Q: I have a client who buys and rents out shipping containers. Eventually, they sell the containers to buyers. My question is, should we consider the shipping containers for rent as inventory, depreciable assets, or neither?
A: Since the containers are initially used to make money (through renting them out), they are considered depreciable assets (according to ITAA 1997s 40-40 and 40-30). This means they should be listed as assets and depreciated (according to ITAA 1997s 40-25) over their useful life, typically around 10 years. You can find more details in Private Binding Ruling 17306, which covers similar technical issues.
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