Is storage an allowable expense?

[Keith1]

Hi,

I am a NRL and have let out my main home unfurnished. My contents have been put into storage and I am wondering whether the cost of this storage and associated contents insurance are allowable expenses.

Cheers,

Keith

[Telometer]

Costs are deductible only if they are wholly and exclusively for the purposes of your rental business.

It appears that these assets have no role whatsoever in your rental business, so a deduction for their storage appears very unlikely.

[Keith1]

Thanks Telometer, but perhaps I was not precise in my use of the word 'contents'. Some of the items stored would have formed part of furnished accommodation (beds, tables, chairs etc) had the tenant required them. I understand this must be kept separate from my personal items (books, clothes etc), but as this agreement turned out to be unfurnished, I was wondering whether a portion of the cost of storage would be allowable. Does this information change your view?

[Aris]

I would have thought, in case the contents currently in storage have a provable history of usage in your rental business, through past inventories for instance, then such a claim of storage costs would have ground to argue for. Your property had been typically renting furnished in the past, but you had to withdraw contents to storage to offer the property to the ocassional tenant as unfurnished.

Aris

[Poppy]

You'd be really pushing the allowable expense deduction if you stored this furniture forever. How long do you expect to store this furniture as part of your rental business?

[Poppy]

I'm sure the tax knowledgeable members will tell us if this is relevant in a tax sense. Has this furniture ever been part of a let property's inventory?

[Telometer]

I think the tax knowledgeable members are reluctant to stick their neck above the parapet. In answer to Poppy's second question, presumably they haven't yet been; and might never be.

In Aris's situation the costs would clearly be deductible.

In Poppy's first post, they costs would clearly at some point become non-deductible.

A grey area, and OP will have to decide where he sits between the two scenarios.

[Keith1]

Thanks for everyone's comments. In my case the property was advertised as furnished, however my first tenant requested unfurnished and I agreed to this, moving the furniture to storage. As it happens this tenant has subsequently requested and I have supplied some of the furniture I put in storage. The furniture is available to any future tenant who requires the property furnished, or I will store it should they prefer unfurnished. I agree with the last point that this is probably a grey area.

BTW Telometer, what does OP stand for?

Cheers,

Keith

[jeffrey]

What does OP stand for?
Original
Poster
(i.e. LZ member who started the thread).