All Topics / Legal & Accounting / 2 LOC’s instead of 1

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  • Profile photo of Fox HouseFox House
    Participant
    @fox-house
    Join Date: 2012
    Post Count: 10

    Hello everyone,

    I have a query about setting up 2 LOC accounts. My concern is that because the borrowing costs are deductible over a number of years this may need to be separated from the purchasing costs when using a LOC to fund it all.

    I'd use one purely for borrowing costs and the second one for purchasing and running costs on investment properties. Is this possible, will it save a headache for the accountant at tax time? Or does it not matter in the scheme of things and using 1 LOC is sufficient.?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    1 should be sufficient.

    You can actually claim expenses out right even if you borrow to pay them. You are looking at interest on borrowings which would be treated differently.

    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

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    I'm with Terry – I can't see why you'd need to complicate it. The one LOC should do the trick.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Fox HouseFox House
    Participant
    @fox-house
    Join Date: 2012
    Post Count: 10

    Yeah that's what my wife thought as well. Thanks for that. 

    Fox House

Viewing 4 posts - 1 through 4 (of 4 total)

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