Refinance To Empty out LOC

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From: M D


Dear Guys,

I have been trying to figure this out lately and need your help with the confusion.

Let's say I have an IP in my name and another in hubby's name. EG:

Hubby's IP, stand alone loan=100,000
My IP, stand alone loan=100,000

For deposits on both, we have drawn on LOC
Hubby=25000
Mine=25000

OK, say if some time down the track and hubby's IP increases in exceptional value and we refinance his loan to 150,000.
The 50,000 is then used to empty out the LOC for the deposits. Now, generally since the refinancing (purpose of loan) is to repay the LOC, the interest is tax deductible, no problems here. But my situation is regarding half of the 50,000 which is used as deposit for my IP in my name(25,000). My question is , does this mean we cannot claim interest for the other 25,000 on my hubby's tax return since that portion is used to clear a LOC deposit on an IP not in his name.
I hope you understand what I am on about. I need your advice, thanks!

May
 
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