Search results

That's right. The deduction for interest is against the dividends (income), not the shares.

You'd struggle to convince the ATO that you are in a diamond trading business. Most likely they would classify you as an investor, unless you could show some characteristics of a business. (number of trades, time spent trading, advertising, etc)

No, you are wrong. There is no 'business income' from investing in diamonds. Hoping to one day make a capital gain is not enough. Buying diamonds or antiques or property with the hope of selling in the futire for a capital gain is not a "business". The interest is offset against the asset at...

1) It has to be available to rent for you to claim the deductions. 2) If you have no other income, $100k rent, $120K deductions, you pay no tax. You only pay tax if the income EXCEEDS the expenses. 3) The ATO will not allow you to claim interest unless the asset you have purchased with...

If you read Part IVA, pretty much anything qualifies as a scheme.

A rental property has to be available for rent (not necessarily rented) to claim tax deductions. There are exemptions (time of building etc) but this is the general rule.

No, I'm not confused at all. Let's say you only have investment properties and no other income. You have $100,000 in income, and $120,000 in expenses. How much tax have you paid on that income? Zero. Why? Because the expenses offset all the income, and you have returned a net loss for...

Aah OK, now I get where you are coming from. Good question. I don't have an answer, other than that I think down the track, any capitalisation of interest for private purposes will be looked at under Part IVA

It does decrease tax. The IP interest is increasing, because the loan is increasing. This is because of the choice to capitalise interest, and use the income to pay down non-deductible debt. Higher expenses means lower total income, means lower tax collect.

No, the income and expenses from a property are related. The outcome from your example is a tax deduction of $5000, not income oif $15,000 and deductions of $20,000. But that's not the point. The question relates to interest deductibilty, which is determined by the underlying use of the loan...

It's because the expenses related to that income are deductible against your income. You are confusing income with profit. You can do whatever you want with after tax profit.