Peter R. Belinfante & Co. Pty. Ltd.	Queries to :	ITax Solutions		13-Feb-01
Chartered Accountants Tel (02) 9319 2504        Email : belinp@idx.com.au
{Step 1}		Enter Your Name Here
SIMPLE NEGATIVE GEARING MODEL/ILLISTRATIVE EXAMPLE		REAL ESTATE
	Sample Data may be over-written		Financial Year :
{Step 2  Enter Financial Year End}			30-Jun-01
	PROPERTY ACQUISITION BUDGET
Step 3 Enter Property Purchase Price			500000
Step 4 Check Disbursement Budget	Stamp Duty estimate	17990		NSW Rates
Enter Legal fees and other costs	Enter Legal Fees -conveyance	600
	Disbursements say	500
	Non-Finance Costs		19090
Enter Loan Application & funding costs :
Enter Application and Valuation fees		300
Enter Loan Duty		200
Enter Legal fees re Loan -your solicitor		350
Enter Legal fees re Loan - Financial Institution		250
Total Borrowing Costs			1100
On-COST ESTIMATE			20190
TOTAL ESTIMATED COST			520190
Step 5 Enter Up front Cash Outlay		150000
Other Funds contributed eg family		0
Total Non-Bank Finance			150000
0
Total Finance Required Date, Amount			370190
	FINANCE MIX
	% Interest Only	Interest Rate %	BORROWED
Step 6 Enter % Interest Only and Rate 1st 12mth	0.5	7.5	185095
Balance assumed to be principal and interest	0.5	8.5	185095
Principal and Interest Loan Repayments
Principal portion	185095
Input Interest Rate & Term :	Principal & In Loan
Interest Rate	8.5	As decimal
Term	25	In Years
Loan Repayments	1490	17885
	Per Month	Per Annum
Estimated Interest first full year :
Interest Only Loan	1157	13882
Interest (portion of Principal & Interest Loan)	1311	15733	(IST YEAR ONLY)
Total Estimated Interest	2468	29615
	PER ANNUM  RENTAL BUDGET
Estimated Property Result :	Factors
	Input Per Week	Per Month
Step 7 Enter Gross Rent	330	1430
Estimated Gross Rental
		Per Annum
Estimation of property loss  :		17160
Step 8 Enter Vacancy allowance %	5%	-858
Gross Rental Before Charges		16302
Gross Rental Before Charges		16302
Step 9 Enter Estimated Per Annum Expenses
Advertising		250
Enter Management fee %	7%	1141
Letting fees (assumed 1/52)		314
Cleaning
Gardening
Council Rates		600
Water Rates		450
Insurance		450
Owners Corporation - Strata Levies		1600
Postage, printing , stationery, telephone		100
Repairs		350
Travel to inspect (if applicable)
Sub-total of expenditure during year		5255
Add : Deductions to be Calculated
Borrowing Expenses (Call for advice)	220
Building Write offs (call for advice)	200
Depreciation of fixtures and fittings (call for advice)	200
Sub-total Notional Deductions	620
Interest  Interest Only (from above)	13882
Interest P & I (from above)	15733
Sub-total Interest Deductions	29615
Total Calculated Expense Deductions		30235
ESTIMATED TOTAL EXPENSES		35490
PROPERTY LOSS		-19188
Share claimable by	Enter 100 or other % below
Yourself	100%	-19188
Other joint owner (or tenant in common)	0%	0
PERSONAL TAX PROJECTIONS	Enter other personal information
			Projected
Enter Your Name Here	ACTUAL	ESTIMATED	TOTAL
SALARY & WAGES :	Enter Per Month Amount	PER ANNUM	30 JUNE
Enter No. Months :	1	12	13
Salary - gross taxed	5000	60000	60000
Tax Instalments before or without  TID Variation	1500	18000	18000
Net wages	3500	42000	42000
Less Personal Tax Deductions	Either Enter Per Month or Per Annum Column		Total
Work related deductions	Per Month	PER ANNUM
Disability Insurance	10	120	120
Subs & Journals	25	300	300
Depreciation	50	600	600
Car Expenses	60	720	720
Other	20	240	240
Estimated Work expenses	165	1980	1980
Estimated Other Personal Expenses		Enter Totals Only
Tax Agents fees		150	150
Depreciation of Equipment		747	747
Other Deductions - Self Education		0	0
Estimated Other Deductions		897	897
TOTAL PERSONAL EXERTION DEDUCTIONS			2877
ESTIMATED NET SALARY INCOME			57123
PAYG Instalments re Property Income		Total PAYG Instalment
Enter Total Quarterly PAYG Instalment x 4 if applicable		2000	2000
Property Income		Enter Totals Only
Interest Income		3000	3000
Franked Div			0
Imputation Tax Credit			0
Net Rent  (per schedule)		Per Above	-19188
			0
Total Gross Business & Property Income			-16188
Less Other  Property related deductions :		Enter Totals Only
Depreciation F & F			0
Building Write off			0
Subscriptions		50	50
Superannuation (only if eligble)		0	0
Total Property Related Expenses			50
TOTAL NET BUSINESS & PROPERTY INCOME			-16238
Projected Taxable Income			40885
Estimated Primary Income Tax current year			8646
Less Franking Credit			0
Sub-total  ( cannot be negative)			8646
Add : Medicare Levy excludes surcharge	NB 1 % Surcharge may apply		613
Less Estimated Tax Instalments	1500	18000	18000
Less  PAYG Instalments		2000	2000
Estimated Assessment Payable/-Refundable			-10741
	Any Tax Savings from negative gearing should be considered
Cash Flow Shortfall	after reviewing the pre-tax cash flow position. -Can you afford the investment ?
		NET CASH FLOW		NET
		Property	Other Income	Total
Net Trading Loss	Before any taxation savings	-19188	42073	22885
Add Back notionals		620		620
Add Interest estimate		29615		29615
Deduct Loan Repayments		-31767		-31767
Estimated Cash Drainage	For Period	-20720	42073	21353
Estimated Cash Drainage	Per Day	-57	115	59
Estimated Cash Drainage	Per Month	-1727	3506	1779
Estimated Cash Drainage	Per Week	-398	809	411