My question is: Canadian-specific
QUESTION: I bought a property 2003,October, which was purchased for 110,000
first time buyer 5%, I have a morgage at 5.9% for 10 years. Recently, in
this area prices have risen almost 30% for Mount Pleasant very good! Could i
re-finance and take out the equity? We have put about 5 thousand into
fixing, updating...and believe our property now valued at least 160,000!
Does that mean we could take out 30,000? Could we then re-invest this money
on a rental property and not get capital gains? Thank-you.
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david ingram replies:
The answer is yes. If you borrow $30,000 based upon the increased equity in
your Mount Pleasant, Vancouver, BC home, the $30,000 is not deductible.
If you were to use the $30,000 to buy a boat or a summer cabin or a ski
chalet which was for personal use only, the interest would NOT be
deductible. But if you use the $30,000 to buy a rental house, the interest
"will" be deductible against the rental income. If it results in a rental
loss, the rental loss can be used as a deduction against other income.
The nice part is that you can then use the rental income to make your first
mortgage deductible over a number of years.
Goto www.centa.com and read the Nov 2001 newsletter on Mortgage interest as
a deduction. In addition, because you live in Vancouver, you can attend one
Fred Snyder 's and my seminars on mortgage interest as a deduction as
follows:
Every Thursday evening Fred Snyder and I hold a free seminar at Fred's
office at 1764 West 7th (corner of Burrard in the Spence Diamond building)
in Vancouver.
The topics are:
Seg funds and an alternative to the traditional RRSP.
Making your mortgage income tax deductible
coffee and sometimes cookies of course.
Phone 604-731-8900 to reserve your seat -and, you are welcome to bring your
brother, your sister, your mother or father, your children, your best
friend, your worst enemy or your own financial advisor who hasn't explained
how to make your mortgage deductible.
And remember
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth
Management and I, David Ingram will be hosting an INFOMERCIAL but LIVE talk
show called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet
at
www.600AM.com <http://www.600am.com/>
Local calls are taken at (604) 280-0600 and Long Distance calls are taken at
1( 866) 778-0600
=========================================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321 Fax (604) 980-0325
Email to taxman at centa.com <mailto:taxman at centa.com>
www.centa.com <http://www.centa.com> www.david-ingram.com
<http://www.david-ingram.com/>
Disclaimer: This question has been answered without detailed information or
consultation and is to be regarded only as general comment. Nothing in
this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and any
and all non-contractual duties are expressly denied. All readers should
obtain formal advice from a competent and appropriately qualified legal
practitioner or tax specialist in connection with personal or business
affairs such as at www.centa.com <http://www.centa.com> . If you forward
this message, this disclaimer must be included."
Be ALERT, the world needs more "lerts"
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