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13 Rental Income, Expenses for Rental, Commencement of Rental Income,…
13 Rental Income
Taxable as S4(a)
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includes:
- Maintenance of real property
(Stairways, lobby, corridors, lifts pipes, sewage)
- Maintenance of the exterior part of real property (car parks, playing field, walls + fence etc)
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- rented his premises to related parties
- Ind: relatives;
- Co: one hold >20% ordinary/preference sh of the other:
- Co + Ind: one party is able to influence/control the other
- maintenance/support/ancillary services are comprehensively provided
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Taxable as S4(d)
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a person
- lets out a property
- the maintenance and support services are passively derived from ownership of the property
X S4(a), record at S4(d)
Expenses for Rental
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Initial exp
ie. exp to obtain 1st tenant:
advertising cost, legal fee and stamp duty for 1st tenancy contract, agent's fee
incur to create the source of rental Y,
X incur in pdt Y
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Direct exp that wholly & exclusively incurred in the production of rental Y
ie. quit rent, assessment, int exp
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Capital Allowance (CA)
Only S4(a) can claim CA
reason: it is biz source
- deducted from adj Y to get statutory rental Y
- IF adj Y insufficient: c/f to next YA to be deducted from adj Y of the same rental source
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S4(d) X claim CA
but can claim deduction on:
- cost of replacing furnishing ie. furniture, air conditioner
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