borrowing costs & deductibility qu

[john doe]

Hi everyone,

I'm just wondering what happens with this situation:

Say in Jun, 2002 you take out a LOC (with the equity in your home)in order to get ready to purchase an IP (ie, you intend to use the LOC to pay the deposit for the IP plus other costs). So, in Jun, 2002 you pay the borrowing costs associated with this LOC.

Then you go looking for your IP but you don't find it say until Aug, 2002 (ie, the next financial year).

I'm just wondering, the fact that some of the borrowing costs for this IP were actually paid in the last financial year, rather than the financial year in which you finally purchased the IP...does this complicate matters in terms of claiming deductions for the borrowing costs??? (I hope that makes sense).

Thanks

John

 

[DaleGG]

HI

No, it does not complicate things.

Dale

Originally posted by john doe
Hi everyone,

I'm just wondering what happens with this situation:

Say in Jun, 2002 you take out a LOC (with the equity in your home)in order to get ready to purchase an IP (ie, you intend to use the LOC to pay the deposit for the IP plus other costs). So, in Jun, 2002 you pay the borrowing costs associated with this LOC.

Then you go looking for your IP but you don't find it say until Aug, 2002 (ie, the next financial year).

I'm just wondering, the fact that some of the borrowing costs for this IP were actually paid in the last financial year, rather than the financial year in which you finally purchased the IP...does this complicate matters in terms of claiming deductions for the borrowing costs??? (I hope that makes sense).

Thanks

John