Novice Question

From: Geoff Donges

<PRE>Hi Guys

Have been following this fantastic forum for about 3 months now & would like to thank all the contributors.
I would like to ask for opinions, not advice, on a little thing that's bothering me.

I (A) earn 75% & my wife (B) earns 25% of our income. We are in the process of buying our very first IP, a 2 brm unit in Canberra. Following logic from the books I have read etc we took out the loan in both, A & B, names. We have only A on the title of the property which will allow us to claim the costs etc against the highest income earner.
Now I have been wondering about the interest from the loan. Can A claim the whole amount of interest or does this have to be proportional between A & B as the loan is in both names?

Not a great problem for you guru's but one that is bugging me, a newbie so to speak.
Following on from another thread, even though I'm from Canberra, I am just a storeman :eek:), we exist down here too you know !

Thanks guys
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Reply: 1
From: Robert Forward

Yipee, a "lurker" comes out of the wood work.

More of the regular lurkers should come out and post too, it would be great to see.

Anyway to answer the question, the interest would be apportioned accordingly to the way the title is. So if you owe 99% of the property then you get 99% of the tax deductions etc.

Disclaimer: But please see a qualified accountant for decent explanations on this. Or Ask Dale G, or resident accountant.


The Sydney "Freestylers" Group Leader.

PS: "Be Not Afraid Of Growing Slowly, Be Afraid Of Only Standing Still."
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Reply: 2
From: J Parker

Geoff, what do you mean just a storeman? I'm sure the wife doesn't refer to herself as just a wife, or other people on this forum as "just a". God, your job hardly defines what sort of person you are!! Speak up man and be proud of who you are. You are an individual. Occupations have nothing to do with it. Who cares what you do for a crust anyway? I am a mum and proud of it. (and I don't even get paid!!)

In answer to your question, yes, you can claim all of the interest on the loan as a tax deduction. I don't think (correct me if I'm wrong here forum gurus) it really matters when it's in joint names, does it? The highest income earner can claim all of it, can't they?
Happy investing Geoff and don't put yourself and your occupation down again (not on this forum again anyway!!)
"A job does not maketh the man"
J.Parker 2001
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Reply: 2.1
From: Kippy :)

Hi peoples,

Just thought I'd take Robert's advice and come out from lurking and actually begin to post on this amazing forum. I discovered this site 2 days b4 the Big BBQ and since then have learnt HUGE amounts from the regular posters and chat addicts..;-)

Intro to moi: 24,male and another Canberra person!! Musician/teacher and plan to buy my first IP early in 02. Thanks to everyone who posts/contributes here. Hope I can help someone out with my now to be regular posts.

Geoff I have no other info for you re your question but I believe once this proportion of ownership is set it is set for the duration of ownership? Is this correct people.

look forward to contributing,
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Reply: 2.1.1
From: Rick Otton

geoff what do you mean just a storeman.
myself i started off as just a shoe box and people walked over me for years until the lid was taken off and i saw the light
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Reply: 2.1.2
From: Dale Gatherum-Goss


Actually, the tax deductions are in the same percentage as the legal ownership of the property, just as Robert said.

Bye the way, when I first read your post it looked like you wrote that someone was "just a God" I missed the full stop!!!

Have fun, I'm now cleaning up my coffee from all over my desk!

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From: J Parker

Rick , I find it hard to believe that you could be in a shoebox and nobody hear you?!! Cheers old buddy, Jacque :) :)
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Reply: 3
From: Geoff Donges

<PRE>Thanks guys.Your help is very much appreciated.
Not long after posting I read story No 76
"The most common question" from Jan's book
"Building Wealth Story by Story" where Jan
answers my question in her "Authors Note".

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Reply: 3.1
From: Chris Legg

Remember JOB stands for Just Off Broke

95% of the population would be bankrupt in
3 months without their job.

The fact that you have found this website
and property investment has put you in with the 5% who are doing something about it.

Congratulations onwards and upwards

Lifes a beach at Caves

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