Interest in Advance

[Liverpool St]

Hi All,

I have a number of properties crossed in a loan with Members Equity and two unencumbered. I am now planning to sell the two unencumbered properties. If I pay interest in advance on the crossed properties will that offset any capital gains on the sale of property?

Thanks

 

[Rolf Latham]

I will leave it to the accountants

Id say no.


one is cashflow expense, what you are looking for is a capital expense

ta
rolf

 

[Aaron_C]

Are they truly unencumbered or actually crossed but with 'no' loan on it?

 

[alexlee]

If the interest is deductible (e.g. if all the properties under the crossed loan are investment properties), then yes, capital gains can be offset with income losses. This is because capital gains forms part of your ordinary income.

Capital LOSSES cannot be offset with income gains.

 

[Liverpool St]

Thanks All,

Alexlee, Yes the properties are IPs. I was thinking what you said as the capital gains would form part of my income but wasn't sure

However, I just rang Member's Equity and they don't offer an interest in advance component.

Thanks again

LS