Hi Guys,
I took out a $25k Line of credit on my PPOR in June last year with the view to use the funds as deposits to purchase further properties... I did just that, purchasing two IP's in my home town and starting my 'empire'
Along the course of the year i used the LOC for repairs and maintenance and holding costs but being new to the game and naive on taxation etc, I used some of my funds for PERSONAL purposes I think I may have made a monumental mistake because now come tax time I have NO IDEA how to go about claiming the interest or dividing it up into 'investment' and 'personal'. I'm sure that the accountant will know what to do but I want to be able to make the most of the deductions, without ripping off the system.
How do I go about 'repaying' the personal use side of the LOC so that the interest is wholly tax deductible? Is it as simple as repaying into the LOC the amounts that I took out and clearing it up that way or am I stuck with my mistake? Can the LOC be split in two? I'm a little confused and annoyed that I made this stupid mistake!!!!
Also, Can the LMI that I paid on both investment loans be claimed in the first year or do I need to claim over a number of years?
Any advice would be appreciated
I took out a $25k Line of credit on my PPOR in June last year with the view to use the funds as deposits to purchase further properties... I did just that, purchasing two IP's in my home town and starting my 'empire'
Along the course of the year i used the LOC for repairs and maintenance and holding costs but being new to the game and naive on taxation etc, I used some of my funds for PERSONAL purposes I think I may have made a monumental mistake because now come tax time I have NO IDEA how to go about claiming the interest or dividing it up into 'investment' and 'personal'. I'm sure that the accountant will know what to do but I want to be able to make the most of the deductions, without ripping off the system.
How do I go about 'repaying' the personal use side of the LOC so that the interest is wholly tax deductible? Is it as simple as repaying into the LOC the amounts that I took out and clearing it up that way or am I stuck with my mistake? Can the LOC be split in two? I'm a little confused and annoyed that I made this stupid mistake!!!!
Also, Can the LMI that I paid on both investment loans be claimed in the first year or do I need to claim over a number of years?
Any advice would be appreciated