Difference in tax returns

[dwv]

Could somebody please help me with these scenarios:

500K value of IP
485K loan
Taxable income of owner 1 is 60K (and 10K Fringe Benefits) --> tax is 13K
Taxable income of owner 1 is 30K (and 30K Fringe Benefits) --> tax is 6K
Tax deductables (including depreciation) = 30K

Scenario 1:
-----------
Owner 1 owns 50% of IP
Owner 2 owns 50% of IP

Scenario 2:
-----------
Owner 1 owns 75% of IP
Owner 2 owns 25% of IP

Scenario 3:
-----------
Owner 1 owns 90% of IP
Owner 2 owns 10% of IP

1. Which scenario would get the owners the highest tax return in total? I'm guessing scenario 3 but am not exactly sure about the actual computation, though...

2. Would there be an issue with the lender if would-be owners apply for a loan and property is divided 90/10? Will they check if owner1 can actually pay 90% of the 485K loan?

Thanks in advance.

 

[Bushy]

DWV,
Don't forget when the time comes to sell the capital gains tax might make up for any cashflow help that you get from the ATO in the short term. Think Big and Think Long Term.
Regards Bushy

 

[TheCamel]

dwv - no, they won't hold you 90%/10% liable.. no matter what %age the ownership is, the loan is 100% jointly and severably liable (in almost every situation i would expect)

what this means is, you are 100% liable together, and you are 100% liable individually..