Part N: Repairs and maintenance

Did you have repairs and maintenance as a business expense?

No	Go to Part O.
Yes	Read on.

You need to know

This is expenditure shown in your accounts for repairs and maintenance of premises, plant, machinery, implements, utensils, rolling stock or articles associated with the production of income. Any non-deductible expenditure, such as items of a capital nature or amounts relating to private use of an item, included at this part, should also be included at H Expense reconciliation adjustments in the RECONCILIATION ITEMS section item P8 on your schedule. The following information on deductions for repairs will assist you to work out whether you need to make an expense reconciliation adjustment.

Repairs

You may deduct the cost of repairs – not being expenditure of a capital nature – to property, plant, machinery or equipment used solely for producing assessable income, or in carrying on a business for that purpose.

Expenditure on repairs to property used partially for business or income-producing purposes – for example, where the property is also used for private purposes or in the production of exempt income – is deductible only to the extent that is reasonable, taking account of such use.

Where items are newly acquired, including by way of a legacy or gift, the cost of repairs to defects in existence at the time of acquisition is generally of a capital nature.

Expenditure incurred in making alterations, additions or improvements is of a capital nature and is not deductible.

For further information on deductions for repairs, refer to Taxation Ruling TR 97/23 Income tax: deductions for repairs.

Records you need to keep

To support your claim for the cost of repairs, you must keep full details, including source documents, of the nature and cost of repairs to each item.

Completing this part

Step 1	Write your total primary production repairs and maintenance expenses at Repairs and maintenance, Primary production column, item P8 on your schedule. Do not show cents.
Step 2	Write your total non-primary production repairs and maintenance expenses at Repairs and maintenance, Non-primary production column, item P8 on your schedule. Do not show cents.
Step 3	Add up your primary production and non-primary production repairs and maintenance expenses and write the total amount at O item P8 on your schedule.