Sell or rent your house in Canada - Bulletin IT-533 - expectation of profit - international non-resident cross border incom

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.
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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
-------------------------------------------------
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