Selling a property and repaying loans

[Terry_w]

It is part of a $130,000 loan. The rest was used on another property.
I think I'm fine the more I think about it. There's no risk of " infecting "the funds because I will be paying an amount off not withdrawing. Small risk of paying interest on $50,000 for 12 months that's not deductible but this may be still be deductible. I use to have an account where I parked funds between share purchases. My accounted said this was fine and it remained deductible as all funds were still for investing only and the savings account itself was considered an investment. A poor one sure but still an investment.

Cheers

Your accountant is wrong on that one.

Why not just pay the $50k back into the loan and cop a early mayment fee on this portion. You have a mixed loan in that it was used for 2 purposes, but there is an ATO ruling which allows a mixed loan to be separated into portions on a reasonable basis. So you could pay the $50k portion off by depositing $50k