Borrow from LOC for IP repairs and other costs?

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Rob G.
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@rob-g.
Join Date: 2010
Post Count: 70
June 7, 2012 - 2:05 am
amsaini15 wrote:
Rob G. wrote:
Provided the recoupments from the tenants go directly into the LOC, otherwise you contaminate the loan.
Cheers,
Rob
Rob G, you mean to say if rent from tenants is going in the LOC, we can continue to pay rental exoenses like council, water, insurance,etc and interest payment of the loan from LOC. ATO does not see this as a problem? It may still be capitalizing interest if property is negatively geared. Whereas if Rent is going in your personal offset but property expenses coming out of LOC, we need a orivate ruling to prove why we want topayoff our PPOR Loan faster? Is that right? I would really appreciate if a accountant or broker can clarify all these scenerios? Thanks
I didn't say anything about capitalising interest. The senior courts are quite happy with this concept based on the facts of numerous cases. Its up to you and your competent adviser to decide on your facts.
I was referring to borrowing from your LOC to pay an expense for which you will receive an amount back later. Whether by reimbursement or recoupment. This amount is deemed to have reduced your deductible borrowing when received even if you don't pay it back into your LOC (see TR 2000/2 examples).
Cheers,
Rob
amsaini15
Participant
@amsaini15
Join Date: 2009
Post Count: 64
June 7, 2012 - 2:09 am
Terryw wrote:
With water you are borrowing to pay something that you will be reimbursed for. This is different to rental income.
Terry, by water expenses I mean to say service and sewerage charges which has to be beared by Owners.(Tenants pay usage charges only)
amsaini15
Participant
@amsaini15
Join Date: 2009
Post Count: 64
June 7, 2012 - 11:16 am
Rob G. wrote:
I didn't say anything about capitalising interest. The senior courts are quite happy with this concept based on the facts of numerous cases. Its up to you and your competent adviser to decide on your facts.
I was referring to borrowing from your LOC to pay an expense for which you will receive an amount back later. Whether by reimbursement or recoupment. This amount is deemed to have reduced your deductible borrowing when received even if you don't pay it back into your LOC (see TR 2000/2 examples).
Cheers,
Rob
Oh ok I was thinking you are refering to paying for general expenses from LOC (I am thinking too much about it these days ..Ahhh) . I know Terry has confirmed this is correct setup but I cant find any ruling to say that Part IVA will not apply on such arrangement.