mixing personal $ with LOC: will ATO disallow deduction?

[julieo]

Thanks Aceyducey,

I will look back on these discussions and rethink my strategy.

Regards
Julie

 

[Mry]

The offset account idea works if you want to use your principal place of residence as a rental one day.

Brizzy Boy - Ok too, in my opinion from the information you gave. As you can see, it is working well for you too.

 

[Corsa]

It's OK about my accountant too. I don't need to make a phone call but if I needed clarification on these matters I would ask her, provided she isn't asleep when I go to bed. But then she may not know what she is talking about: She has only been in the industry over 40yrs afterall.

Thommo, are you saying your accountant is your wife? And you also use PwC? I am just trying to understand why you are getting so defensive with these posts, in addition to fixated on your position despite contrary information being offered to you regarding other ways of looking at this situation.

Many people are under the false assumption that:
a) many private expenditures are tax deductible

I and my accountant know perfectly well what "tax deductable items" are. What made you believe we don't?

All your posts have led me to believe that you claim both personal and investment related items on your tax which is not legal. If you dont do this, then quite frankly there is no issue and we are talking at cross purposes and have both misinterpreted each others posts.

I reckon the free advice I (personally) recieved on this thread to be worth about what I paid for it. I will return the favour, if I may, and give a little free advice myself.

This comment is specifically designed to point out to the forum that the opinions outlined in this post are worthless and that my point of view has no value or basis.

This is despite the fact that I have pointed out to you that I am a trained professional who has worked with PwC and big accounting firms who's opinions you also clearly value.

I will return the favour, if I may, and give a little free advice myself.

Don't jump to conclusions such as assuming the advice I recieve is NOT from full time, very experienced, tax professionals. Certain comments on this subject were ill-advised and professionally rude. At least I took offence at them, on my wife's behalf.

Thommo

As I pointed out before, I am 99% confident that your accounts are correct and the advice you have received is sound.

But you have made comments on this forum, which have led me to believe that you claim personal items on your tax (ie your wife credit card bills, boat and car purchases) which is not correct.

I have said enough as well on this topic, I have pointed out all the instances where I have felt confused by your intentions and you are still querying what led me to question your posts.

I dont know why I am getting so offended by your posts Thommo but the point is that I am feeling attacked and I feel that your posts are unnecessarily aggressive and appear to be talking at cross purposes to the issue initially raised regarding the deductibility of personal expenditure from a Line of credit.

Best Wishes

Corsa

 

[Sunfish]

With respect Corsa, if you are now with IBM then your speciality is not taxation. Was it you said something like "The majors are OK as far as they go"? Someone did. To say this is totally unprofessional and I am sure nobody on this forum would like to have their professional standards described in this way.

What is so hard to understand about paying a private debt by cheque/credit card and calling it "drawings"? The amount is simply shifted from business profit to private income and full tax is paid.

But you have made comments on this forum, which have led me to believe that you claim personal items on your tax (ie your wife credit card bills, boat and car purchases) which is not correct.
This is a truly absurd statement and hardly worthy of a reply. If I were doing as you say it would be highly illegal. I won't ask why you think I am doing this or why you assume I would be so stupid that I would admit it on an open forum, but I will insist you to cut and paste the passage in which I said it. If you read properly you will see that I admit only to using a biz account but always catigorising it as "drawings". I can assure you this is not illegal.

I too am heartily sick of this argument but I am forced to continue while I am being accused of tax fraud and stupidity and my wife of being an incompetent tax accountant. If you read back you will notice Acey and one other subtly recommended I sack my accountant or at least that they knew more tax law than she. If you're reading this Acey "In your dreams!!"

A very determined Thommo.

 

[Les]

Take five ....

OK, people, - time for a deep breath, and a chance to settle down.....

This thread has been very interesting, if potent, but some comments have been bordering on attacks!! Fortunately, those being targetted have been kind enough to not take too much umbrage.

But it is borderline...... I recognise the value of the debate, and the worth to readers - and it is only this that has allowed the thread to remain open. It is still wavering on that borderline though....

Keep it respectful, or the thread will be locked,

Regards,

 

[possumcreek]

Hi Brizzy boy
When your say situation is like Julie's do you mean that you also don't claim any of the interest on the LOC? You only have problems if you try to claim this interest when it's essentially a loan for private borrowings (ie: PPOR) even though your IP expenses are paid from it.
That's my understanding anyway
Cheers

 

[Mry]

Over breakfast my wife reminded me that our LOC was set up before the Hearts case and therefore is an unreliable example.

Oh man, I completely and utterly missed out the hints that it was your wife who was the accountant! When you said that you could ask her those questions unless she was asleep, I thought it was like me, how I get called at 9pm to be asked if buying stamps to send letters to clients is deductible.

Out of interest, did she say that you had to change anything?

btw kudos to you for posting a correction.

