SARS/e-filing and rental income

supersunbird

supersunbird

Honorary Master
Joined
Oct 1, 2005
Messages
63,945
Reaction score
17,537
Location
Garsfontein, Pretoria
So I'm trying to do my e-filing but have a small snag. In august 2008 I bought place that I'm renting out.

So I tick the Y box about recieving other income. Then I filled in the "Local business blah blah (incl, rental income)" sheet with my income from the tenants and then I filled in expenditure the interest and levy and rates.

Now under the Taxable Loss it asks for a code, I've found a code for rental loss which is 2533 and have put that in.

Now when I want to use the calculator to see what I owe or dont owe it gives me a error about my ITR12 form containing source codes which are not valid for an individual taxpayer and thus the calculator doesn't work.

So HELP from anyone who also gets rental income that they had to e-file would be appreciated. Am I using the incorrect code or did I do somethign else wrong?
 
I was told the calculator cant handle complex returns like those with rental income.
Btw, look at the 2009 comprehensive guide.

Edit: The 2533 for a loss is incorrect, use 4211 instead as listed in the comp guide of 2009. Then the calculator will work.
I think the 2533 is old (even though the call centre gives it when you ask and is appears in one of the code books).

btw, thanks for bringing this up - I had accepted the complex explanation from the call centre, but now I know what to expect thus far.
 
Last edited:
larrychang is right with the code - rental loss is 4211. I had my first rental loss that I claimed last year, did it on code 4211 and it also couldn't do that calculation. I got my refund within three weeks, so I'm sure that code is right.

I also did my return the same this year as last year and both years they couldn't do the calculation. (The error message this year is a bit more worrying than last year, because they make it sound like the return was completed incorrectly!).

Btw, I'm actually looking to find out if anyone knows what the threshold is before they do almost a compulsory audit? I know they can audit anyone, but I read somewhere that the moment a refund hits like, R20 000 or something, they do a compulsory audit. anyone know about this?
 
hi everyone ... hope someone can help / give tips.

I am very new at the rental business.

I rent my house out, my bond is paid up.

To declare my taxes, is it as easy as take my income, minus expenses and declare that?

Things that can be minus is any expense, example:

rates and taxes
insurnace
any fixing done around the house (broken things like a geyser)

One thing I want to know is, how can i make a loss on the house if my bond is paid up ?

Buy another house, and minus the interest on the bond account ?

please help.
 
Good morning everyone, hope anyone can help me here.

I want to complete my rental income and rental expenses ...

If i am correctly, by reading the top sections, the rental loss code is :4211, what is for rental income then ?
 
Rental income and allowable expenses

Hi, appreciate some help with this one...

I've received rental income on my Primary Residence for the year 2009/2010. I have had to service a bond during that time... is it a deductible expense, the interest portion? Or is my rent pure profit?

Thanks.
 
You can deduct expenses and interest only for the portion you rented out. I assume by primary residence you mean you too live on the property?
 
Zerocool09 said:
One thing I want to know is, how can i make a loss on the house if my bond is paid up ?
Click to expand...
Be careful deliberately trying to manipulate your income and expenditure to create a loss.

mulderpf said:
Btw, I'm actually looking to find out if anyone knows what the threshold is before they do almost a compulsory audit? I know they can audit anyone, but I read somewhere that the moment a refund hits like, R20 000 or something, they do a compulsory audit. anyone know about this?
Click to expand...
They ask for my documentation every year, nothing more.
 
Maxcottt said:
Hi, appreciate some help with this one...

I've received rental income on my Primary Residence for the year 2009/2010. I have had to service a bond during that time... is it a deductible expense, the interest portion? Or is my rent pure profit?

Thanks.
Click to expand...

what is the purpose for the rental income? did you rent out and live elsewhere?
 
Celine said:
what is the purpose for the rental income? did you rent out and live elsewhere?
Click to expand...

I've actually been living in New Zealand for the year that the house was rented. At the end of the year, the house was sold.
 
Maxcottt said:
I've actually been living in New Zealand for the year that the house was rented. At the end of the year, the house was sold.
Click to expand...

no you don't declare any income or claim any losses. your intentions were to sell the house. if there are intentions to sell or to retire at a later stage you cannot claim losses and therefore sars doesn't tax the profits.
 
i've read that you can only claim for rental deductions if the initial intention of purchasing the property was for investment.
i've recently purchased a place for this and stated all along the way that it was for rental out.

its too risky not to declare rental incomes, cos SARS knows all and sees all :)
unless of course you into the business of picking up cash from your tenants, which is rather dangerous.
 
