My question is: Canadian-specific
QUESTION: My friends and I are planning on purchasing a rental property
together. There will be 4 of us. Can you please let me know if there is
any tax advantages on co-owning the property vs. having an individual claim
all revenues and expenses ?
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david ingram replies:
The Government's mandatory form to report a rental property has room for a
total of 5 co-owners.
Form T776 can be found at:
http://www.cra-arc.gc.ca/E/pbg/tf/t776/t776-04e.pdf
Unless the one individual is collecting (and keeping) all the money and
paying all the expenses, it makes sense that the owners would all report
their individual share.
You can get a few more tips on renting by going to www.centa.com. click on
Tax Guide in the top left hand box and then click on "rental income".
And if you use the techniques I talk about in the November 2001 newsletter,
you can all use the rental to help make your own mortgage interest
deductible. In fact, if you have the cash for the down payment on the
rental, you should use it to pay down that much of your home mortgage and
borrow the down payment by means of a HELOC - Home Equity Line Of Credit.
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.
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
US / Canada / Mexico tax, Immigration and working Visa Specialists
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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
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