LOCs and tax deductions

[devo76]

when you claim for say insurance and rates but you use a loc to fund the payments.Come tax time Do you claim the full incured cost plus the interest paid or can you just claim the interest. Eg if you paid your rates in full of $1,300 out of a LOC at 8%. Do you claim the $1,300 plus 8% of the $1,300 or do you just claim the 8% ????

[devo76]

Got a answer via PM. Thankyou

[redwing]

What was it :D

[allblack]

You claim the expense and the interest you paid on the LOC. This is as long as the LOC is just for investment purposes. If the LOC is a mixture of investment and personal debt then it makes things a lot more complicated. The expense would still be deductible however the interest that could be claimed is not so clear and calculations need to be done.