Rental income
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I've got some homework & I'm struggling with a part of it if anyone can help? I had to miss a week of college and that's when they covered it. Here goes:<BR><BR>Rental Income £24,000<BR><BR><BR>Expenses:<BR> Letting Agent's commission 2,400<BR> Advertising for tenant 250<BR> Repair kitchen 125<BR> Council tax 900<BR><BR> (3,675)<BR>
<BR>Net Income due £20,325<BR><BR><BR>The above information is given & I've got to prepare a calculation of rental income for 2004/2005. The flat is furnished so there must be a 10% wear and tear allowance on rent receivable (£2,400), and as all the expenses seem ok I think it's just the £20,325 minus £2,400 = £17,925.<BR><BR>Does this look right or am I missing something?<BR><BR>(ps - I set this out well when I typed it but I don't know if the calcs will line up & make sense once I post it - here we go)
<BR>Net Income due £20,325<BR><BR><BR>The above information is given & I've got to prepare a calculation of rental income for 2004/2005. The flat is furnished so there must be a 10% wear and tear allowance on rent receivable (£2,400), and as all the expenses seem ok I think it's just the £20,325 minus £2,400 = £17,925.<BR><BR>Does this look right or am I missing something?<BR><BR>(ps - I set this out well when I typed it but I don't know if the calcs will line up & make sense once I post it - here we go)
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Rental income
You should always take out the council tax before calculating the wear and tear allowance.<BR><BR>So in this case, wear and tear = (£24,000-£900) x 10% = £2,310<BR><BR>But don't forget to still include the council tax as one of the expenses, it's only taken out for the wear and tear calculation!<BR><BR>And from there you should be able to work the rest out!<BR><BR>Hope that helps!<BR><BR>James0 -
Rental income
Thanks James. That's really clear. Cheers0