect, so I got a designer to create a new floor plan and hired a builder to carry out the work. It was a substantial fit-out, including new paint, carpet, workstations, and partitions. We even installed a new kitchen in the reception area. At the end of the project, the builder gave us a tax invoice for $200,000. Now, I've seen situations where owners take the fit-out costs and multiply that by two and a half percent per annum. That's the rate at which you can claim general fit-out costs. Now, if I did that based upon our $200,000 fit-out, I would only be able to claim $5,000 of tax depreciation. Instead, I asked the builder to break down the cost relative to the appropriate trades, like carpet, air-conditioning, workstations, etc. We allocated a portion of the builder's cost, such as management fees, to each of those trades. And guess what? Our depreciation in the first year alone was $35,000, not $5,000. Now, that's where knowing the construction cost and tax law together can make a world of difference. So there you have it, from this to this. Yes, it was expensive, but being able to claim $35,000 in depreciation in one year alone was a significant boost. That's all from this QSR corner. I'm Tyron Hyde from Washington Brown. See you next time, and if you like this video, please leave a...