Hello all,
I've got kind of a tax question. Don't worry, I have schedule a meeting with my accountant in 2 days but I would love to know the answer before I go in and see him. I've got quite a few questions for him.
So if I have an investment loan, it's tax deductible.
What I have however is a mortgage that I split into $25,000 chunks. I recently sold an investment property and made $98,000. I've pretty much paid off 4 x $25,000 mortgage splits.
I would like to now use these as investment loans, without the need to restructure/refinance. If I move $25,000 into my CDIA account for commsec and use that to purchase shares will it still be tax deductible?
The issue I can see is the funds were not used to buy shares directly, and have deviated into the CDIA account (not sure how else you would do it as I'm inexperienced). My understanding is the funds from an investment loan have to be used to purchase an investment directly without deviation. Say you're issued an investment loan of $100,000 and you move it into your offset account first before purchasing an investment with it FROM your offset account then technically speaking the funds were never used to purchase an investment. They were used to offset your mortgage and the funds from your offset were used to purchase the investment. That would be fine if the offset only had those funds in it, but if your pay was going in/expenses out then its going to be a headache. Probably a bad example for what I am asking.
Simply put:
Has anyone here used an investment loan to pay into their CDIA account to purchase shares and have you had any issues deducting the interest payments for that loan from your income?
Regards,
VG
I've got kind of a tax question. Don't worry, I have schedule a meeting with my accountant in 2 days but I would love to know the answer before I go in and see him. I've got quite a few questions for him.
So if I have an investment loan, it's tax deductible.
What I have however is a mortgage that I split into $25,000 chunks. I recently sold an investment property and made $98,000. I've pretty much paid off 4 x $25,000 mortgage splits.
I would like to now use these as investment loans, without the need to restructure/refinance. If I move $25,000 into my CDIA account for commsec and use that to purchase shares will it still be tax deductible?
The issue I can see is the funds were not used to buy shares directly, and have deviated into the CDIA account (not sure how else you would do it as I'm inexperienced). My understanding is the funds from an investment loan have to be used to purchase an investment directly without deviation. Say you're issued an investment loan of $100,000 and you move it into your offset account first before purchasing an investment with it FROM your offset account then technically speaking the funds were never used to purchase an investment. They were used to offset your mortgage and the funds from your offset were used to purchase the investment. That would be fine if the offset only had those funds in it, but if your pay was going in/expenses out then its going to be a headache. Probably a bad example for what I am asking.
Simply put:
Has anyone here used an investment loan to pay into their CDIA account to purchase shares and have you had any issues deducting the interest payments for that loan from your income?
Regards,
VG
