Thanks Terry and Jamie. That clears it up for me. We didn’t delve too deep into the scenarios at university beyond the if your repairing something already there or if your extending or adding to a property.

All our works will be capital improvements and give us a deduction for our tax as depreciation. The other benefit is that we will quickly…[Read more]

Cheers Eddie it all makes sense.

That helps Eddie. Couldn't find an example in my book.So the profit and loss account gets closed off the toe beneficiary accounts.When the trustee actually pays the distribution in real cash theres a reduction in cash at bank and a reduction in the respective beneficiary accounts.Also the beneficiary will need to pay personal income tax on the…[Read more]

I've just some more googling and found: "Undistributed income is taxed in the hands of the trustee at the top marginal tax rate of 45% for the 2006/2007 year, giving a strong incentive to family trusts to fully distribute the trust's income before the end of each financial year." (http://www.cleardocs.com/extra_family_trust.jsp)Does this apply to…[Read more]

Can someone clarify my train of thought.

My parents take out a LOC on their investment property. They then loan me the funds interest free. They have to pay the interest on the LOC they have taken out. The interest therefor is a tax decuction. When I pay back the principle they aren’t generating revenue but only recovering the money they loaned…[Read more]

Just found it. Line of credit.

Thanks for all the replies.

Can someone clarify what is LOC?

I’ve tried searching the forums but I get varying search results with ‘location’ instead of just LOC.

Thanks
Jason