How is the tax deductibility going to be apportioned?

Hiya SS

I have the following scenario
IP1 - Joint ownership
- Loan 1 loan for the property joint name, interest is deductible 50/50
- Loan 2 new loan of $13K joint name, currently 2/3rd used to pay IP2 renovation

IP2 - my name only
- Loan 1 loan for the property, joint name

Questions:
  1. Would IP1 loan 2 interest deductible 100% to my name, or is it 50/50?
  2. I have some repairs coming on IP1 and thinking of using the remainder 1/3rd to pay for this. Would there be tax implications? e.g. Do I need to apportion the interest of IP2 reno and IP1 repairs for loan #2?
  3. If in the future I access IP2 equity (say IP2 loan 2), and buy IP3 under husband name, would this be deductible against my name?
 
Hiya SS

I have the following scenario
IP1 - Joint ownership
- Loan 1 loan for the property joint name, interest is deductible 50/50
- Loan 2 new loan of $13K joint name, currently 2/3rd used to pay IP2 renovation

IP2 - my name only
- Loan 1 loan for the property, joint name

Questions:
  1. Would IP1 loan 2 interest deductible 100% to my name, or is it 50/50?
  2. I have some repairs coming on IP1 and thinking of using the remainder 1/3rd to pay for this. Would there be tax implications? e.g. Do I need to apportion the interest of IP2 reno and IP1 repairs for loan #2?
  3. If in the future I access IP2 equity (say IP2 loan 2), and buy IP3 under husband name, would this be deductible against my name?

1. Neither. 2/3 of interest deductible against IP2 which is solely in your name when you use the other 1/3rd for IP1...Claim 1/3rd against IP1. Until you draw its 100% for IP2 I guess. It is HOW THE PROCEEDS ARE USED that relate to deduction. Not the security or the ownership of the security.
2. I'm confused. But yes if there are multiple uses for a blended loan apportionment becomes a requirement. The more you blend the more difficult this becomes. Best avoided.
3. Refer to my response in caps. Sorry to be shouty.
 
1. Neither. 2/3 of interest deductible against IP2 which is solely in your name when you use the other 1/3rd for IP1...Claim 1/3rd against IP1. Until you draw its 100% for IP2 I guess. It is HOW THE PROCEEDS ARE USED that relate to deduction. Not the security or the ownership of the security.
2. I'm confused. But yes if there are multiple uses for a blended loan apportionment becomes a requirement. The more you blend the more difficult this becomes. Best avoided.
3. Refer to my response in caps. Sorry to be shouty.

Thank you Paul.

Already used some of the IP1 Loan 2 for IP1, I keep records for this so it's easy to apportion it.

Will keep the tax issue on the used of proceeds in mind for next purchases.
 
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