ultra - - rest assured the ATO isnt in the business of opening up a hornets nest - while ever negative gearing exists in property market, it exists for the share market 'investor".
To invest in a Sydney property today and borrow full amount and claim deductibility of the interest , the 'intention of future income' is at least 5 or 6 years way - so an expectation of div's in that period of time is reasonable - ie share transactions where you are not a trader will be classified as 'investing' and so deuctibility of interest applies.
If the ATO was to take an alternative view, they would need to show you were a trader and not an investor. You are not exactly lonely out there, I for one have a number of friends claiming interest against other income, and their tax advice has been the same - claim interest, capitilise brokerage.
The post re penalties is correct, if the worst was to happen they couldnt fine you, only correct your return -
