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Tax Tips 4

Posted by Paul Wilson

Warning on Deductible Lines of Credit

Interest is only deductible if it is incurred on a loan where the funds borrowed were used to produce assessable income. This means that if you bank your wages into your rental property line of credit then draw the money back out to pay off your credit card at the end of the month you will lose deductibility on the amount re borrowed to pay off the credit card. If you keep this up in about 5 years time you will lose all deductibility for the loan.

Please seek advice on your particular circumstances before acting on this information.

For more helpful Tax tips go to www.bantacs.com.au

Warning on Deductible Lines of Credit

 Interest is only deductible if it is incurred on a loan where the funds borrowed were used to produce assessable income. This means that if you bank your wages into your rental property line of credit then draw the money back out to pay off your credit card at the end of the month you will lose deductibility on the amount re borrowed to pay off the credit card. If you keep this up in about 5 years time you will lose all deductibility for the loan.

Please seek advice on your particular circumstances before acting on this information.

 For more helpful Tax tips go to www.bantacs.com.au


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