All Topics / Finance / Tax Deductibility Question

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of NiadhNiadh
    Member
    @niadh
    Join Date: 2012
    Post Count: 1
    December 7, 2012 - 1:10 am

    Hi Everyone.  This is my first post here.  I just joined as I have just rented out my house that I used to live in and it looks like a great site.

    Anyway I am in the process of amending my home loan to an investment loan and making it interest only but have a question about how much of the loan will be tax deductible.  Firstly when I purchased the house in 2008, the loan balance was approx $240K.  Earlier this year I had a divorce settlement and had to pay my ex $46K, which was debited to the loan upon settlement which made the loan balance $286K and a new loan was drawndown as the original loan was in joint names.  

    Finally I needed to redraw another $12K for debit consolidation bringing the loan balance to $298K which is where it is now.

    So I understand that the $12K is definitely not deductible but was hoping that the $46K payment to the ex wife was as It was a payment for her share of the house.  Does anyone have any thoughts? A guy at HR Block thought it should be.

    Also, is it ok to have just the one loan and just work out the interest deductibility by a percentage method or do I need to have two loans? One for investment and one for the non-deductible amount.

    Sorry if this sounds long winded but was hoping I could get some advice on this.   

    Thanks 

    Neil

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    December 7, 2012 - 2:16 am

    Neil,Y

    ou shoud see a professional. You need to work out the deductibile portion and then you should split the loan. Take the terms of your settlement with you. This is likely to be considered a private expense, but depends.

    Taking tax advise from a guy a HR is like taking nutrition advice from a staff member of McDonalds.

    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
    December 7, 2012 - 2:19 am

    Nice analogy as always :-)

    Which city are you in Neil, you need to speak to a good accountant.

    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 jmsracheljmsrachel
    Participant
    @jmsrachel
    Join Date: 2012
    Post Count: 711
    December 7, 2012 - 2:25 am

    Why is it HR block have such a bad name? Everyone I talk to say they’re no good.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    December 7, 2012 - 7:24 am

    Hi Joe

    Nothing wrong with H & R Block for your ma & pa PAYG Tax return but for something that needs a more complex answer i would suggest a specialist.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856
    December 7, 2012 - 7:35 am
    Terryw wrote:
    Taking tax advise from a guy a HR is like taking nutrition advice from a staff member of McDonalds.

    I wouldn't quite put it like that, at least H&R do tax work but Mickey D's don't do dietary/nutrition.

Viewing 6 posts - 1 through 6 (of 6 total)

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