My question is: Canadian-specific
QUESTION: Hi David,
Currently we have just refinanced our house from 200k to 400k (variable rate
mortgage = prime - .85). With this 'extra' cash as a 50k downpayment, we
have bought our first Gastown Loft apt for 200k. (mortgage ~ 900/month @
prime - .7). We have rented it out for 1200/month on a one year lease.
My question is: What should we be attempting to pay off sooner - the
apartment or the additional mortgage? We can also come up with 300 extra
per month. Where should that go?
Thanks and can we make an appointment with you?
KXXXXX
---------------------------------------------------------------------------
david ingram replies:
You should have isolated the original mortgage so that you can pay down the
non-deductible part of the original mortgage so that you can clearly pay the
non-deductible part off first.
You should be using the extra $300 a month PLUS the $1,200 a month rental to
pay that non-deductible part down.
Each month your equity would go up and your ability to borrow more money to
fund the rental would increase. You need to fulfill the terms of the CRA's
bulletin IT533 which states quite clearly (between the lines) that you need
a cash flow projection on the rental apartment to show that at some point
you will be making a rental profit on the condo.
You can read the bulletin at
http://www.cra-arc.gc.ca/E/pub/tp/it533/it533-e.html
You should also read the November 2001 newsletter at www.centa.com. this
newsletter is about the 20th iteration of my original 1976 dissertation on
making mortgage interest deductible.
I am easy to get hold of.
Some people I can recommend who understand the mortgage deduction part of a
mortgage are
Joan Marsh at (604) 535-9981 is very good at arranging deductible mortgages
and,
Glen Kelleway, is another Mortgage Consultant who understands how it is
done.
Glen at MortgageItRight.com
www.MortgageItRight.com
Local
Office: 604-683-6768 AND 604-476-0053
Fax: 866-683-6788
Toll Free
Office: 866-683-6768
Fax: 866-683-6788
Stu Roger of Manulife One Bank is developing the process and has one of the
best products available for a person to take advantage of the system.
You asked to see me.
I charge $350.00 Canadian for an hour's consultation (in person or by phone)
on the subject with examples and recommendations. It would be worth it for
you with the money involved.
If you belong to a group (union, church, club, job), you might want to
schedule a speaking engagement on the subject. You can spread the cost
among others and get me for a couple of
hours for a $1,000 group speaking fee.
You can also get lots of answers "For Free",
Don't forget Sunday Mornings on 600 AM for free.
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Dundee Wealth
Management and I, David Ingram will be hosting an INFOMERCIAL but 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/>
Local calls are taken at (604) 280-0600 and Long Distance calls are taken at
1( 866) 778-0600
=========================================
This from "ask an income tax and immigration expert" from www.centa.com
<http://www.centa.com/> or www.jurock.com <http://www.jurock.com/> or
www.featureweb.com <http://www.featureweb.com/> . David Ingram deals on a
daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems for the
United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait,
Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France,
Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia,
Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran,
India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba,
Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK,
GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas,
San Antonio and Houston Texas
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration
Tips, Income Tax and ImmigrationWizard Income Tax and Immigration Guru
Income Tax and Immigration Consultant Income Tax and Immigration Specialist
Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist
expert preparer consultant expatriate anti money laundering money seasoning
FINTRAC E677 E667 4789 4790 TDF-90 Reporting $10,000 cross border
transactions
=========================
New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia,
Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers,
Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay,
Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa,
Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham,
Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence,
Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon,
Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers, Berlin,
Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing,
Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds,
Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh,
Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo,
Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto,
Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish,
Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia,
Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St
James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears,
Truro, Charlottetown, Summerside, Niagara Falls, Albany
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration 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 Fax (604) 980-0325
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 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"
==============================
What's Related