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Need some clarification onmy situation?

Discussion in 'Accounting, Tax & Legal' started by Hunting_dollars, 26th Mar, 2008.

  1. Hunting_dollars

    Hunting_dollars Member

    Joined:
    28th Oct, 2007
    Posts:
    24
    Location:
    SA
    Hi guys I was wondering if anybody could help me with my situation to see if there is anything I could improve/change. I have an IP with an IO loan in my name only. The interest for this loan is debited from an account which is in my name and my wife's name. Because the interest is deducted from an account which has dual ownership, does it mean that I can only claim half the interest expense as a deduction?

    Also, similarily I have a LOC for investing purposes (mainly shares) which is in my name and my wife's. The interest for this LOC is debited from another dual owned account. So who gets to claim the interest as a deduction?
     
  2. handyandy

    handyandy Well-Known Member

    Joined:
    6th Jun, 2006
    Posts:
    312
    Location:
    Sydney Nsw
    The deductability relates to the entities in whose name the investment is held - the debt is deductable because of the investment.

    If the investments are in your name then both the income and deductions are yours.

    Cheers
     
  3. Hunting_dollars

    Hunting_dollars Member

    Joined:
    28th Oct, 2007
    Posts:
    24
    Location:
    SA
    Thanks handyandy, so the IP is in my name therefore I can claim the interest in full. and the shares are in my wife's name therefore the interest paid is deductable in full by her. even though the both sets of interest are paid from a joint account where my wife and I both deposit our salaries?
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    9th Jun, 2005
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    Sydney, Australia
    Doesn't matter where you get the money from - only matters what the money is for.
     
  5. MattR

    MattR Well-Known Member

    Joined:
    23rd May, 2007
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    Location:
    Sydney
    Hi...let me first introduce myself first, I am from Nigeria.......

    :D