After finding out recently that if I borrow money to buy income producing shares, I can claim the interest as a tax deduction? and thus now think that I want to apply for a top up loan on my IP to thus reduce my tax bill.
If you?re an accountant would you kindly look at my situation below and give your humble opinion as to whether you think it?s a good idea or not?.
I just did the tax return and my taxable income was $27k and my tax bill was $1700.
If I owe $190k on the IP and the repayment is $920 int only per month; and if I apply for $30k extra loan to buy shares? how much will this reduce my tax bill? I think that the extra 30k loan will equate to an increase of $145 per month extra loan repayment
I currently get $480 pw on the rent on the IP.
I live overseas at the moment and don?t work- living off the interest on my savings in an online saver account (near $500k). This extra loan payment of around $145 per month will thus reduce my monthly income over here. But maybe its going to reduce my tax bill from $1700 a year to nothing perhaps? Does this obviously also depend on how much income I derive from dividends?
Thus, Im paying the extra $145 per month to pay off the shares which are producing me income, giving me a tax benefit and potentially increasing in capital value. As an accountant do you think it?s a good idea for me to borrow the $30k to do this?
I don?t want to pay the ATO any tax if I don?t have to legally but clueless about how to do this? ie I don?t want my disposable income to reduce too much whilst Im sitting on the beach overseas here living off the monthly interest from the online saver account.
I really appreciate your opinion if your able to give one!
If you?re an accountant would you kindly look at my situation below and give your humble opinion as to whether you think it?s a good idea or not?.
I just did the tax return and my taxable income was $27k and my tax bill was $1700.
If I owe $190k on the IP and the repayment is $920 int only per month; and if I apply for $30k extra loan to buy shares? how much will this reduce my tax bill? I think that the extra 30k loan will equate to an increase of $145 per month extra loan repayment
I currently get $480 pw on the rent on the IP.
I live overseas at the moment and don?t work- living off the interest on my savings in an online saver account (near $500k). This extra loan payment of around $145 per month will thus reduce my monthly income over here. But maybe its going to reduce my tax bill from $1700 a year to nothing perhaps? Does this obviously also depend on how much income I derive from dividends?
Thus, Im paying the extra $145 per month to pay off the shares which are producing me income, giving me a tax benefit and potentially increasing in capital value. As an accountant do you think it?s a good idea for me to borrow the $30k to do this?
I don?t want to pay the ATO any tax if I don?t have to legally but clueless about how to do this? ie I don?t want my disposable income to reduce too much whilst Im sitting on the beach overseas here living off the monthly interest from the online saver account.
I really appreciate your opinion if your able to give one!