TheShadow said:
i've recently purchased a place for this and stated all along the way that it was for rental out.
Click to expand...

what exactly do you mean? sorry but you need to speak in english please.
if you purchase your property for investment/trade purposes then you may claim said expenses, but if you have not purchased the property for this very reason and the auditor picks this up be prepared to have your assessments revised. and also be very aware that SARS can go as far back as they want to not only the 3 years. so if you have been claiming since 1999 and they say no, then they will revise right back to 1999.
 
Celine said:
no you don't declare any income or claim any losses. your intentions were to sell the house. if there are intentions to sell or to retire at a later stage you cannot claim losses and therefore sars doesn't tax the profits.
Click to expand...

Hi Celine, I don't understand that. Yes, the intention was to sell the house, and I did sell the house, in the 12th month of the tax year, but during the year I received rental income for it whilst I was out the country. So whilst there may be no Capital gains tax on the sale of my primary residence, I have derived income from it, and surely that must be stated. So in south africa there was an income, which source happened to be rent. But I also had to do repairs to gutters, alarms and gates.

Are you saying that I cannot claim any profit or loss (which is fine), but also have no obligation to declare income and expense from the property?
 
Maxcottt said:
Hi Celine, I don't understand that. Yes, the intention was to sell the house, and I did sell the house, in the 12th month of the tax year, but during the year I received rental income for it whilst I was out the country. So whilst there may be no Capital gains tax on the sale of my primary residence, I have derived income from it, and surely that must be stated. So in south africa there was an income, which source happened to be rent. But I also had to do repairs to gutters, alarms and gates.

Are you saying that I cannot claim any profit or loss (which is fine), but also have no obligation to declare income and expense from the property?
Click to expand...

quite right.
 
Maxcottt said:
Hi Celine, I don't understand that. Yes, the intention was to sell the house, and I did sell the house, in the 12th month of the tax year, but during the year I received rental income for it whilst I was out the country. So whilst there may be no Capital gains tax on the sale of my primary residence, I have derived income from it, and surely that must be stated. So in south africa there was an income, which source happened to be rent. But I also had to do repairs to gutters, alarms and gates.

Are you saying that I cannot claim any profit or loss (which is fine), but also have no obligation to declare income and expense from the property?
Click to expand...

Unfortunately, I have to disagree here.

Even though it wasn't your primary intention, the act defines gross income as any amount received by or accrued to the taxpayer....

The rent was received by you, hence it forms part of your gross income. I don't recall anywhere in the act which mentions you don't have to declare income because of your intention.

You are only allowed to claim the primary residence exclusion on the property due the following paragraph in the 8th Schedule:
A natural person or a beneficiary of a special trust or a spouse of that person or beneficiary must for purposes of paragraph 49 be treated as having used a residence for domestic purposes during any continuous period of absence therefrom (not exceeding five years) while that residence was being let, if—
a) that person or beneficiary or spouse resided in that residence as a primary residence for a continuous period of at least one year prior to and after any such period;
b) no other residence was treated as the primary residence of that person or beneficiary during any such period; and
c) that person or beneficiary or spouse was—
i) temporarily absent from the Republic; or
ii) employed or engaged in carrying on business in the Republic at a location further than 250 kilometers from that residence.
Click to expand...
 
broken1 said:
Unfortunately, I have to disagree here.

Even though it wasn't your primary intention, the act defines gross income as any amount received by or accrued to the taxpayer....

The rent was received by you, hence it forms part of your gross income. I don't recall anywhere in the act which mentions you don't have to declare income because of your intention.

You are only allowed to claim the primary residence exclusion on the property due the following paragraph in the 8th Schedule:
Click to expand...

broken1, Thanks. So in the eyes of SARS it's my primary residence,and even if I'm not there, it is seen to be so. That's all well and fine. The rental income is a totally separate issue. According to you, income is income, and declare it. According to Celine, Primary Residence rental income is not income, and don't declare it... or any costs in maintaining the property. Which makes sense. If SARs considers the house to be my permanent residency irrespective of my physical presence, then in those eyes, "running costs" are not deductible.

I'm probably making mountains out of molehills, considering that the total rent for the year is R103,200 and split between two co-owners of the property, and each portion falls under the threshold I think, for 2009/2010 tax year.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X