Borrowing for shares calculator - what am I missing?

[chasingthegoodlife]

I've been playing around with the Borrowing For Shares calculator on Noel Whittaker's website and have gotten myself thoroughly confused.
https://www.noelwhittaker.com.au/resources/calculators/borrowing-for-shares-calculator/

I previously thought that leveraged investment income was treated thus:
Borrowing 100k to buy 100k shares. Shares return 4% dividend. ($4000 pa), interest on borrowing of 5% ($5000 pa), interest is deductible against investment income leaving net loss of $1000. For simplicity, assume there are no franking credits.

However, when I input the above scenario into the calculator it's showing a loss of $1000 on the investment PLUS a tax liability on the $4000 income (so $760+ depending on tax bracket). So a holding cost of $1760+ per year.

Is the interest not deductible against the investment income? Is the calculator wrong? Is there something else I have misunderstood?

Appreciate any thoughts.

[mjr]

That's not what I get from the calculator. 

Interest   Income   Cash Gain/Loss   Franked Component   Franking Credit   Taxable   Tax Payable   Net Tax Payable   Net Cash Position
5000   4000   -1000                   0                                   0                           4000    0                   0                           -1000

[chasingthegoodlife]

How strange. What tax bracket have you selected? The sub 18k will show no tax regardless as under tax free threshold.

[mjr]

I selected $180,000+

[chasingthegoodlife]

Thanks for confirming.

I ran it again with the 180k+ income bracket you used to be sure and still getting a tax debt despite the net loss.

Tried a different browser, same result. No idea why.

Interest    Income    Cash Gain/Loss    Franked Component    Franking Credit    Taxable    Tax Payable    Net Tax Payable    Net Cash Position
5000   4000   -1000   0   0   4000   1880   1880   -2880