Calculator to separate loan into tax deductable and non tax deductable portion
- Thread starter pb3456
- Start date
http://www.bantacs.com.au/shopping.php
Scroll down the page, it's at the bottom on the right.
Costs $9.95
Scroll down the page, it's at the bottom on the right.
Costs $9.95
Talk to your bank/broker about splitting the loan into sub accounts to isolate the non-deductible from the deductible debt. You may then pay off the non-deductible debt in isolation. While the debt is mixed in one loan, any payments will need to split between reducing both the deductible and non-deductible amounts.
Think you should talk to your accountant. Its not a problem until your audited, but previously the ATO have stated that "any" portion of the loan being used for personal use the interest on the loan is no longer tax deductable. Not sure if this means if you pay back what you have withdrawn you can start from scratch either. This was a landmark case a few years ago in the Supreme Court. ATO won.
You can't pay the personal drawings back while the drawings are mixed in with the property loan (without paying off the entire loan in full).
But you should be able to set-up a sub-account to isolate those drawings in a separate loan account (speak to your advisors) - then you may concentrate on paying off that sub-account loan.
talk to an accountant (disclaimer in case im wrong), but i think its such that each redraw is a extension of the loan for tax purposes
so 200k loan, redraw 1k personal, pay back = 200/201k is tax deductible. redraw 2k investment, pay back, 202/203 is tax deductible. redraw 5k personal, pay back, 202/208k is tax deductible
you would need evidence for the redraws you're claiming are for investment purposes
common mistake, as is having a P&I loan for something you arent 100% sure you will never want to convert to IP (if so, should be IO+offset from start).
so 200k loan, redraw 1k personal, pay back = 200/201k is tax deductible. redraw 2k investment, pay back, 202/203 is tax deductible. redraw 5k personal, pay back, 202/208k is tax deductible
you would need evidence for the redraws you're claiming are for investment purposes
common mistake, as is having a P&I loan for something you arent 100% sure you will never want to convert to IP (if so, should be IO+offset from start).
Sections 19-21 if you want to create your own Excel document.
http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20002/NAT/ATO/00001
http://law.ato.gov.au/atolaw/view.htm?docid=TXR/TR20002/NAT/ATO/00001
Guys,
My mistake is pretty similar to the one by the owner of this thread. I mixed some of my equity increase amount with my existing loan for PPOR (IO) (Loan a/c A).
Should I be keeping my extra funds in the offset of this account or its better to keep all extra monies in the separate PPOR loan account (Loan a/c B) (and leave this account with zero in offset).
Or I should separate that increased amount into new account (Loan a/c C) to make calculations easily while I use these funds for investment in property and shares? If this is possible, is this allright as per ATO? As this amount was mixed with personal debt but then separated later. Please advise
Thanks
Aman
My mistake is pretty similar to the one by the owner of this thread. I mixed some of my equity increase amount with my existing loan for PPOR (IO) (Loan a/c A).
Should I be keeping my extra funds in the offset of this account or its better to keep all extra monies in the separate PPOR loan account (Loan a/c B) (and leave this account with zero in offset).
Or I should separate that increased amount into new account (Loan a/c C) to make calculations easily while I use these funds for investment in property and shares? If this is possible, is this allright as per ATO? As this amount was mixed with personal debt but then separated later. Please advise
Thanks
Aman
To make my question clear, I will use an example
Loan Account A (with redraw facility) -$100,000 consists of $20,000 of deductible (not withdrawn yet/Not used for Income generation yet)
This also has $40,000 of extra repayments sitting in redraw bringing my current loan balance to $60,000.
Can I withdraw my $40,000 in redraw and take loan balance to $100,000. Will this affect deductibility when I I withdraw $20,000 for income prodicing purpose?
Wont ATO says that ($40,000) redraw or draw down is funded by a subsequent increasing of the loan debt thereby affecting deductibility on the $20,000 incoming producing loan amount.
Please advise
Loan Account A (with redraw facility) -$100,000 consists of $20,000 of deductible (not withdrawn yet/Not used for Income generation yet)
This also has $40,000 of extra repayments sitting in redraw bringing my current loan balance to $60,000.
Can I withdraw my $40,000 in redraw and take loan balance to $100,000. Will this affect deductibility when I I withdraw $20,000 for income prodicing purpose?
Wont ATO says that ($40,000) redraw or draw down is funded by a subsequent increasing of the loan debt thereby affecting deductibility on the $20,000 incoming producing loan amount.
Please advise
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