Tax and Negative Gearing Explained

Negative gearing and taxation can be a mystery for many taxpayers. This article will help unvail that mystery.

What is Negative Gearing?

In its simplist form, property gearing is structuring an investment project to generate either an income stream (positive gearing) or generate a net loss (negative gearing).

Under Australia's taxation laws, income derived from a positively geared invetment is assessable at marginal rates while a net loss generated from a negatively geared investment is an allowable deduction and may be applied against other sources of income.

That is what makes negative gearing so attractive and popular - the tax break derived from negative gearing may be a cashflow which reduces the net cost of a negatively geared investment.

For a FREE list of deductible investment property expenses ==> Summary of deductible items

For a full FREE information kit on investment properties and taxation ==> Taxation & Investment Properties Explained.

By David Maynard CEO
My Tax Zone

Copyright 2014. My Tax Zone.