Canada condo mortgage deductible on US schedule A

Subject: Canada condo mortage deductable?


Hi David,

Hope you're doing well and enjoying the busy season!

I am sure that you've probably addressed this question in one of your past emails, but I can't find it anywhere. My wife and I are now both US citizens (still Canadian too). We live in the US in both a rented apartment and part-time on our sailboat. We're thinking of buying a condo in Toronto to spend a few months of the year - maybe 3 or 4 months maximum. The rest of the time we would live on our boat here in the US. If we got a mortage on the condo in Canada, would the interest be tax deductible here in the US?

Thanks - all the best!


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david ingram replies:

If you spend 3 or 4 months in Canada at your condo and live on the sailboat 3 or 4 months and spend 3 or 4 months "on the road" as a performer, and the CRA becomes aware of the situation, Canada will feel it has every right to tax you on your world income unless your sailboat is worth two or three times what you paid for your Toronto condo. Canada will say you are LIVING in Toronto and vacationing on your sailboat which is essentially what you are doing now I would expect with an apartment you live in and vacationing on your sailboat.

Nobody, well almost Nobody, buys a Toronto Condo as a vacation home unless they are richer than Midas..

But the answer to your question is that the interest and property taxes on the Toronto condo will be deductible on US Schedule A.

I think you likely need another phone consultation refresher.