Tax deductible borrowings

[Andrew_A]

I have recently transferred borrowed $$ into an account for investing. I now want to transfer a portion of this money into another investment account. On their journey the funds will travel through a personal account on the way.

Is there a risk of tainting the money for purposes of deductability by doing this? Should I avoid having the money transferring through a business/personal account? I could avoid this if nescessary, though just plan on keeping good records at the moment.

[MJK]

If you can avoid it, dont do it.
If you cant avoid it, keep good records & transaction reciepts.
I believe its a grey area and the jury is possibly still out. :confused:

MJK :D

[Mry]

I have recently transferred borrowed $$ into an account for investing. I now want to transfer a portion of this money into another investment account. On their journey the funds will travel through a personal account on the way.

Is there a risk of tainting the money for purposes of deductability by doing this? Should I avoid having the money transferring through a business/personal account? I could avoid this if nescessary, though just plan on keeping good records at the moment.

If it is going through a personal LOAN account, that would be a big problem.

As for other accounts, there shouldn't be a problem as long as you document the reason for the transfer of funds through these other accounts (ie lower transaction costs, money laundering, swiss bank accounts etc) and maintain the purpose of the money. I would avoid the transfer of money through all these accounts if possible and just make the investment directly.

[julia]

Andrew,
I assume you wouldn't even be asking this question if you hadn't heard of Domjan's case. So let me just add that the judge complimented Mrs Domjan on her record keeping but nevertheless denied her a deduction for the interest on money borrowed for repairs to a rental property because she put the borrowed funds into a cheque account also used for personal purposes so she could write a cheque for the bill.

Julia Hartman
julia@bantacs.com.au
www.bantacs.com.au