I have read your book Saving Tax on Your investment Property. To my alarm I find I am doing the wrong thing by depositing money from my super and an accident claim settlement into my line of credit account and later drawing on it for holidays and claiming the full interest charged as a tax deductible expense. I do not earn enough from my rentals to pay tax and have not for nine years as they have been running at a loss.

I have also been paying tax deductible expenses on my credit card and then paying the balance of the card from the line of credit account. I am 69 with a loan on a rental property I wish to sell. At present I would lose a lot as the bottom has fallen out of real estate on the Gold coast. Should I tell the ATO and ask them what they would like me to do about this problem?

ANSWER

Unfortunately, this is a very common mistake  I suggest you talk to your accountants and seek their advice, which probably means giving full information to the tax office soon as possible.