 

[Brizzy Boy]

Hi Possumcreek,
have only had the loc on PPOR since January this year, all my IP's are seperate accounts, I live off my credit card and all expences for Ips are also payed from my credit card. My loc pays my C/card just before the payment is due so do not get charged interest, Loc also pays IPs monthly.
The way I see it work is that I can only claim interest on IPs plus all expences associated with these IPs.
I can not see how I can claim any interest on my loc, but I will leave that up to my accountant. All that I am really rapped in at the moment is seeing my principal on my PPOR drop dramatically, my wife gets on line and checks the balance daily and she is getting so excited.

Regards
John

 

[Sunfish]

Out of interest, did she say that you had to change anything?

No, she is "comfortable" with what we do. But hings were more different then than I realised.

Thommo (read this quickly before he is banned)

 

[Aceyducey]

So Thommo,

Can you restate your position now that you've rechecked it with your accountant/wife.

So we can all understand where you stand.

Please keep in mind that no-one except you have made comments about the skills of your accountant or tax fraud. The rest of us are simply trying to understand what you're trying to say.

And keep in mind that even if you have the best doctor/lawyer/accountant in the world, a second opinion never hurts - if nothing else it verifies that your doctor/lawyer/accountant is correct.

Suggesting a second opinion is NOT at attack on the first opinion, that's simply what's in your head.

Cheers,

Aceyducey

 

[Corsa]

With respect Corsa, if you are now with IBM then your speciality is not taxation. Was it you said something like "The majors are OK as far as they go"? Someone did. To say this is totally unprofessional and I am sure nobody on this forum would like to have their professional standards described in this way.

Thommo, you are correct, my speciality is not taxation, but nevertheless I am a qualified accountant who is able to state with assertion various accounting and tax related matters.

No, I didnt say something like "the majors are ok as far as they go", I stated on two occassions that I am 99% confident your accounts are fine, it is just my/others interpretation of what you have posted here that is in question.

But you have made comments on this forum, which have led me to believe that you claim personal items on your tax (ie your wife credit card bills, boat and car purchases) which is not correct.
This is a truly absurd statement and hardly worthy of a reply.

Thommo, the reality of the situation is you have made these comments in your posts...how can you say my interpretaion of this is absurd when they are written in black & white for interpretation by others? you have also said my opinions are worthless.

As I have said previously, if you agree that claiming personal items on your tax like your wifes credit card, boat and car, is not correct, then we clearly have no issues, no breach of the tax law and clearly it has been a misunderstanding.

I sincerely apologise for any misinterpretation that may have been experienced by you by my posts, I am sorry for that Thommo.

Best wishes

Corsa

[/QUOTE]

 

[Sunfish]

Thommo, you are correct, my speciality is not taxation, but nevertheless I am a qualified accountant who is able to state with assertion various accounting and tax related matters.

No, I didnt say something like "the majors are ok as far as they go", I stated on two occassions that I am 99% confident your accounts are fine, it is just my/others interpretation of what you have posted here that is in question.



Thommo, the reality of the situation is you have made these comments in your posts...how can you say my interpretaion of this is absurd when they are written in black & white for interpretation by others? you have also said my opinions are worthless.

As I have said previously, if you agree that claiming personal items on your tax like your wifes credit card, boat and car, is not correct, then we clearly have no issues, no breach of the tax law and clearly it has been a misunderstanding.

I sincerely apologise for any misinterpretation that may have been experienced by you by my posts, I am sorry for that Thommo.

Best wishes

Corsa

[/QUOTE]In case anyone's confused, nothing I have said should be interpreted as if I participate in or condone tax fraud

There has been a misunderstanding which I have addressed, beyond that I have simply offered my opinion. If you choose to read carelessly, so be it.

 

[Corsa]

Thommo, I havent read carelessly

i have read and reread all these posts to make sure that I am clear on contentious issues before I post.

quoting from your initial posts:

I also have a LOC into which I transfer excess funds in my bank a/c, regardless of whether these were private or taxable incomings. To buy a car I would simply transfer the funds out of this a/c into my bank and write a cheque. My wife's salary also goes into this a/c.

Again I have NEVER apportioned interest or charges. I have claimed the lot.

Why, if you want a Rolex personally, couldn't you pay for it out of the biz and simply call it drawings? Calling it an "investment" is probably fraud but calling it "drawings" is honest and the money is taxable.

These comments specifically have triggered my request for clarification, which i believe you have now provided with your subsequent posts.

All the best Thommo

Corsa

 

[Sunfish]

Everyone wants to put this to bed, me more than anyone else.

Could I please make one small comment?

I posted in part (in reference to the "Rolex")..."Calling it an "investment" is probably fraud but calling it "drawings" is honest and the money is taxable.

"Probably" had no right to be there but in an earlier post someone spoke of "investing" in a Rolex and I merely followed the argument. But if my business was profitable enough to justify a high salary (but not drawn weekly), buying a Rolex would not be unreasonable.IMHO

 

[coastymike]

I think we should all just kiss and makeup. All relationships have there problems. Maybe this will be referred to in future posts as the "rolex incident". I just realised that we have also given Rolex an enormous amount of free advertising space.