Hi all, long time reader, infrequent poster.
We have a rental set up that is due to breakeven or make a modest profit. This is due to increase when lower interest rates are achieved when the fixed term expires.
This same property also has a $40-50k deck replacement due in 2-3 years which of course is capital works.
Previously we have run loses (old rules yay!) and any major capital investment came out of shareholders contributions.
This property and personal home are both held in the same trust.
My question is, if we want to fund this deck replacement out of cashflow (maybe called retained earnings) in a few years time, is there a way to squirrel this excess away without attracting income tax on it each year? As it will be invested into the asset, not going into our pockets.
Or, are we better to borrow $40-50k, picking up the extra deductible interest cost, and repaying the debt over the next few years?
Thanks
Nick
We have a rental set up that is due to breakeven or make a modest profit. This is due to increase when lower interest rates are achieved when the fixed term expires.
This same property also has a $40-50k deck replacement due in 2-3 years which of course is capital works.
Previously we have run loses (old rules yay!) and any major capital investment came out of shareholders contributions.
This property and personal home are both held in the same trust.
My question is, if we want to fund this deck replacement out of cashflow (maybe called retained earnings) in a few years time, is there a way to squirrel this excess away without attracting income tax on it each year? As it will be invested into the asset, not going into our pockets.
Or, are we better to borrow $40-50k, picking up the extra deductible interest cost, and repaying the debt over the next few years?
Thanks
Nick