Discussion in 'Accounting, Tax & Legal' started by Simon Hampel, 22nd Sep, 2005.
Use this thread to discuss the article Interest Deductions on Rental Properties and Lines of Credit
Could you please give us an example of the LOC transactions? I am a bit confused as this is my first experience with LOC.
My understanding is as below::
I have LOC1 for PPOR and LOC2 for IP.
When I draw funds from LOC2 I have to pay an interest (INT2) which is tax deductible.
All my income is deposited into LOC1 and to pay an INT2 I need to draw the money from LOC1 and deposit into LOC2.
The interest (INT1) on LOC1 will need to be paid for the funds drawn is not tax deductible, as it is my PPOR account.
Am I correct?
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