My question is: Canadian-specific QUESTION: My husband and I bought a house couple months ago. We planned to sell the old house but as time went by there is no offer so we are thinking of whether we should be patient and sell it or rent it out ? What is your suggestion ? And what about all the taxation issues ? PLease we really need your help. --------------------------------------------------------------------------- david ingram replies: Ten years from now, you will wish you had kept it. In the short term, you are likely better of selling. It depends upon your risk tolerance to deal with tenants and your cash flow ability to fund the second house. You need to sit down and do a detailed analysis of your expected cash flow to determine TWO things. 1. Whether you can expect a rental profit in the future. According to CRA Interpretation Bulletin 533, you need to have a rental profit in the future to deduct rental losses in the present. In other words, you can not deduct rental losses now because you expect a taxable capital gain in the future, but you can deduct rental losses from other income such as your wages IF you expect a RENTAL profit in the future You should read the November newsletter in the top left hand box at www.centa.com and the CRA Bulletin, IT-533 which you can find at: http://www.cra-arc.gc.ca/E/pub/tp/it533/it533-e.html 2. After you have defined your expectation of rental profit, you have to sit down and do a cash flow analysis to see if you will have the cash flow to fund the enterprise. ==================================== You can see some more info on rental income by reading the rental section of my old Income Tax Guide at: http://www.centa.com/taxguide/rental_income.htm ------------------------------------------------- David Ingram's US / Canada Services US / Canada / Mexico tax, Immigration and working Visa Specialists US / Canada Real Estate Specialists My Home office is at: 4466 Prospect Road North Vancouver, BC, CANADA, V7N 3L7 Cell (604) 657-8451 - (604) 980-0321 Fax (604) 980-0325 Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) 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 for expert help, assistance, preparation, or consultation 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." 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