This is a multi-part message in MIME format.
---------------------- multipart/alternative attachment
Thanks for your reply David,
Actually, we were thinking of buying a regular condo, not a hotel
condo.
I don't know the advantages and disadvantages of having a hotel
condo.
The reason I said we could use it for a week or so is simply that
we enjoy
Vancouver and want to use it ourselves as well. If this was just
for pure
speculation, then we would probably be inclined to just rent it
out full
time to the same tenants. The US allows an owner to use their
rental
property themselves for up to 13 or 14 (?) days per year and
still write
off the interest and depreciate it.
My one big concern is buying in Vancouver is getting an honest,
reliable
property management company. I have heard stories of dishonest
agents
renting places for absentee owners and claiming they sat vacant,
pocketing
the money themselves.
Do you know of an honest management company.
Also, what % range do management companies typically charge ?
I don't want to necessarily get the cheapest company, paying a
premium for
someone who is very good, and very honest is well worth it.
Also, since you brought up "hotel apartment units", do you
recommend these?
Are these like timeshares ?
S XXXXX
------------------
david ingram replies
I gave you the name and phone numbers of Ross McDonald and Betty
Scott of Lighthouse Realty in Abbotsford . They look after
North Vancouver, West Vancouver, Vancouver, etc., and also look
after my wife's rental condo..
To quote from below:
Ross and Betty are LIGHTHOUSE REALTY which used to be CEN-TA
LIGHTHOUSE
REALTY. They provide a superb property management service in
Abbotsford,
North Van, Vancouver, etc. You can get Ross at [email protected].
His
phone number is (604) 855-7393
And you are correct the US rule is the greater of 14 days or 10%
of the rental days.
Therefore in practical terms, if you rent it out for 300 days,
you can use it for 30 days yourself and still use it as a
deduction. If you only rent it out for 100 days, you can use it
for 14 days yourself.
In rereading what I wrote, I realize that I mixed up the editing.
However, I fail to see how you would use a regular condo for a
week or two yourself in any normal situation. The likelihood of
a tenant moving out at the time you want to use it are slim and
none and it would be insane to evict a tenant for you to use it
for two weeks.
Better to have an unfurnished unit rented by the year and just
come up and stay in a hotel.
If you are not buying a hotel unit, don't even think about it.
david ingram - [email protected]
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - (604) 913-9123 www.centa.com
Cell is (604) 657-8451 (10 AM to 10 PM seven days a week)
US / CANADA REAL ES
TATE SPECIALISTS
US / CANADA / MEXICO
Working Visa and Income Tax Specialists
Be ALERT, the world needs more "lerts"
------------------------------------------------------
I have sent you a copy of another similar answer which went out
two days
ago.
To: [email protected]
cc:
Subject: tax questions
David,
I got your name from C XXXXXXXXXX XXXXXXXXX and I wanted to ask
you a few
questions.
My wife and I are US citizens, and we live in San Francisco. We
want to buy
a condo in Vancouver, furnish it and rent it out. This way we can
also use
it for a week or so a year ourselves. I've already found out
about the
differences in the mortgage systems, but I want to know how the
taxes on
the rental income would work. I plan to deduct the interest and
depreciate
the property on my US tax returns.
1)I think I would have to claim the rental income and pay
Canadian taxes on
that, correct ?
2)If so, will I have to also claim the income on my US taxes or
do I just
claim that I paid the taxes up there ?
3)Do I have to pay twice on the same income ?
4)Also, if I am claiming income, can I depreciate the property on
Canadian
taxes ?
5)What is the tax rate I would have to pay on the income with no
deductions
and no other Canadian income ?
Let's say for instance that my property rented for $600 per week
and was
rented out for 45 weeks of the year for a total of $27,000.
Can I deduct the cost of my management company and any repairs
that may
have to be made ?
