Break Out costs question

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From: David U


Hi

I recently had to switch out of a fixed 5 year i/o loan and refinance the loan to a variable rate. Cost me $10k, but was an absolutely necessary evil!


Quick questions:

i)
Can the break out costs be claimed in TOTAL in my next tax return?

ii)If not, say I have to claim these costs over 5 years; what happens if I sell the property after say year 1. Can I claim the balance, ie 4/5 * $10,000 = $8,000 in the following tax return or are the costs/write offs gone because I have sold?


Can anybody enlighten me?

Thanks for your help in advance

David U
 
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Reply: 1
From: Dale Gatherum-Goss


Hi David!

I believe that you can claim the break out costs of extra interest in the year that you incur them. That is, when you pay the extra interest.

Have fun!

Dale
 
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Reply: 1.1
From: David U


Dale

Great! Thanks for your help

Regards

David
 
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