IR3NR Question 21 Other New Zealand income

The profits are taxable if you bought a property for the purpose of reselling it, or are in the business of buying and selling land and/or buildings.

Under the bright-line test for the sale/disposal of property, if you acquired residential property on or after 1 October 2015 and it sold within the bright-line period, any gain will need to be accounted for.

The bright-line period for:

• properties purchased/acquired on or after 1 October 2015 through to 28 March 2018 inclusive is two years
• properties purchased/acquired on or after 29 March 2018 is five years.

The profits may also be taxable if you:

• are a builder and improved a property before selling it

• developed or subdivided land and sold sections

• had a change of zoning on your property and sold it within 10 years of buying it.

Print the total profit in Box 21.

Complete a Property sale information (IR833) form for each property sold/disposed of and include it with the return. The form explains how to calculate and correctly return the resulting profit or loss. You can download the form from our website www.ird.govt.nz (search keyword: IR833). Complete the form even if the details have been included in a Financial statements summary (IR10) or set of accounts.

If you’re not sure whether your income from the sale of land and/or buildings is taxable, please contact Inland Revenue.

The profits are taxable if you bought:

• and sold shares or other property as a business

• shares or other property for the purpose of resale.

Print the total profit in Box 21. Attach a note with the details of your income and expenses from these sales to your income tax return.

If you’re not sure if your income from the sale of shares or other property is taxable, please contact Inland Revenue.

If you sold or disposed of a depreciated asset for more than its adjusted tax value, please read the guides Depreciation (IR260), General depreciation rates (IR265) or Historic depreciation rates (IR267).

If you made a loss and can show that if you’d made a profit it would have been taxable, you may be able to claim the loss as a deduction. If the property was taxable under the bright-line test, any excess deductions can’t be claimed unless they can be offset against net income from other property sales. The Property sale information (IR833) form has more information on this.

For more information on property sales see the guide Buying and selling residential property (IR313).

Enter the loss in Box 21.

If you’re not sure if you can claim a deduction for a loss, please contact Inland Revenue.

If you have an investment in certain PIEs that use their investor’s prescribed investor rate (PIR) to calculate the PIE’s income tax, you’re required to use the 28% PIR for the 2019 income year. This will mean that the income does not get included in your tax return.

If the PIE has deducted tax at a lower PIR, you’re required to pay the tax shortfall. You’ll need to attach details to the return.