Hi everyone, simple question
From reading Steve’s book I was of the impression that all Loan repayments are tax deductable. Is this true or is it just the loan interest that is tax deductable.
Thanks heaps
Fudge111[
]Definitely not Fudge, only your interest is deductible. It’s an expense incurred in earining income. Principal is just paying back what the bank has loaned you to do this.
Jim.EDIT: I can spell definitely, but I can’t spell deductable. Go figure!
That is what i thought too Jim until when i was reading steves book in the charts where he puts weekly loan repayment etc, to find the positive cash flow. He basically gives the impression that the positve cash flow is the only part that is tax assessable, however, if only the interest is deductable then part of the the loan repayment used to calculate pos cf would not be deductable so then you’d be paying more tax than just the amount of pos cf, do you get what i mean?, geez i’m bad at explaining things. lol.
Fudge111Sorry Fudge you confused me with that one!
I think in Steve’s book he bases his loan repayments on Interest Only loans, therefore the amount of repayment that he quotes is only the interest.
Hope this helps a little,Sue [
]“Be careful not to step on the flowers when you’re reaching for the stars”
Fudge, Steve concentrates on cash on cash return, and he includes principal repayments as simply part of your cash outflow. I’m sure if you look carefully (Its been a few weeks since I read it, and I’ve loaned it to a friend {sssh don’t tell Steve!}) you will see that he never implies that principal is deductable. He may be simplifying the details a bit, but cash on cash return is everything when you are maximising your portfolio as Steve has done.
Jim.PS sorry Sue, we’re playing leap-frog here![
]Yeh, thanks Jim and Sue, I wrote a post to Steve too and he backed up what your saying. Broz has the book at the moment and she is in Bendigo Vic, i am in Gisborne, 100km away, so i will have a look when i see her next.
Regards
Fudge111
]
]You must be logged in to reply to this topic. If you don't have an account, you can register here.
