My question is: Canadian-specific
QUESTION: I am renting out my 2 bedroom condo. There is no mortgage. I now
live in new condo with a mortgage. Can I flip mortgage to
the rental condo so I can deduct expenses
and if so how does it work exactly.
Thankyou for you help.
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david ingram replies:
The answer is that you have to sell your condo to a stranger and get paid
for it.
then you take that money and pay down or off the mortgage on the new condo.
Then you would decide to buy back the old unit and borrow money using either
condo as security to buy back the rental.
This can be done rather quickly and without ever registering the transfer in
the land title office as long as you do an actual buy and sell. There are
two tax cases, Manfred Holman and Eva Huber that speak to why the mortgage
as it exists is not do-able.
The new tax case that agrees with the buy - sell - buy back provision is the
John Singleton Case. Bulletin IT-533 also explains the rules for interest
deductibility.
Getting hold of Fraser Smith's book the "Smith Manoeuvre" is a good resource
and you can read an expanded version of what I wrote about the subject for
the first time in Nov 1976 at www.centa.com - goto the top left box - click
on newsletters - click on 2001, click on November - an earlier version is
at March 1997 and the next version is coming out as a book this Christmas.
Title - "The CEN-TA Clause".
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, I, david ingram am a regular
guest on Fred Snyder of Dundee Wealth Managers' 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/>
Call (604) 280-0600 to have your question answered. BC listeners can also
call 1-866-778-0600.
Callers to the show and questioners on this board can also attend the
Thursday Night seminars on finance and making your Canadian Mortgage
Interest deductible.
And for those in the Vancouver area, Fred is running an infomercial for 1/2
hour every night in October on Channel 10 television at "groooaaannnn" 1 AM
in the morning. It has a couple of useful concepts in it that can be
recorded to really get the idea.
Every Thursday Evening, Fred Snyder of Dundee Wealth Management conducts
one of 17 different financial seminars in the boardroom of his office
Time: 7:00 to 9:30 PM
Date: Every Thursday evening
Place 1764 West Seventh
Vancouver (corner of Burrard)
Phone (604) 731-8900 to register
No cost - no obligation
Topics always cover mortgage interest as a deduction
other topics - getting the mortgage, estate planning, critical care
insurance, income taxation, differences between stocks and bonds, and
usually the most innovative HELOC mortgage offered in Canada from Manulife
Bank
If you are starting in downtown Vancouver and do not want to go home first,
one of the excellent THAI HOUSE restaurants is in the same building and
makes a nice start to the evening.
I, david ingram, manage to make three out of 4 of them to cover mortgage
interest as a deduction and give the class an adding test.
David Ingram's US/Canada Services
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Disclaimer: This question has been answered without detailed information or
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