Foreign rental income - Debt Deductions

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(Champion)Champion

9 Nov 2021

Hi, Our client is an Australian tax resident. He has a rental property in New Zealand and rental income from that property. We are not sure where to declare the loan interest expense deduction for that rental property as ATO (QC 64771) quote: Debt deductions, such as interest and borrowing costs, are not deductible for the purposes of this calculation unless they are related to income earned through a permanent establishment in an overseas country. If you incurred debt deductions in earning your foreign rental income and the deductions are not attributable to an overseas permanent establishment, see question D15 Other deductions not claimable at items D1 to D14 or elsewhere on your 2021 tax return. Does this mean that we need to claim the interest deduction under label D15, not 20I?

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