Tax treatment of lost deposit

From: Lotana Von Amor


A couple of tax questions to experts:

If I buy an IP OTP paying 10% deposit (borrowed) and then do not settle losing the deposit, how is the deposit, interest on borrowed funds, and interest paid to the vendor for missing the settlement day are treated by the OTO? Are they deductible, a capital loss?

Lotana
 
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Reply: 1
From: Dale Gatherum-Goss


Hi Lotana

>A couple of tax questions to
>experts:


Is it OK if I answer instead?


>If I buy an IP OTP paying 10%
>deposit (borrowed) and then do
>not settle losing the deposit,
>how is the deposit, interest
>on borrowed funds, and
>interest paid to the vendor
>for missing the settlement day
>are treated by the OTO? Are
>they deductible, a capital
>loss?


It is a Capital Loss, I am afraid, which will carry forward until such time as you have a Capital Gain to offset against it.

And, I just have to ask . . . is the OTO the Oztralian Tax Office? I love it!!!!!

Have fun

Dale
 
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Reply: 1.1
From: Lotana Von Amor


Dale,

Modest experts are so rare these days...
Thanks you for the answer. Not that I am in this situation (not yet), but it is good to know all the options when it comes to the settlement in 12 months and unit prices may be much lower than the purchase price. OTO is just another TLO (three letter ocreanym):)

Lotana
 
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