Expenses for attending auctions and meetings
Scenario:
Can I claim deductions against interest income received from my term deposit bank account based on the following facts:
- The family trust sold the unprofitable building last year and kept looking to buy a new building since day one.
- I have been actively attending auctions and meetings with real estate agents in Queensland, New South Wales and Victoria.
- I hold the proceeds in the term deposit bank account until a new building is purchased
- I renew the term deposit every three months because I wish to use this fund for the commercial loan.
Explanation:
Based on the abovementioned facts, it appears that the expenses incurred from attending auctions and meetings are not directly connected with the earning of assessable income from the term deposit (ITAA 1997 s 8-1).
Thus, no relevant connection would appear to exist between the incurring of the expenses and the derivation of assessable income (see Ronpibon Tin NL v FC of T (1949) 78 CLR 47).
Therefore, it is unlikely for the expenses to be claimed as deductions against the interest income received from the term deposit.