First of all. Thankyou to all who answered my other thread. I have another question.
I have joined the westpac online trading site and currently have my general savings account attached to it. This account is for day to day spending and all my income goes into it.
Now i was planning to transfer funds from my LOC into this account for any purchases but i think this may confuse things tax wise.
Just say this account already has $10,000 in it for day to day expenses and i transfer another $10,000 into it from my LOC to purchase shares costing a total of $10,000. Is this legal tax wise or is the fact that the account is also used for non investment purposes. I will no longer be able to claim all the LOC funds spent on shares at tax time due to the mixing of accounts.
I am actually in the process of opening another count only to be used for investing. This will have money put into it for trading from either the LOC or any cash i have spare. All proceeds will go into it also from share sales or dividends. Is this the best way to go.
Also one more thing.Say you put $10,000 into this account from the LOC and spend it all on shares. I assume at this stage all interest cost on the LOC would be deductible. Now what if i sold the shares and the profits went back into the account. Are the interest payments still deductible even though the shares are sold and the proceeds are sitting in the account not the LOC. If that is still ok because any proceeds will be reinvested then that is good. But what if you used the proceeds from the sale of the shares on non investment related items. Will this render the tax deductible interest payments void???
Hope that makes sense guys