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Rental income in property development partnership

Can rental income be offset against a loss in a property development trading partnership or not?


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accounting entries
TN I assume the accounting entries for the "appropriation to FA's" will be:

Debit: cost of sales with cost of WIP say £100k
Credit: WIP £100K

Debit FA additions with market value of property say £200K
Credit Turnover £200K

but I beleive it possibe to keep the property in WIP for a number of years where there is a commercial justification for delaying the sale

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Rental income in property development partnership
Property development partnership- buys properties renovates them then sells them. Also have some houses that they own and rent out.
Does the rental income have to be shown as investment income or could some of the losses from the property development business be offset against the rents received?

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The simple answer to your question as to whether rental income can be set against property renovation loss, is no it cannot.,
You need to analyse the renovation costs to establish if any of the renovation is in fact in the nature of repairs rather than improvements having due regard to dates of lettings

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The partnership is transparent, so the rent and the trading losses are attributable to the partners. The partners then need to decide whether they are entitled to sideways loss relief for tax purposes against their rental profit or whatever other income they have.

If the partners are renting out a property which was previously developed, they may have appropriated it from trading stock to fixed assets, resulting in a deemed trading receipt at market value at that time.

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Totally lacking information and facts. Please expand. ???

Regards Peter

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