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Appropriate Section for Debt Deductions (Interest on Borrowed Funds) for Managed Funds.

This post is archived and may not be up-to-date.

Devotee

Views 1122

Replies 5

Last year I borrowed money to invest in a ASX listed managed funds, (ETFs). Previsouly when I had borrowed money for shares I had included the interest as a deduction under the section for Dividends on myTax/eTax. However the managed funds don't give dividends but distributions.

 

Does this mean that I need to include the borrowing costs in a different section? Would this be under 'other deductions'?

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @JakeE


Are you trying to play with our heads here JakeE Smiley Happy

 

Interest for money borrowed for investment purposes may be  declared at either D7 or D8 However based on how I understand your description D8. Thanks too @macfanboy.

 

However JakeE your other post, with additional information, is a good pick up as your correct that an interest deduction may or may not be able to be included and you would need to follow through the various links to understand if it applies to your scenario or not.

Nothing like a good chanadrum.

 

Thanks, we await your next post  Smiley Happy

Cheers
MarkA

5 REPLIES 5

Taxicorn

Replies 4

Item D8:

 

This question is about expenses you incurred in earning any dividend and similar investment income you declared at item 11.

 

 

https://www.ato.gov.au/Individuals/Tax-Return/2019/Tax-return/Deduction-questions-D1-D10/D8-Dividend...

Devotee

Replies 3

Thanks macboyfan

 

Here is another complication. Some of those ETFs are US domiciled and produced foriegn income. Would they be different?

Taxicorn

Replies 2

Yes, they would be reported at as following:

 

20E Assessable Foreign Source Income

20M Other Net Foreign Source Income

 

Where if Income was $200 and deductions were $20

 

20E 200

20M 180

 

Devotee

Replies 1

Thanks for your time macfanboy.
I may have misunderstood the following https://www.ato.gov.au/Individuals/myTax/2019/In-detail/Other-foreign-income/?=redirected_mytax19For...
It seems to me to say that borrowing cost are expensive not included in 20.
“At Deductible expenses: include any deductible expenses that you incurred in earning your other foreign income, excluding any debt deductions such as interest and borrowing costs. For more information, see Debt deductions”

Most helpful response

ATO Community Support

Replies 0

Hi @JakeE


Are you trying to play with our heads here JakeE Smiley Happy

 

Interest for money borrowed for investment purposes may be  declared at either D7 or D8 However based on how I understand your description D8. Thanks too @macfanboy.

 

However JakeE your other post, with additional information, is a good pick up as your correct that an interest deduction may or may not be able to be included and you would need to follow through the various links to understand if it applies to your scenario or not.

Nothing like a good chanadrum.

 

Thanks, we await your next post  Smiley Happy

Cheers
MarkA