Calculating Interest

[argentina]

I have a PI loan which is for two investments property
eg: Original Loan $200,000 covers
property 1 $123000
property 2 $77000

I can easily ascertain from my loan statements the total amount of interest. however, I need to apportion the interest for both property 1 and 2.
I would do this by dividing 123000/200000 and then 77000/200000 to get the appropriate percentages for each.

My question is: As the original loan balance has reduced down to $198500 due to principal payments I have made should i be recalculating the percentages based on the new loan balance

For example
Property 1 now $122000 (due to principal payments)

I am confused about which calculation to use
122000/200000 (original loan balance)
or 122000/198500 (new loan balance)
or is there something else I should be doing.
perhaps I am over-complicating this and the original percentage is what should be used on an ongoing basis, as long as I don't claim anymore interest than what i have paid.

I want to make sure I do the right thing by the ATO in respect to my calculations

 

[alexlee]

In general repayment of a loan that relates to two separate properties should just be apportioned as well.

i.e. in your case it was originally 123/77 = 200.

Repaying 1,500, the proportion changes to:

122,077.50 / 76,422.50 = 198,500

If one of these are not deductible (i.e. your PPOR, for example) get thee to a broker NOW!

 

[Peter_Tersteeg]

You really need to sit down with a good broker who understands tax deductability and restructure these loans properly, especially if you intend to purchase more property in the future.

 

[Rolf Latham]

I have a PI loan which is for two investments property
eg: Original Loan $200,000 covers
property 1 $123000
property 2 $77000

I can easily ascertain from my loan statements the total amount of interest. however, I need to apportion the interest for both property 1 and 2.
I would do this by dividing 123000/200000 and then 77000/200000 to get the appropriate percentages for each.

My question is: As the original loan balance has reduced down to $198500 due to principal payments I have made should i be recalculating the percentages based on the new loan balance

For example
Property 1 now $122000 (due to principal payments)

I am confused about which calculation to use
122000/200000 (original loan balance)
or 122000/198500 (new loan balance)
or is there something else I should be doing.
perhaps I am over-complicating this and the original percentage is what should be used on an ongoing basis, as long as I don't claim anymore interest than what i have paid.

I want to make sure I do the right thing by the ATO in respect to my calculations

PI
Yucko

IO you can play the game but PI makes it so much more messy

ta
rolf