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Prepaid interest - Margin Loan

Discussion in 'Accounting, Tax & Legal' started by nikdre, 6th Jun, 2012.

  1. nikdre

    nikdre New Member

    Joined:
    6th Jun, 2012
    Posts:
    1
    Location:
    Perth
    Hi guys I was hoping someone would know the answer to this question.

    For example I owe $10,000 in a margin loan and I wish to prepay it in this financial year. My only option is to prepay it for 12 months but I plan to pay off the full 10k in 6 months.

    Am I allowed to prepay $5,000 for 12 months in advance to receive a deduction this financial year and pay off the 10k loan in 6 months and basically not have to worry about tax deductions the following financial year? Assuming 5k interest at 12 months = 10k at 6months. Does that make sense lol?

    Thanks