Hi All
Just have a little example scenario here if anyone would like to go through it
If you have a $400,000 investment loan on an IP, of which $300,000 is for the actual house (so you refinanced to get extra out for personal, the personal extra you cannot claim ofcoarse), how do you work out what interest expense to claim as a deduction?
I understand it in simple terms (proportions) but what happens if you repay extra but that extra is (in your mind) towards your personal proportion. I guess at the end of the day its a scenario to avoid if you can??
Obviously you would be repaying extra just for the peronal "unclaimable" portion of the loan. I wonder if the tax deparmment would be so generous to accept your explanation or if they would say the loan is 1/4 personal and 3/4 investment so you have to work out the interest based on that ratio.
Cheers
Brett
Just have a little example scenario here if anyone would like to go through it
If you have a $400,000 investment loan on an IP, of which $300,000 is for the actual house (so you refinanced to get extra out for personal, the personal extra you cannot claim ofcoarse), how do you work out what interest expense to claim as a deduction?
I understand it in simple terms (proportions) but what happens if you repay extra but that extra is (in your mind) towards your personal proportion. I guess at the end of the day its a scenario to avoid if you can??
Obviously you would be repaying extra just for the peronal "unclaimable" portion of the loan. I wonder if the tax deparmment would be so generous to accept your explanation or if they would say the loan is 1/4 personal and 3/4 investment so you have to work out the interest based on that ratio.
Cheers
Brett