My question is: Canadian-specific QUESTION: I don't know if this has been addressed in archives so I will attempt to explain myself. Myself and my spouse are joint shareholders in a BC corporation that presently is operating out of our home. We are starting to burst at the seams and are now looking for office /storage space. I would prefer to purchase a space rather than lease it as the payments would be somewhat the same (within a few hundred a month). I figured it would be better to outright own the property. Our house mortgage is coming up for renewal in 3 months. The present value on the home is close to the $600K range with approx 160k owing.Of the 160k mortgage, 100k is presently used as a tax deduction as I was an active shareholder in an Ontario Corporation.( Presently in the works to sell the shares as I have not been active in the business for 7 years. Once those shares are sold I will not have this deduction any longer. My questions based on these events are as follows, Should I on the refinancing issue, go for a mortgage that will also incorporate the commercial space as well? Rates are historically low and it appears that they may even slide back a hair. Do we lock it in for a long fixed term as the interest may be tax deductible? Then do we lease the space to our corporation? As for the new mortgage I assume we would only be able to claim the portion used based on what was used for the commercial building. We would still use a portion of our home as an offsite office so that we can use that portion as legitimate deductions? Any opinion would greatly be appreciated. --------------------------------------------------------------------------- david ingram replies: I think you are smart to buy even though i am predicting a temporary slowdown and even a drop of 10 or 15% in prices. However, since everyone else is against me here it makes total sense to buy now and get the use and pride out of your new building. If you are self employed, it is easy to make your whole mortgage deductible. read the Smith Manoeuvre and my November 2001 newsletter in the top left hand corner at www.centa.com. When you have a corporation, it is difficult. A solution is to operate a part of your business as a proprietorship for just long enough to make your mortgage deductible. I charge a minimum of $400 for that kind of consultation but you can get lots of free information by attending one of Fred Snyder's free seminars every Thursday at noon and 7 PM. In addition, you can listen to Fred's 600AM programs every Sunday morning from 9 to 10:30 AM. I used to be the co-host but have been relegated to occasional guest now. However, this next Sunday is one of those days and I will be on from 9 to 10:30 Sunday Oct 29 on CKBD which is at 600 on the AM dial. If you are on Vancouver Island, Ralph Hahmann, Fred's Victoria Representative has free seminars on this and other financial subjects every Tuesday Night - call him at (250) 727-9238 or (250) 472-0700 to reserve a seat. Glen Kelleway at glen at mortgageitright.com (604) 476-0053 is one of the few local mortgage brokers who truly understands the principal and I used him for my own mortgage even though I was a licenced mortgage broker myself (no more). Stuart Rodger is also a regular guest on Fred's Show and represents Manulife Bank. They have the most innovative approach to this technique but are less free when it comes to approving anything out of the ordinary (ie, you have a bankruptcy or other credit problem in your background) You can listen to Stuart on Sunday, meet him at Fred's Seminars on Thursday evenings or call him at (604) 351-6133. My rather public bankruptcy a few years ago meant that I was turned down when I applied. ---------------------- Answers to this and other similar questions can be obtained free on Air by david ingram on the last Sunday of each month. On the last Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram will be a 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. I will be at the seminar following the last Sunday of the month. ------------------------------ 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. If it is your first seminar, Fred will buy you dinner if you are pre-registered. I, david ingram, will be at the Thursday evening following the last Sunday of each month 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 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." Be ALERT, the world needs more "lerts" David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Saudi Arabia to Mexico to China or Chile - Cross border, dual citizen - out of country investments are all handled with competence & authority. 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