The intention of making a profit (ie, rent > expenses / dividends > expenses). Essentially the expense must be incurred in earning the income with the activity being intended to earn a profit.
But when? In 10 years time? if yes....can be offset against other income.
It is all legit under the law if the intention is to make a profit.
There are some people out there in business that have the intention to make a profit without the slightest chance of doing so but they do it with the best intentions....yep...they can offset their business losses.
You won't get an argument that it is unfair, full deductions and 50% CGT...BUT...it is 100% legal and even if you gear up to the eyeballs in shares / property and the assesable income is small....if you have the intention to make a profit....all deductible / off set / income account.
That is the rules and the ruling tells us the rules.
In the good old / bad old days before CGT I cqan tell you first hand the practice was;
- Gear to eyeballs on shares / property
- Claim huge revenue losses and offset against income
- IF, IF it came near profitablr
- SELL, take NON TAXABLE CAPITAL GAIN
- buy another and gear higher
- rinse and repeat until filthy rich
- keep going :)
Look at your first post and you will see that it did not convey the principle that it is all on the revenue account and has nothing to do with the capital side of things.