Any help you can give me in this area would be appreciated,
Thanks,
S XXXXXXXX XXXXXXXX
----------------------------------------------------
david ingram replies:
I presume from your question that you are talking about buying an
apartment
hotel unit
to rent out rather than a straight condominium. I get this from
your
comment about
using it for a week or so yourself.
The previous email I sent with the NR-6 Attached tells you about
getting a
property manager, etc.., and having them sign as your agent with
the CCRA
(Canada Customs and Revenue Agency).
Because this is a hotel unit as opposed to an annual rental, you
will need
a GST (Goods and Services Tax) number as well and your agent will
be
charging 7% GST on room rentals.
You would then prepare a Canadian return under Section 216(4) and
report
your gross income on a T776 rental form which is analogous to a
1040
Schedule E.
>From the rent you would deduct accounting and legal,
advertising, business
licence, repairs, strata fees, mortgage interest, utility bills,
insurance,
etc.
If there was a profit you could also claim CCA (capital cost
allowance -
like depreciation) of "up to" 4% on the diminishing balance of
the worth of
the building (not the land).
When I say up to 4%, I am referring to the fact that Canada will
not let
you claim depreciation past zero income. In other words, you
cannot use
depreciation to create a paper loss on the property as opposed to
the US
where you are presumed and even "must" take depreciation which
creates a
loss which may or may not be used against other income.
Also, watch out on your US return. If you use the Vancouver Unit
more than
30 days or 10 percent of the rental days (whichever is less), you
may not
use the loss to offset other income.
Assuming that you make a profit in Canada, the tax on the first
$30,000 or
so would be around 24%. After you had paid Canada, you would
then report
the income again on your 1040 Schedule E and claim credit for the
tax paid
to Canada on your 1040 Schedule 1116.
You can find more Canadian Rental information by going to
www.centa.com
clicking on tax guide and then on the rental chapter which
although written
20 years ago and not updated for 10 years is still relevant
today.
We, of course can look after all of this for you, even to making
your offer
for you. I am a licenced realtor.
For your mortgage, make sure that you deal with Joan Marsh at
(604)
535-8891 - I guarantee that she understands cross border mortgage
issues.
And for the benefit of the Chicago buyer of the condo in
Abbotsford, My old
business partner Ross McDonald sent me the following:
Hi david,
Gee David, this letter writer sounds like they could benefit from
a
property management referral to your old friends in Abbotsford -
someone
who is familiar with NR6's and can send you the NR4's on time -
what do you
think?
Ross & Betty
Ross and Betty are LIGHTHOUSE REALTY which used to be CEN-TA
LIGHTHOUSE
REALTY. They provide a superb property management service in
Abbotsford,
North Van, Vancouver, etc. You can get Ross at [email protected].
His
phone number is
(604) 855-7393
They will rent the condo, be the agent by signing the NR-6, AND
give you an
excellent statement for the tax return. They can also prepare
the Canadian
return although, of course, you should send it here so that we
can check up
on them.
david ingram - [email protected]
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 913-9133 - (604) 913-9123 www.centa.com
Cell is (604) 657-8451 (10 AM to 10 PM seven days a week)
US / CANADA REAL ESTATE SPECIALISTS
US / CANADA / MEXICO
Working Visa and Income Tax Specialists
Be ALERT, the world needs more "lerts"
.
---
Incoming mail is certified Virus Free.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.483 / Virus Database: 279 - Release Date: 5/19/03
---
Incoming mail is certified Virus Free.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.483 / Virus Database: 279 - Release Date: 5/19/03
---
Outgoing mail is certified Virus Free.
Checked by AVG anti-virus system (http://www.grisoft.com).
Version: 6.0.483 / Virus Database: 279 - Release Date: 5/19/03
---------------------- multipart/alternative attachment
An HTML attachment was scrubbed...
URL: http://lists.centa.com/mailman/private/centapede/attachments/33ab6e5b/attachment.htm
---------------------- multipart/alternative attachment--
What's Related