Deductible interest

Discussion in 'Accounting & Tax' started by Peachey23, 31st May, 2020.

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  1. Peachey23

    Peachey23 Member

    Joined:
    4th Sep, 2019
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    6
    Location:
    Sunshine Coast
    Hi we have recently made Ppor a ip and purchased a new ppor. Made a mistake of paying off a fair bit on our original ppor and have a query regarding non deductible vs deductible interest.

    ppor bought 2014 $365k
    Paid down to 220k owing in 2018 when we refinanced to a 3 way split loan:
    Loan A $120k fixed p & I (deductible)
    Loan B $100k variable p & I (deductible)
    Loan C $100k variable p & I (non deductible)- we used equity to release this $ and had it fully offset which we used for deposit on new ppor and have since put all savings into the offset account on loan c.

    If we purchased a new ip and used the funds in offset from loan c (now 60k) for a deposit would the interest on this loan then become deductible In future as we have used $ to produce income?


    Thanks
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

    Joined:
    9th Jun, 2006
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    30,842
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    the question is have you borrowed to invest?

    Tax Tip 1: Parking borrowed money in an offset account Tax Tip 1: Parking borrowed money in an offset account
     
  3. Peachey23

    Peachey23 Member

    Joined:
    4th Sep, 2019
    Posts:
    6
    Location:
    Sunshine Coast
    Thanks Terry looked through and have a understanding of this now
     
    Terry_w likes this.