Deductible interest from income producing properties

For income producing properties (e.g. rental investments) is all of the interest deductible regardless of the rent recieved and any other expenses?

For example, if $15k interest is paid, is the full $15k deductible regardless if $10k is received in rental income or if $20k is received in rental income?

 

If the rental income is at commercial/market rates then I believe you can claim the full interest deduction (assimuing the loan which the interest is tied to is fully deductable)

 

It depends in the interest is related to the generation of that income. Being negative geared is no barrier though

 

Yes, the interest would be associated with the loan for the investment property. Thanks!

 

Will this be in a company? Does the company have other income?

 

If interest was incurred to acquire the property, its acquiistion costs or any outgoings (excepting making loan paymnets) and the property produces rent at a market value then all the interest will be deductible. As well as other outgoings that are deductible. If this produces a loss this explains what negative gearing is. The loss can be applied against other additional income (eg salalry) in many cases hence that tax benefit. Or the loss is carried forward to offset future income perhaps.

 

In this specific circumstance I'm thinking about a property that would be held personally. Does it matter though? Is interest not deductible if the loan / property is held in a company?

 

The taxpayer entity doesnt change deductions normally. Provided the entity incurs the cost. For example if you borrow and a trust owns the property the trust may not have incurred any interst and the deduction is lost. It is necessary for the borrower to onlend to the trust in such cases.

 

Thank you! That explaines it clearly!