Point 5, above re Depreciation Schedule. What I think also needs to be pointed out is that if you have had a depreciation schedule, come time to sell all the 'tax benefit' gained by having the schedule for all the years of the investment property held, has to be added back to the profit made on the sale, and increases the cost of capital gains tax. I'm not sure those who take out a depreciation schedule realise this is the situation come sale time, or whether it is clearly made known to them.

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Technically yes depreciation and capital works deductions need to be subtracted from the cost base. The there is still a benefit to getting the schedule because the amounts claimed as deductions are taken at marginal rates, but the capital gain is at 50% of marginal rates (assuming it's available to you).

Always get tax advice from an accountant!

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