Taxation Question

[jasperjue]

Would appreciate some thoughts on likely tax position.

Scenario
Person A and B take out a joint loan to purchase an IP. They share costs and generally split everything including future capital gains down the middle. I'm assuming that come tax time they can claim half of any losses if negatively geared.

Sooo assuming that bit is ok.

what happens if Person B then moves into the IP and it becomes a PPOR for one half of the investing team. Can Person A still claim on his half of the property as if it were an IP to him. ?.

I am a little confused on this issue so if anyone has been through this or has thoughts on the matter some feedback would be great.

 

[peastman]

It would depend if person A is paid rent by person B.

Basically ATO says an expense incurred in earning an income is deductable and if there is no income you can not claim a deduction.

BTW, I am not an accountant, its just the way I understand how things work.

 

[PrimeCommercial]

I would suggest that any loss incurred by either party would not be tax deductible, even if the party living in the premesis were paying some kind of rent.

Probably come under that all encompasing Section IVA of the tax act.

If one party was able to claim a deduction it would open the flood gates for parents helping kids by a property and claiming a deduction as well.

Just my initial thoughts anyway, I have a tendancy to just shoot form the hip without thinking things thru. Probably best to check with your accountant.