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QUESTION:
Is it legitimate to take out a loan to pay the mortgage on a rental property and deduct the mortgage interest against the rental income as well as deducting the interest on the loan? Isn't this double deduction somehow?
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david ingram replies:
In Canada, you can only deduct the interest on a loan against income from the asset bought with that loan. Therefore, if you had a rental property with some equity and used the property as security to buy stock (as an example) you could deduct the interest against stock income but not against the rental income.
If you used the borrowed money to buy a new pleasure boat or remodel the kitchen in your personal house, the interest would NOT be deductible against anything even though the mortgage was registered against the rental house.
Goto www.centa.com and click on [newsletters], click on [2001], click on November and read 21 pages about making mortgage interest deductible.
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Res (604) 980-3578 Cell (604) 657-8451
(604) 980-0321
New email to [email protected]
www.centa.com 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 in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
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David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
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