All Topics / Help Needed! / Need help answering a question

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  • Profile photo of nightelvesnightelves
    Member
    @nightelves
    Join Date: 2010
    Post Count: 48
    July 7, 2010 - 1:37 pm

    Hi guys
    Just wanted to ask, I currently bought an IP(A) with my mum under a joint agreement that we each get a 50% share in the property. Now my mum currently has another IP(B) that has been fully paid for a while ago and is now generating positive CF.

    Lets assume interest is paid at $2100 per month and the rental is $1500 and we have to make up the $600 difference.
    Is it possible for her to use part of the money from IP(B) to pay for all the interest of IP(A)? That way she would be paying less tax. If this is indeed possible will I need to put something in writing to indicate that this is the agreement that we have in place?

    Profile photo of number 8number 8
    Participant
    @number-8
    Join Date: 2010
    Post Count: 333
    July 7, 2010 - 11:30 pm

    Yes it is possible ( but pointless), from the ATO's point of view you are assessed as an individual on your total income less deductions (interest). Your tax will not change (i.e. you have no net gain)….

    http://www.birchcorp.com.au

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    July 8, 2010 - 12:16 am

    If you have a 50% share then you will get 50% of the income or loss. Same with your mum. So mum will use this loss to offset her other income. You will only be able to use your loss to offset your income.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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