Fractional cottage ownership - tax benefits,

QUESTION:
Apart from the enjoyment factor, are there any Canadian tax advantages to
owing a fractional cottage ownership either in Canada or in the US?  Would
there be any advantage to applying the smith manoeuver model to this type of
second home investment?
==============================
david ingram replies:
There are no tax advantages with the ownership of a fractional interest as
opposed to a whole interest in Canada and the US.
The theoretical advantage is that you are getting the use of a decent
property for less than the cost of paying for it all when you only use it
for a part of the year.
The big disadvantage is that they tend to be hard to resell and the price
for you to buy at the start bears little reality to the real value because
of paperwork and developer's profits and reserves for ongoing problems.
I do not recommend a fractional ownership in anything where it has been set
up by strangers and sold to strangers.
If you really want a ski cabin, a summer cottage or a wilderness ranch, find
someone else and buy it in partnership - maybe even four families.
Even though you may have problems in terms of who does what as you age and
family demands change, they will be less onerous than the ones you can
expect with your one month piece of Valhalla.
In the US, the property taxes and mortgage interest are automatically
deductible.
In Canada, the taxes are never deductible unless you rent it out but you can
make the interest deductible by arranging your affairs as per the November
2001 newsletter at  www.centa.com - click on newsletters in the top left
box.
Every Thursday evening Fred Snyder and I hold a free seminar at Fred's
office at 1764 West 7th (corner of Burrard in the Spence Diamond building)
in Vancouver.
The topics are:
  Seg funds and an alternative to the traditional RRSP.
   Making your mortgage income tax deductible
  Critical Care insurance for disasters.
coffee and usually cookies of course.
Phone 604-731-8900 to reserve your seat -and, you are welcome to bring your
brother, your sister, your mother or father, your children, your best
friend, your worst enemy or your own financial advisor who hasn't explained
how to make your mortgage deductible.
 ===============Answers to this and other similar  questions can be obtained
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I do not know how far the LD line reaches.
=========================================
David Ingram's US/Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
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Res (604) 980-3578 Cell (604) 657-8451
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