Prepaid expenses

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This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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If you prepay a rental property expense -such as insurance or interest on money borrowed -that covers a period of 12 months or less AND the period ends on or before 30 June 2004, you can claim an immediate deduction. A prepayment that doesn't meet these criteria and is $1,000 or more may have to be spread over two or more years. This is also the case if you carry on your rental activity as a business and have not elected to be taxed under the simplified tax system for small businesses. For more information see the publication Deductions for prepaid expenses.